-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VB6/RVPFuoj1LVa/USJfsWcgkxWFhoxZmZerofYQl/NBCApiQFuw4/tvbup39QHN iIq6zF99PTCwqpyEHmmIdg== 0001144204-07-042728.txt : 20070814 0001144204-07-042728.hdr.sgml : 20070814 20070814062515 ACCESSION NUMBER: 0001144204-07-042728 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20070630 FILED AS OF DATE: 20070814 DATE AS OF CHANGE: 20070814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIONIX CORP CENTRAL INDEX KEY: 0000764667 STANDARD INDUSTRIAL CLASSIFICATION: MACHINE TOOLS, METAL CUTTING TYPES [3541] IRS NUMBER: 870428526 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 002-95626-D FILM NUMBER: 071051178 BUSINESS ADDRESS: STREET 1: 9272 JERONIMO RD STREET 2: SUITE 108 CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 9494549283 MAIL ADDRESS: STREET 1: 9272 JERONIMO RD STREET 2: SUITE 108 CITY: IRVINE STATE: CA ZIP: 92618 FORMER COMPANY: FORMER CONFORMED NAME: SIONIX CORP /UT/ DATE OF NAME CHANGE: 19960515 FORMER COMPANY: FORMER CONFORMED NAME: AUTOMATIC CONTROL CORP /NV DATE OF NAME CHANGE: 19960422 FORMER COMPANY: FORMER CONFORMED NAME: SIONIX CORP DATE OF NAME CHANGE: 19960214 10QSB 1 v084221_10qsb.htm Unassociated Document
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

Commission File Number 2-95626-D

Sionix Corporation
(Exact name of small business issuer as specified in its charter)
 
Nevada
87-0428526
 
 
State or other jurisdiction
(IRS Employer
of incorporation or organization)
Identification No.)
 
 2082 Michelson Drive, Suite 306, Irvine, CA 92612

(Address of principal executive offices)

949 752-7980
 
(Issuer’s telephone number)

Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)

Check whether the issuer: (1) 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 for such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o

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

As of July 31, 2007, there were 106,635,201 shares of Common Stock of the issuer outstanding.

Transitional Small Business Disclosure Format (check one) o Yes; x No

 
 
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. This Report on Form 10-QSB contains a number of forward-looking statements that reflect management's current views and expectations with respect to our business, strategies, products, future results and events and financial performance. All statements made in this Report other than statements of historical fact, including statements that address operating performance, events or developments that management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, acquisitions, adequacy of funds from operations, statements expressing general optimism about future operating results and non-historical information, are forward-looking statements. In particular, the words "believe," "expect," "intend," "anticipate," "estimate," "may," "will," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated or implied by these statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Readers should not place undue reliance on these forward-looking statements, which are based on management's current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below) and apply only as of the date of this Report. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below "Management's Discussion and Analysis and Plan of Operation," as well as those discussed elsewhere in this Report, and the risks discussed in our most recently filed Annual Report on Form 10-KSB and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors that may affect our business.
 
 
Part I. FINANCIAL INFORMATION

Item 1. Financial Statements
 
SIONIX CORPORATION
  
(A DEVELOPMENT STAGE COMPANY)
  
BALANCE SHEET
  
AS OF JUNE 30, 2007
  
(Unaudited)
  
        
ASSETS
  
         
CURRENT ASSETS:
        
Cash & cash equivalents
  
$
455,563
 
         
PROPERTY AND EQUIPMENT, net
    
46,399
 
DEPOSIT
    
4,600
 
         
Total assets
  
$
506,562
 
         
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
         
CURRENT LIABILITIES:
        
Accounts payable
  
$
204,804
 
Accrued expenses
    
1,525,397
 
Notes payable-related parties
    
129,000
 
Note payable-officers
    
32,860
 
Convertible notes
    
792,314
 
Equity line of credit
    
102,336
 
Total current liabilities
    
2,786,712
 
         
STOCKHOLDERS' DEFICIT
        
Common stock, $0.001 par value ;150,000,000 shares authorized;
        
107,117,101 shares issued and 106,635,201 shares outstanding
    
106,635
 
Additional paid-in capital
    
13,969,888
 
Shares to be issued
    
43,900
 
Deficit accumulated during development stage
    
(16,400,573
)
Total stockholders' deficit
    
(2,280,150
)
Total liabilities & stockholders' deficit
  
$
506,562
 
 
The accompanying notes form an integral part of these unaudited financial statements
 
 
SIONIX CORPORATION
  
(A DEVELOPMENT STAGE COMPANY)
  
STATEMENTS OF OPERATIONS
  
(Unaudited)
  
 
   
Three Month Periods Ended
June 30,
  
Nine Month Periods
Ended
June 30,
  
Cumulative
from Inception
(October 3, 1994) to
 
   
2007
  
2006
  
2007
  
2006
  
June 30, 2007
  
                                 
Net sales
  
$
-
  
$
-
  
$
    
$
 -
  
$
-
  
                                 
Operating expenses:
                                
General and administrative
    
444,544
   
242,236
   
932,668
   
447,247
   
12,675,067
 
Research and development
    
-
   
-
   
-
   
-
   
1,449,474
 
Impairment of intangible assets
    
-
   
-
   
-
   
-
   
1,267,278
 
Inventory obsolescence
    
-
   
-
   
-
   
-
   
365,078
 
Depreciation and amortization
    
7,936
   
7,745
   
23,723
   
23,486
   
524,129
 
Total operating expenses
    
452,480
   
249,981
   
956,391
   
470,733
   
16,281,026
 
Loss from operations
    
(452,480
)
  
(249,981
)
  
(956,391
)
  
(470,733
)
  
(16,281,026
)
                                 
Other income (expenses)
                                
Interest income
    
56
   
-
   
666
   
-
   
54,324
 
Interest expense
    
(74,307
)
  
(2,406
)
  
(144,895
)
  
(7,218
)
  
(379,582
)
Loss on settlement of debts
    
-
   
-
   
-
   
(94,221
)
  
(230,268
)
Loss on legal settlement
    
-
   
-
   
-
   
-
   
434,603
 
Total other income (expenses)
    
(74,252
)
  
(2,406
)
  
(144,229
)
  
(101,439
)
  
(120,924
)
                                 
Loss before income taxes
   
(526,732
)
  
(252,387
)
  
(1,100,620
)
  
(572,172
)
  
(16,388,874
)
                                 
Income taxes
    
900
   
-
   
900
   
-
   
11,700
 
                                 
Net loss
 
$
(527,632
)
$
(252,387
)
$
(1,101,520
)
$
(572,172
)
$
(16,400,573
)
                                 
                                 
Basic and diluted loss per share
 
$
(0.00
)
$
(0.00
)
$
(0.01
)
$
(0.01
)
      
                                 
 
                                
*Basic and diluted weighted average number of common stock outstanding
    
106,431,387
   
102,524,186
   
105,901,243
   
102,524,186
       
 
*Weighted average number of shares used to compute basic and diluted loss per share is the same as the effect of dilutive
securities is anti-dilutive
 
The accompanying notes form an integral part of these unaudited financial statements
 
 
SIONIX CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)

     
For The Nine Month Periods Ended June 30,
    
Cumulative From Inception (October 3, 1994) to September 30,
   
Cumulative From Inception (October 3, 1994) to
June 30,
 
 
 
 
2007
 
 
2006
 
 
2006
    
2007
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                          
Net loss
$
 
(1,101,520
)
$
  (572,172
)
$
  (15,299,053
)
$
(16,400,573
)
Adjustments to reconcile net loss to net cash used in
                         
operating activities:
                          
Depreciation and amortization
    
23,723
   
23,486
   
587,323
   
611,046
 
Amortizaton of consulting fees
    
-
   
-
   
13,075
   
13,075
 
Amortization of debt discount on convertible NP
    
75,827
   
-
   
75,827
       
Issuance of common stock for compensation
    
-
   
-
   
1,835,957
   
1,835,957
 
Issuance of common stock for services & prepaid consulting fees
    
84,929
   
-
   
2,096,557
   
2,181,486
 
Impairment of assets
    
-
   
-
   
514,755
   
514,755
 
Write-down of obsolete assets
    
-
   
-
   
38,862
   
38,862
 
Impairment of intangible assets
    
-
   
-
   
1,117,601
   
1,117,601
 
Loss on settlement of debts
    
-
   
94,221
   
130,268
   
130,268
 
Other
    
-
   
-
   
40,370
   
40,370
 
Changes in assets and liabilities:
                          
Increase in other current assets
    
-
   
-
   
(510,727
)
  
(510,727
)
Decrease in other receivable
    
-
   
-
   
3,000
   
3,000
 
Increase in deposits
    
(4,600
)
  
-
   
-
   
(4,600
)
Increase (decrease) in accounts payable
    
(67,806
)
  
7,713
   
342,610
   
274,804
 
Increase in accrued interest
    
69,068
   
7,218
   
68,681
   
137,749
 
Increase (decrease) in accrued expense
    
319,558
   
422,139
   
1,067,914
   
1,387,473
 
Total adjustments
    
500,700
   
554,777
   
7,346,247
   
7,846,947
 
Net cash used in operating activities
    
(600,821
)
  
(17,395
)
  
(7,952,807
)
  
(8,553,626
)
                           
CASH FLOWS FROM INVESTING ACTIVITIES
                          
Purchase of patents
    
-
   
-
   
(154,061
)
  
(154,061
)
Purchase of equipment
    
(25,361
)
  
-
   
(380,174
)
  
(405,535
)
Net cash used in investing activities
    
(25,361
)
  
-
   
(534,235
)
  
(559,596
)
                           
CASH FLOWS FROM FINANCING ACTIVITIES:
                          
Proceeds from issuance of notes
   
1,336,000
   
47,780
   
457,433
   
1,793,433
 
Proceeds from (payment for) notes payble under equity line of credit
    
(225,000
)
  
-
   
756,000
   
531,000
 
Payment of notes to officers
    
(33,800
)
  
(30,340
)
  
(151,842
)
  
(185,642
)
Issuance of common stock for cash
    
-
   
-
   
7,376,094
   
7,376,094
 
Receipt of cash for stock to be issued
    
-
   
-
   
53,900
   
53,900
 
Net cash provided by financing activities
    
1,077,201
   
17,440
   
8,491,585
   
9,568,785
 
                           
Net increase in cash & cash equivalents
    
451,019
   
45
   
4,544
   
455,563
 
                           
CASH & CASH EQUIVALENTS, BEGINNING
   
4,544
   
343
   
-
   
-
 
                           
CASH & CASH EQUIVALENTS, ENDING
   
455,563
 
$
388
  
 
4,544
 
$
455,563
  
                           
SUPPLEMENTAL INFORMATION:
    
 
                    
Taxes
  
$
-
  
$
-
        
 
 
  
Interest expense
  
$
-
  
$
-
        
 
  
 
The accompanying notes form an integral part of these unaudited financial statements
  
 
 
SIONIX CORPORATION
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (OCTOBER 3,1994) TO JUNE 30, 2007
(Unaudited)
 
 
 
 
                          
Deficit
  
Total
 
   
Common stock
 
Additional
 
Stock
 
Stock
 
Stock
 
Unamortized
 
accumulated
 
stockholders'
  
   
Number of
 
 
 
paid-In
 
to be
 
subscription
 
to be
 
consulting
 
from
 
equity
  
   
shares
 
Amount
 
capital
 
issued
 
receivable
 
cancelled
 
 fees
 
inception
 
(deficit)
  
                                                         
Shares issued for cash-Oct 1994
   
10,000
 
$
10
  
$
90
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
100
  
                                                         
Net loss for period
Oct 3, 1994 to Dec 31, 1994
   
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,521
)
  
(1,521
)
                                                         
Balance December 31, 1994
    
10,000
   
10
   
90
   
-
   
-
   
-
   
-
   
(1,521
)
  
(1,421
)
                                                         
Shares issued for assignment right
    
1,990,000
   
1,990
   
(1,990
)
  
-
   
-
   
-
   
-
   
-
   
-
 
                                                         
Issuance of shares for service
    
572,473
   
572
   
135,046
   
-
   
-
   
-
   
-
   
-
   
135,618
 
                                                         
Issuance of shares for debt
    
1,038,640
   
1,038
   
1,164,915
   
-
   
-
   
-
   
-
   
-
   
1,165,953
 
                                                         
Issuance of shares for cash
    
232,557
   
233
   
1,119,027
   
-
   
-
   
-
   
-
   
-
   
1,119,260
 
                                                         
Issuance of shares for subscription
note receivable
    
414,200
   
414
   
1,652,658
   
-
   
(1,656,800
)
  
-
   
-
   
-
   
(3,728
)
                                                         
Issuance of shares for future
production cost
    
112,500
   
113
   
674,887
   
-
   
(675,000
)
  
-
   
-
   
-
   
-
 
                                                         
Net loss for the year
ended December 31, 1995
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(914,279
)
  
(914,279
)
                                                         
Balance December 31, 1995
    
4,370,370
   
4,370
   
4,744,633
   
-
   
(2,331,800
)
  
-
   
-
   
(915,800
)
  
1,501,403
 
                                                         
Issuance of shares for reorganization
    
18,632,612
   
18,633
   
(58,033
)
  
-
   
-
   
-
   
-
   
-
   
(39,400
)
                                                         
Issuance of shares for cash
    
572,407
   
573
   
571,834
   
-
   
-
   
-
   
-
   
-
   
572,407
 
                                                         
Issuance of shares for service
    
24,307
   
24
   
24,283
   
-
   
-
   
-
   
-
   
-
   
24,307
 
                                                         
Net loss for the nine month ended
September 30, 1996
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(922,717
)
  
(922,717
)
                                                         
Balance September 30, 1996
    
23,599,696
   
23,600
   
5,282,717
   
-
   
(2,331,800
)
  
-
   
-
   
(1,838,517
)
  
1,136,000
 
                                                         
Share issued for cash
   
722,733
   
723
   
365,857
   
-
   
-
   
-
   
-
   
-
   
366,580
 
                                                         
Share issued for service
   
274,299
   
274
   
54,586
   
-
   
-
   
-
   
-
   
-
   
54,860
 
                                                         
Cancellation of shares
    
(542,138
)
  
(542
)
  
(674,458
)
  
-
   
675,000
   
-
   
-
   
-
   
-
 
                                                         
Net loss for the year ended
September 30, 1997
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(858,915
)
  
(858,915
)
                                                         
Balance September 30, 1997
    
24,054,590
   
24,055
   
5,028,702
   
-
   
(1,656,800
)
  
-
   
-
   
(2,697,432
)
  
698,525
 
                                                         
Balance September 30, 1997
    
24,054,590
   
24,055
   
5,028,702
   
-
   
(1,656,800
)
  
-
   
-
   
(2,697,432
)
  
698,525
 
                                                         
Share issued for cash
   
2,810,000
   
2,810
   
278,190
   
-
   
-
   
-
   
-
   
-
   
281,000
 
                                                         
Share issued for service
   
895,455
   
895
   
88,651
   
-
   
-
   
-
   
-
   
-
   
89,546
 
                                                         
Shares issued for compensation
    
2,200,000
   
2,200
   
217,800
   
-
   
-
   
-
   
-
   
-
   
220,000
 
                                                         
Cancellation of shares
    
(2,538,170
)
  
(2,538
)
  
(1,534,262
)
  
-
   
1,656,800
   
-
   
-
   
-
   
120,000
 
 
 
SIONIX CORPORATION
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (OCTOBER 3,1994) TO JUNE 30, 2007
(Unaudited)
 
     
Common stock
                                  
Deficit
    
Total
 
     
Number
of 
    
 
    
Additional
paid-In
    
Stock
to be
   
Stock
subscription
    
Stock
to be
   
Unamortized
consulting
    
accumulated
from
    
stockholders'
equity
  
      
shares
    
Amount
    
capital
    
issued
    
receivable
    
cancelled
    
 fees
    
inception
    
(deficit)
  
Net loss for the year ended
September 30, 1998
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,898,376
)
  
(1,898,376
)
                                                         
Balance September 30, 1998
    
27,421,875
   
27,422
   
4,079,081
   
-
   
-
   
-
   
-
   
(4,595,808
)
  
(489,305
)
Shares issued for compensation
    
3,847,742
   
3,847
   
389,078
   
-
   
-
   
-
   
-
   
-
   
392,925
 
                                                         
Share issued for service
   
705,746
   
706
   
215,329
   
-
   
-
   
-
   
-
   
-
   
216,035
 
                                                         
Share issued for cash
   
9,383,000
   
9,383
   
928,917
   
-
   
-
   
-
   
-
   
-
   
938,300
 
                                                         
Net loss for the year ended
September 30, 1999-Restated
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,158,755
)
  
(1,158,755
)
                                                         
Balance September 30, 1999
    
41,358,363
   
41,358
   
5,612,405
   
-
   
-
   
-
   
-
   
(5,754,563
)
  
(100,800
)
                                                         
Share issued for cash
   
10,303,500
   
10,304
   
1,020,046
   
-
   
-
   
-
   
-
   
-
   
1,030,350
 
                                                         
Shares issued for compensation
    
1,517,615
   
1,518
   
1,218,598
   
-
   
-
   
-
   
-
   
-
   
1,220,116
 
                                                         
Shares issued for service
   
986,844
   
986
   
253,301
   
-
   
-
   
-
   
-
   
-
   
254,287
 
                                                         
Net loss for the year ended
September 30, 2000
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(2,414,188
)
  
(2,414,188
)
                                                         
Balance September 30, 2000
    
54,166,322
   
54,166
   
8,104,350
   
-
   
-
   
-
   
-
   
(8,168,751
)
  
(10,235
)
                                                         
Shares issued for service and
prepaid expenses
    
2,517,376
   
2,517
   
530,368
   
-
   
-
   
-
   
(141,318
)
  
-
   
391,567
 
                                                         
Share issued for cash
   
6,005,000
   
6,005
   
594,495
         
-
   
-
   
-
   
-
   
600,500
 
                                                         
100,000 share to be issued for cash
   
-
   
-
   
-
   
10,000
   
-
   
-
   
-
   
-
   
10,000
 
 
 
SIONIX CORPORATION
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (OCTOBER 3,1994) TO JUNE 30, 2007
(Unaudited)
 
 
 
 
                          
Deficit
  
Total
 
   
Common stock
 
Additional
 
Stock
 
Stock
 
Stock
 
Unamortized
 
accumulated
 
stockholders'
  
   
Number of
 
 
 
paid-In
 
to be
 
subscription
 
to be
 
consulting
 
from
 
equity
  
   
shares
 
Amount
 
capital
 
issued
 
receivable
 
cancelled
 
 fees
 
inception
 
(deficit)
  
Net loss for the year ended
September 30, 2001
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,353,429
)
  
(1,353,429
)
                                                         
639,509 Shares to be issued for debt
settlement in 2001
    
-
   
-
   
-
   
103,295
     -     -     -     -    
103,295
  
                                                         
Balance September 30, 2001
    
62,688,698
   
62,688
   
9,229,213
   
113,295
   
-
   
-
   
(141,318
)
  
(9,522,180
)
  
(258,302
)
                                                         
Balance September 30, 2001
    
62,688,698
   
62,688
   
9,229,213
   
113,295
   
-
   
-
   
(141,318
)
  
(9,522,180
)
  
(258,302
)
                                                         
Shares issued for service and
prepaid expenses
    
1,111,710
   
1,112
   
361,603
   
-
   
-
   
-
   
54,400
   
-
   
417,115
 
                                                         
Shares issued as contribution
    
100,000
   
100
   
11,200
   
-
   
-
   
-
   
-
   
-
   
11,300
 
                                                         
Shares issued for compensation
    
18,838
   
19
   
2,897
   
-
   
-
   
-
   
-
   
-
   
2,916
 
                                                         
Share issued for cash
   
16,815,357
   
16,815
   
1,560,782
   
(10,000
)
  
-
   
-
   
-
   
-
   
1,567,597
 
                                                         
Shares issued for debt settlement
   
1,339,509
   
1,340
   
208,639
   
(103,295
)
  
-
   
-
   
-
   
-
   
106,684
 
                                                         
Shares to be issued for services related to equity raising-
967,742 shares
    
-
   
-
   
(300,000
)
  
300,000
   
-
   
-
   
-
   
-
   
-
 
                                                         
Cancellation of shares
    
(7,533,701
)
  
(7,534
)
  
-
   
-
   
-
   
-
   
-
   
-
   
(7,534
)
                                                         
Net loss for the year ended
September 30, 2002
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,243,309
)
  
(1,243,309
)
                                                         
Balance September 30, 2002
    
74,540,411
   
74,540
   
11,074,334
   
300,000
   
-
   
-
   
(86,918
)
  
(10,765,489
)
  
596,467
 
                                                         
Shares issued for services
   
2,467,742
   
2,468
   
651,757
   
(300,000
)
  
-
   
-
   
-
   
-
   
354,225
 
                                                         
Shares issued for capital equity line
    
8,154,317
   
8,154
   
891,846
   
-
   
-
   
-
   
-
   
-
   
900,000
 
                                                         
Amortization of consulting fees
    
-
   
-
   
-
   
-
   
-
   
-
   
86,918
   
-
   
86,918
 
                                                         
Cancellation of shares
    
(50,000
)
  
(50
)
  
50
   
-
   
-
   
-
   
-
   
-
   
-
 
                                                         
7,349,204 shares to be cancelled
    
-
   
-
   
7,349
   
-
   
-
   
(7,349
)
  
-
   
-
   
-
 
                                                         
 
 
SIONIX CORPORATION
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (OCTOBER 3,1994) TO JUNE 30, 2007
(Unaudited)
 
 
 
 
                          
Deficit
  
Total
 
   
Common stock
 
Additional
 
Stock
 
Stock
 
Stock
 
Unamortized
 
accumulated
 
stockholders'
  
   
Number of
 
 
 
paid-In
 
to be
 
subscription
 
to be
 
consulting
 
from
 
equity
  
   
shares
 
Amount
 
capital
 
issued
 
receivable
 
cancelled
 
 fees
 
inception
 
(deficit)
  
Net loss for the year ended
September 30, 2003
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,721,991
)
  
(1,721,991
)
                                                         
Balance September 30, 2003
    
85,112,470
   
85,112
   
12,625,336
   
-
   
-
   
(7,349
)
  
-
   
(12,487,480
)
  
215,619
 
                                                         
Shares issued for capital equity line
    
19,179,016
   
19,179
   
447,706
   
-
   
-
   
-
   
-
   
-
   
466,885
 
                                                         
Shares issued for services
    
5,100,004
   
5,100
   
196,997
   
-
   
-
   
-
   
(13,075
)
  
-
   
189,022
 
                                                         
963,336 shares to be issued for cash
    
-
   
-
   
-
   
28,900
   
-
   
-
   
-
   
-
   
28,900
 
                                                         
500,000 shares to be issued for debt settlement
    
-
   
-
   
-
   
15,000
   
-
   
-
   
-
   
-
   
15,000
 
                                                         
Cancelled shares
    
(7,349,204
)
  
(7,349
)
  
-
   
-
   
-
   
7,349
   
-
   
-
   
-
 
                                                         
Net loss for the year ended
September 30, 2004
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,568,770
)
  
(1,568,770
)
                                                         
Balance September 30, 2004
    
102,042,286
   
102,042
   
13,270,039
   
43,900
   
-
   
-
   
(13,075
)
  
(14,056,250
)
  
(653,344
)
                                                         
Amortization of consuting fees
    
-
   
-
   
-
   
-
   
-
   
-
   
13,075
   
-
   
13,075
 
                                                         
Net loss for the year ended
September 30, 2005
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(467,917
)
  
(467,917
)
                                                         
Balance September 30, 2005
    
102,042,286
   
102,042
   
13,270,039
   
43,900
   
-
   
-
   
-
   
(14,524,167
)
  
(1,108,186
)
                                                         
Net loss for the year ended
September 30, 2006
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(774,887
)
  
(774,887
)
                                                         
Balance September 30, 2006
    
102,042,286
   
102,042
   
13,270,039
   
43,900
   
-
   
-
   
-
   
(15,299,053
)
  
(1,883,072
)
                                                         
Stock issued for consulting
    
4,592,915
   
4,593
   
80,336
   
-
   
-
   
-
   
-
   
-
   
84,929
 
                                                         
Beneficial conversion feature
    
-
   
-
   
619,513
   
-
   
-
   
-
   
-
   
-
   
619,513
 
                                                         
Net loss for the period
June 30, 2007
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,101,520
)
  
(1,101,520
)
                                                         
Balance June 30, 2007
    
106,635,201
 
$
106,635
  
$
13,969,888
  
$
43,900
  
$
-
  
$
-
  
$
-
  
$
(16,400,573
)
$
(2,280,150
)
 
The accompanying notes form an integral part of these unaudited financial statements
 
 
1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Sionix Corporation (the "Company") was incorporated in Utah in 1985. The Company was formed to design, develop, and market automatic water filtration system primarily for small water districts.

The Company has completed its reincorporation as a Nevada corporation, effective July 1, 2003. The reincorporation was completed pursuant to an Agreement and Plan of Merger between Sionix Corporation, a Utah corporation ("Sionix Utah") and its wholly-owned Nevada subsidiary, Sionix Corporation ("Sionix Nevada"). Under the merger agreement, Sionix Utah merged with and into Sionix Nevada, and each share of Sionix Utah’s common stock was automatically converted into one share of common stock, par value $0.001 per share, of Sionix Nevada. The merger was effected by the filing of Articles of Merger, along with the Agreement and Plan of Merger, with the Secretary of State of Nevada.
 
 
The Company is a development stage company as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises.” The Company is in the development stage and its efforts have been principally devoted to research and development, organizational activities, and raising capital. All losses accumulated since inception has been considered as part of the Company’s development stage activities.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
BASIS OF PRESENTATION
 
The unaudited financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these consolidated financial statements reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. The results of the nine month periods ended June 30, 2007 are not necessarily indicative of the results to be expected for the full year ending September 30, 2007.

REVENUE RECOGNITION

The Company’s policy to recognize revenues is in accordance with SEC Staff Accounting Bulletin No. 101, or other specific authoritative literature, as applicable. Accordingly, revenues from products sales are recorded when all four of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; ( iii) the Company’s price to the buyer is fixed or determinable; and (iv) collectibility is reasonably assured. The Company’s policy is to report its sales levels on a net revenue basis, with net revenues being computed by deducting from gross revenues the amount of actual sales returns and the amount of reserves established for anticipated sales returns.

The Company’s policy for shipping and handling costs, billed to customers, is to include it in revenue in accordance with Emerging Issues Task Force ("EITF") issue No. 00-10, "Accounting for Shipping and Handling Revenues and Costs." The purpose of this issue was to clarify the classification of shipping and handling revenues and costs. The consensus reached was that all shipping and handling billed to customers should be recorded as revenue. Accordingly, the Company records its shipping and handling amounts within net sales and operating expenses.

The Company has not earned any revenue since its inception to the date of this report.
 
STOCK-BASED COMPENSATION
 

Effective October 1, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123-R, “Share-Based Payment”   (“SFAS 123-R”), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including stock options based on their fair values. SFAS 123-R supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”   (“APB 25”), which the Company previously followed in accounting for stock-based awards. In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (SAB 107) to provide guidance on SFAS 123-R. The Company has applied SAB 107 in its adoption of SFAS 123-R.
 
NET LOSS PER SHARE
 
Net loss per share is calculated in accordance with Statement of Financial Accounting Standards No. 128, Earnings Per Share (“SFAS 128”). Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
 
ESTIMATES
 
The preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ from those estimates
 
ADVERTISING

The cost of advertising is expensed as incurred. Total advertising costs were $3,385 and $3,310 for the nine month periods ended June 30, 2007 and 2006, respectively.
 
RECLASSIFICATION
 
For comparative purposes, prior period’s consolidated financial statements have been reclassified to conform to report classifications of the current period.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This statement clarifies the definition of fair value, establishes a framework for measuring fair value and expands the disclosures on fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. Company management is currently evaluating the effect of this pronouncement on financial statements.
 
 
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans−−an amendment of FASB Statements No. 87, 88, 106, and 132(R)". One objective of this standard is to make it easier for investors, employees, retirees and other parties to understand and assess an employer's financial position and its ability to fulfill the obligations under its benefit plans. SFAS No. 158 requires employers to fully recognize in their financial statements the obligations associated with single−employer defined benefit pension plans, retiree healthcare plans, and other postretirement plans. SFAS No. 158 requires an employer to fully recognize in its statement of financial position the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This Statement also requires an employer to measure the funded status of a plan as of the date of its year−end statement of financial position, with limited exceptions. SFAS No. 158 requires an entity to recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS No. 87. This Statement requires an entity to disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. The Company is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures for fiscal years ending after December 15, 2006. Company management is currently evaluating the effect of this pronouncement on financial statements.

In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements.

The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities.
 
Note 3. PROPERTY AND EQUIPMENT
 
Equipment and machinery
 
$
213,166
  
Furniture and fixtures
   
22,183
  
 
        
 
    
235,349
  
Less accumulated depreciation
   
(188,950
)
 
        
 
  
$
46,399
  
 
Depreciation expenses for the nine month periods ended June 30, 2007 and 2006 were $23,723 and $23,486, respectively.
 
Note 4. ACCRUED EXPENSES
 

 Accrued expenses comprised of the following at June 30, 2007:
 
Payroll taxes
  
$
142,672
  
Accrued salaries
    
1,098,182
  
Interest payable
    
120,767
  
Other accruals
    
163,776
  
         
Total
  
$
1,525,397
  

Note 5. NOTES PAYABLE

RELATED PARTIES

The Company has received advances in the form of unsecured promissory notes from stockholders in order to pay ongoing operating expenses. These notes are at interest rates up to 13% and are due on demand. As of June 30, 2007, notes payable amounted to $129,000. The Company recorded $27,315 interest expense for the nine month period ended June 30, 2007.

OFFICERS

Notes payables to officers are unsecured, interest free and due on demand. Proceeds from these notes payable were used to pay ongoing operating expense. The balance at June 30, 2007 was $32,860.
 
Note 6. NOTES PAYABLE UNDER EQUITY LINE OF CREDIT

During the year ended September 30, 2003, the Company received $1,307,500 proceeds from promissory notes to Cornell Capital Partners, LP, net of 4% fee of $56,000 and $36,500 for escrow and other fees. The Company has settled $900,000 by issuing shares of common stock during the year ended September 30, 2003 (note 7). The notes payable outstanding at September 30, 2003, amounted to $500,000. The balance for the notes payable outstanding at September 30, 2004 and 2005 were $ 233,115 and $233,115, respectively. In 2006, Company has entered into a settlement agreement with Cornell Capital Partner to pay the total amount of $327,336; $50,000 shall be paid on or before November 15, 2006, $25,000 payable per month on the 15th day of each month commencing December 15, 2006, with the balance of $27,336 due and payable on or before October 15, 2007. The Company recorded loss on settlement of debt of $94,221 for the year ended September 30, 2006.

The balance payable was $102,336 as of June 30, 2007.

Note 7. CONVERTIBLE NOTES

During the nine month period ended June 30, 2007, the Company entered into various debenture agreements (the “Bridge Notes”) with several investors. Under the terms of the agreements, the notes bear interest at the rate of 10% per annum. The notes will automatically mature and the entire outstanding principal amount, together with all unpaid and accrued interest, shall become due and payable after the earlier of (i) the eighteen (18) month anniversary of the date of issuance (ii) an event of default or (iii) the closing of any equity related financing by the Company in which the gross proceeds to the Company are at least $2,500,000, unless, prior to such time, the notes have been converted into shares of the Company’s common stock.
 
 
The notes are convertible into shares of Common stock of the Company at $0.05 per share or shares of any equity security issued by the Company at a conversion price equal to the price at which such security is sold to any other party.

The conversion price is adjustable as per the terms of the agreement for the subsequent issuances of equity security at a price different than the conversion price.

The conversion price is also adjustable if a registration statement covering the underlying shares is not declared effective within 180 days after the closing, but in no case the conversion price to be reduced below $0.04 per share.

As of June 30, 2007 the Company had received $836,000 under the Bridge Notes.

On July 18, 2007 Sionix completed an offering of $1,025,000 of Subordinated Convertible Debentures to a group of institutional and accredited investors. The Subordinated Convertible Debentures are convertible into shares of Common Stock of Sionix at an initial conversion rate of $ .22 per share, subject to anti-dilution adjustments. For each $100,000 of Convertible Debentures purchased, the investor received Warrants to purchase 227,272 shares of Common Stock. Each Warrant entitles the holder to purchase one share of common stock of Sionix (the "Warrant Shares") for a period of five years at a price of $0.50 per Warrant Share.

Under the terms of the Registration Rights Agreement, Sionix is required to file a registration statement under the Securities Act of 1933 Act in order to register the resale of the shares of Common Stock issuable upon conversion of the Subordinated Convertible Debentures and the Warrant Shares (collectively, the "Registrable Securities"). If Sionix does not file a registration statement with respect to the Registrable Securities within forty-five days following the closing of the Offering, or if the Registration Statement is not declared effective by the Securities and Exchange Commission within 90 days, then Sionix must pay to each purchaser damages equal to 1.5% of the purchase price paid by the purchaser for its Subordinated Convertible Debentures, for each 30 days that transpires after these deadlines. The amount of the aggregate damages payable by Sionix is limited to 15% of the purchase price.

Southridge Investment Group LLC, Ridgefield, Connecticut (“Southridge”) acted as agent for Sionix in arranging the transaction, and received a placement fee of $102,500. Southridge also received warrants to purchase 698,863 shares of Common Stock of Sionix, on the same terms and conditions as the Warrants issued to the purchasers.

As part of the above offering the Company received $500,000 of financing under the convertible debenture and issued 1,136,364 warrants as of June 30, 2007. The grant date fair value of the warrants amounted to $318,939 was calculated using the Black-Scholes option pricing model, using the following assumptions: risk free rate of return of 6%, volatility of 195.97%, and dividend yield of 0% and expected life of five years.

As of June 30, 2007, the Company recorded beneficial conversion feature expense of $75,827 and the unamortized beneficial conversion feature amount of $353,082 and unamortized warrant discount of 190,604 showing as net of the note payable amount of $1,336,000. The Company recorded an interest expense of $46,464 on the notes.

 
Note 8. STOCKHOLDERS’ EQUITY

COMMON STOCK

The Company has 150,000,000 authorized shares, par value $ .001 per share. As of June 30, 2007, the Company had 107,117,101 shares issued and 106,635,201 shares outstanding.

During the nine month period ended June 30, 2007, the company issued 3,292,915 shares, valued at $0.01 per share, and 1,300,000 shares valued at $0.04 per share for consulting services recorded at the fair market value.

STOCK OPTIONS

2001 Executive Officers Stock Option Plan

In October of 2000, the company entered into amendments to the employment agreements with each of the executive officers, eliminating the provisions of stock bonuses. In lieu of the bonus provision, the Company adopted the 2001 Executive Officers Stock option Plan. The Company reserved 7,576,680 shares for issuance under the plan.
 
Options outstanding:
 
 
Weighted average exercise price
Number of outstanding options
Aggregate intrinsic value
Outstanding as of
September 30, 2006
$0.15
7,343,032
$-
Granted
      
Forfeited
      
Exercised
      
Outstanding as of
June 30, 2007
$0.15
7,343,032
$881,165
 
A summary of the Company’s option activity is listed below:
 
               
Weighted-
  
Weighted-
  
           
Weighted-
  
Average
 
Average
  
           
Average
  
Exercise
 
Exercise
  
 
  
Stock
  
Stock
  
Remaining
  
Price of
  
Price of
  
Exercise
 
Options
 
Options
 
Contractual
 
Options
 
Options
  
Price
 
Outstanding
 
Exercisable
 
Life
 
Outstanding
  Exercisable  
$0.15
   7,343,032    7,343,032    3 years  
$0.15
  
$0.15
  
 
The fair value of the options was calculated using the Black-Scholes option valuation model with the following weighted-average assumptions: Dividend yields of 0%; risk free interest rates of 6%; expected volatility of 100% and expected lives of 4.9 years.
 
 
All options were vested prior to September 30, 2006. No options are vested during the nine month period ended June 30, 2007.
 

Note 9. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of its liabilities in the normal course of business. Through June 30, 2007, the Company had incurred cumulative losses of $16,400,573, including a current loss of $1,101,520. The Company’s successful transition from a development stage company to attaining profitable operations is dependent upon obtaining financing adequate to fulfill its research and development activities, production of its equipment and achieving a level of revenues adequate to support the Company’s cost structure. Management’s plan of operations anticipates that the cash requirements for the next twelve months will be met by obtaining capital contributions through the sale of common stock and cash flow from operations. However, there is no assurance that the Company will be able to implement its plan.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
GENERAL. The following discussion and analysis should be read in conjunction with our Financial Statements and Notes thereto, included elsewhere in this Quarterly Report on Form 10-QSB. Except for the historical information contained in this report, the following discussion contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in our most recent Annual Report on Form 10-KSB should be read as being applicable to all related forward-looking statements wherever they appear in this Report. Our actual results may differ materially from the results discussed in the forward-looking statements, as a result of certain factors including, but not limited to, those discussed elsewhere herein and in our most recent Annual Report on Form 10-KSB.

PLAN OF OPERATION. During the next twelve months we plan to continue testing of the ELIXIR unit at the Villa Park Dam under our arrangement with the Serrano Water District. We believe that if the unit operates successfully, we will be in a position to aggressively market the ELIXIR product, using the Villa Park Dam unit as a prototype for additional installations. We plan to engage in substantial promotional activities in connection with the installation and operation of the unit, including media exposure and access to other public agencies and potential private customers. If the unit continues to operate successfully, we believe we will receive orders for additional units.
 
Depending on the availability of financing, we plan to establish a manufacturing facility in Southern California to commence production of the units. Depending on the size of the planned facility, we believe it may require capital expenditures in the range of $5 million to $20 million. In addition to capital expenditures, this will require hiring of a substantial number of additional employees. We anticipate that all of our capital needs will need to be funded by equity financing.
 
 
RESULTS OF OPERATIONS (THREE MONTHS ENDED JUNE 30, 2007 COMPARED TO THREE MONTHS ENDED JUNE 30, 2006). The Company was relatively inactive during the quarter ended June 30, 2006 due to lack of resources. During the first nine months of fiscal 2007, the Company raised capital through the sale of Convertible Debentures, and was able to resume activities in the first quarter of fiscal 2007. Revenues for both the three month period ended June 30, 2006 and the three month period ended June 30, 2007 were zero, as the Company has not yet commenced the sale of products. General and administrative expenses for the period of three months ended June 30, 2007 totaled $444,544, an increase of $202,308 over the $242,236 incurred in the corresponding period in 2006, due to the resumption of development and capital-raising activities. Interest expense increased to $74,307 from $2,406 in the 2006 quarter, representing interest on Convertible Debentures issued during the past nine months.
 
As a result of these items, the loss for the three months ended June 30, 2007 was $527,732, an increase of $275,245 over the loss of $252,387 for the corresponding period in the 2006 fiscal year.
 
LIQUIDITY AND CAPITAL RESOURCES. On June 30, 2007, the Company had cash and cash equivalents of $455,563. The sole source of liquidity has been borrowings from affiliates and the sale of securities. Management anticipates that additional capital will be required to finance the Company's operations. The Company believes that anticipated proceeds from sales of securities and other financing activities, plus possible cash flow from operations during the 2007 fiscal year, will be sufficient to finance the Company's operations. However, the Company has no commitments for financing, and there can be no assurance that such financing will be available or that the Company will not encounter unforeseen difficulties that may deplete its capital resources more rapidly than anticipated. Also, the Company may not be able to generate revenues from operations during the fiscal year.
 
As of June 30, 2007, the Company had an accumulated deficit of $16,400,573. It can be expected that the future operating results will continue to be subject to many of the problems, expenses, delays and risks inherent in the establishment of a developmental business enterprise, many of which the Company cannot control.
 
GOING CONCERN OPINION. We currently have insufficient assets to continue our operations, unless we secure additional financing. As a result of our ongoing losses, lack of revenues from operations, and accumulated deficits, there is doubt about our ability to continue as a going concern.
 
ITEM 3. CONTROLS AND PROCEDURES.
 
At the end of the period covered by this Form 10-QSB, the Company's management, including its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer determined that such controls and procedures are effective to ensure that information relating to the Company required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
 
There have been no changes in the Company's internal controls over financial reporting that were identified during the evaluation that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any material pending legal proceedings.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period of three months ended June 30, 2007 the Company issued Convertible Debentures in the amount of $569,000 to three accredited investors.

The Company believes such sales were exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4 (2) thereof and Regulation D thereunder.
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

10.1 Form of Securities Purchase Agreement, dated as of June 18, 2007, between Sionix Corporation and certain investors.

10.2 Form of Convertible Debenture, dated as of June 18, 2007, issued by Sionix Corporation to certain investors.

10.3 Form of Registration Rights Agreement, dated as of June 18, 2007, between Sionix Corporation and certain investors.

10.4 Form of Warrant, dated as of June 18, 2007, issued by Sionix Corporation to certain investors.

31.1 Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
     
 
SIONIX CORPORATION
Date: August 14, 2007
 		  
 		  
 
 
By:  
 /s/ James J. Houtz
 
James J. Houtz, President
   
 
By:  
 /s/ Robert McCray
 
Robert McCray, Chief Financial Officer

 
 EX-10.1 2 v084221_ex10-1.htm
SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of June 18, 2007, among SIONIX CORPORATION, a corporation organized under the laws of the State of Nevada (“Sionix”), and [investors to be identified by Southridge Investment Group, LLC] (collectively, “Purchaser”).

WHEREAS, Purchaser and Sionix are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”);

WHEREAS, Purchaser desires to purchase, and Sionix desires to issue, upon the terms and conditions set forth in this Agreement, a subordinated convertible debenture and a common stock warrant of Sionix in consideration for the payment by Purchaser to Sionix of up to [one million dollars ($1,000,000.00)] in cash; and

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
 
1.  PURCHASE AND SALE OF SUBORDINATED CONVERTIBLE DEBENTURE.

a.  Purchase of Subordinated Convertible Debenture. On the Closing Date (as defined below), Sionix shall issue and deliver to Purchaser, and Purchaser agrees to purchase from Sionix, (i) a duly executed 8% subordinated convertible debenture in the principal amount of up to [one million dollars ($1,000,000)] (the “Debenture”) and (ii) a stock warrant to purchase __________ [insert number for 50% warrant coverage] shares of Sionix common stock (the “Warrant”) in consideration for $[1,000,000.00] cash (the “Purchase Price”).

b.  Closing Date. Subject to the satisfaction (or waiver) of the conditions thereto set forth in Section 5 and Section 6 below, the date and time of the sale of the Debenture pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon New York City Time on June 18, 2007 or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

c.  Form of Payment. On the Closing Date, (i) Purchaser shall pay the Purchase Price in United States dollars by wire transfer of immediately available funds to an account designated in writing by Sionix for such purpose, against delivery of the Debenture and the Warrant, and (ii) Sionix shall deliver to Purchaser the Debenture and Warrant duly executed on behalf of Sionix, against delivery of the Purchase Price.
 
2.  PURCHASER’S REPRESENTATIONS AND WARRANTIES. Purchaser represents and warrants to Sionix that:
 
 
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a.  Accredited Purchaser; Investment Purpose. Purchaser represents that it is an “Accredited Investor” as defined in Regulation D under the 1933 Act. Purchaser is purchasing the Debenture for its own account for investment purposes only and not with a view toward, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1993 Act and applicable state securities laws; provided, however, that by making the representations herein, Purchaser does not agree to hold the Debenture for any minimum or other specific term and reserves the right to dispose of the Debenture at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act and applicable state securities laws.

b.  Reliance on Exemptions. Purchaser understands that the Debenture is being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that Sionix is relying upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Debenture.

c.  Information. Purchaser and its advisors, if any, have been furnished with materials relating to the business, finances and operations of Sionix and materials relating to the offer and sale of the Debenture which have been requested by Purchaser or its advisors. Neither such inquiries nor any other due diligence investigation conducted by Purchaser or any of its advisors or representatives shall modify, amend or affect Purchaser’s right to rely on Sino’s representations and warranties contained in Section 3 below. Purchaser understands that its investment in the Debenture involves a significant degree of risk.

d.    Governmental Review. Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Debenture.

e.  Transfer or Resale. Purchaser understands that (i) the sale or resale of the Debenture and the Warrant and any underlying conversion shares of common stock has not been and is not being registered under the 1933 Act or any applicable state securities laws, and the Debenture and the Warrant may not be transferred unless (a) the Debenture, the Warrant and the common stock, par value $0.001 per share, of Sionix, issuable upon conversion of the Debenture (the “Conversion Shares”) and upon exercise of the Warrant (the “Warrant Shares”) are sold pursuant to an effective registration statement under the 1933 Act, (b) the Debenture, the Warrant, the Conversion Shares and the Warrant Shares are sold or transferred pursuant to an exemption from such registration, (c) the Debenture, the Warrant, the Conversion Shares and the Warrant Shares are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of Purchaser who agrees to sell or otherwise transfer the Debenture or the Warrant only in accordance with this Section 2(e) and who is an Accredited Investor, or (d) the Debenture, the Warrant, the Conversion Shares and the Warrant Shares are sold pursuant to Rule 144, if such Rule is available; (ii) any sale of such Debenture, Warrant, Conversion Shares and Warrant Shares made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such Debenture, Warrant, Conversion Shares and Warrant Shares under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither Sionix nor any other person is under any obligation to comply with the terms and conditions of any exemption under the 1933 Act.
 
 
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f.  Legends. Purchaser understands that the Debenture, the Warrant, the Conversion Shares and the Warrant Shares shall bear a restrictive legend in the following form:

“NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.”

g.  Authorization; Enforcement. This Agreement has been duly and validly authorized by Purchaser. This Agreement has been duly executed and delivered on behalf of Purchaser, and this Agreement constitutes a valid and binding agreement of Purchaser enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

h.  No Brokers. Purchaser has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby.
 
3.  REPRESENTATIONS AND WARRANTIES OF SIONIX. Sionix represents and warrants to Purchaser that:

a.  Authorization; Enforcement. (i) Sionix has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and to sell the Debenture and the Warrant in accordance with the terms hereof, (ii) the execution and delivery of this Agreement by Sionix and the consummation by it of the transactions contemplated hereby (including without limitation, the sale of the Debenture to Purchaser) have been duly authorized by Sionix and no further consent or authorization of Sionix or its shareholders is required, (iii) this Agreement has been duly executed and delivered by Sionix, and (iv) this Agreement constitutes a legal, valid and binding obligation of Sionix enforceable against Sionix in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies or by other equitable principles of general application
 
 
- 3 -
 
 
b.  No Conflicts. The execution, delivery and performance of this Agreement by Sionix and the consummation by Sionix of the transactions contemplated hereby (including, without limitation, the sale of the Debenture and Warrant to Purchaser) will not (i) conflict with or result in a violation of any provision of its certificate of formation or other organizational documents, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, note, bond, indenture or other instrument to which Sionix is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which Sionix is subject) applicable to Sionix or by which any property of Sionix are bound or affected. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable federal and state securities laws, Sionix is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement in accordance with the terms hereof. Except for filings that may be required under applicable federal and state securities laws in connection with the issuance and sale of the Debenture and the Warrant, all consents, authorizations, orders, filings and registrations which Sionix is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.

c.  No Brokers. Sionix has taken no action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby except as disclosed in this Section 3(c):

Southridge Investment Group LLC is entitled to those cash and equity fees as provided for in that certain Investment Banking Engagement Letter dated as of February 12, 2007, as modified by that certain Investment Banking Engagement Letter Addendum dated as of May 29, 2007.

d.  Issuance of Securities. The issuance of the Debenture and the Warrant are duly authorized and upon issuance in accordance with the terms hereof shall be free from all taxes, liens and charges with respect to the issue thereof. As of the Closing, a number of shares of Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds 130% of the aggregate of the maximum number of shares of Common Stock issuable (i) upon conversion of the Debenture and (ii) upon exercise of the Warrant. Upon conversion or exercise in accordance with the Debenture or the Warrant, as the case may be, the Conversion Shares and the Warrant Shares, respectively, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations and warranties set forth in Section 2 of this Agreement, the offer and issuance by the Company of the Debenture and the Warrant is exempt from registration under the 1933 Act.
 
 
- 4 -
 
 
4.  COVENANTS.

a.  Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 5 and Section 6 of this Agreement.

b.  Financial Reporting. Subsequent to Closing Date, Sionix will take no action which would adversely affect Purchaser’s ability to use Rule 144. Sionix shall make and keep public information available, as those terms are understood and defined in Rule 144 and shall file with the SEC in a timely manner all reports and other documents required of Sionix under the 1933 Act and the Securities Exchange Act of 1934, as amended.
 
c.  Reservation of Shares. Sionix shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 130% of the sum of the number of shares of Common Stock issuable (i) upon conversion of the Debenture issued at the Closing and (ii) upon exercise of the Warrant issued at the Closing (without taking into account any limitations on the conversion of the Debenture or exercise of the Warrant set forth in the Debenture and Warrant, respectively).
 
5.  CONDITIONS TO SIONIX’S OBLIGATION TO SELL. The obligation of Sionix hereunder to sell and deliver the Debenture and the Warrant to Purchaser at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for Sionix’s sole benefit and may be waived by Sionix at any time in its sole discretion:

a.  Purchaser shall have executed this Agreement and delivered the same to Sionix.

b.  Purchaser shall have delivered the Purchase Price in accordance with Section 1(c) above.

c.  Purchaser shall have executed the Registration Rights Agreement between Sionix and Purchaser, dated as of the date of the Closing, in substantially the form of Exhibit A attached to this Agreement (the “Registration Rights Agreement”), and delivered the same to Sionix.

d.  The representations and warranties of Purchaser shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and Purchaser shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Purchaser at or prior to the Closing Date.
 
 
- 5 -
 
 
e.  No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
 
6.  CONDITIONS TO PURCHASER’S OBLIGATION TO PURCHASE. The obligation of Purchaser hereunder to purchase the Debenture at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in its sole discretion.

a.  Sionix shall have executed this Agreement and delivered the same to Purchaser.

b.  Sionix shall have delivered to Purchaser duly executed Debenture and Warrant (in such denominations as Purchaser shall reasonably request) in accordance with Section 1(c) above.

c.  Sionix shall have executed the Registration Rights Agreement and delivered the same to Purchaser.

d.  The representations and warranties of Sionix shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and Sionix shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Sionix at or prior to the Closing Date.

e.  No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
 
7.  GOVERNING LAW; MISCELLANEOUS. 
 
 
- 6 -
 
 
a.  Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITH SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT ANY PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTIES HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

b.  Attorneys’ Fees. At the Closing, Sionix shall reimburse the Purchaser for its reasonable counsel’s fees, incurred in connection with the preparation of this Agreement and the other agreements related hereto, and the investigation of and the consummation of the transactions contemplated hereby, in a sum not to exceed $10,000, which fee may be disbursed directly at Closing from escrow.

c.  Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission or electronic mail transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. A facsimile or electronic mail transmission of this signed Agreement shall be legal and binding on all parties hereto. 

d.  Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

e.  Severability. In the event that any provision of this Agreement is invalid or enforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

f.  Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Sionix nor Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.
 
 
- 7 -
 
 
g.  Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile or by electronic mail either in the text of an email message or attached in a commonly readable format, and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally, by courier (including a recognized overnight delivery service) or by facsimile, or one day after electronically mailed if the sender has received no generated notice that the email message has not been successfully delivered, in each case addressed to a party. The addresses for such communications shall be:

If to Sionix:

2082 Michelson Drive, Suite 304
Irvine, CA 92612
Attention: _______________
Facsimile: (949) 752-7998
Email:

with a copy to:

____________________
____________________
____________________
Attention: 
Facsimile:
Email:
 
If to Purchaser:

____________________
____________________
____________________
Attention: 
Facsimile:
Email:

with a copy to:

Gersten Savage LLP
600 Lexington Avenue, 9th Floor
New York, NY 10022
Attention: David E. Danovitch, Esq.
Facsimile: (212) 980-5192
Email: ddanovitch@gerstensavage.com
 
 
- 8 -
 

Each party shall provide notice to the other party of any change in address.

h.  Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither Sionix nor Purchaser shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(e), Purchaser may assign its rights hereunder to any person that purchases the Debenture, the Warrant, any Conversion Shares or any Warrant Shares in a private transaction from Purchaser or to any of its “affiliates,” as that term is defined under the 1933 Act, without the consent of Sionix.

i.  Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

j.  Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

k.  No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

[Remainder of page intentionally left blank.]
 
 
- 9 -
 
 
IN WITNESS WHEREOF, Purchaser and Sionix have caused this Securities Purchase Agreement to be duly executed as of the date first above written.
 
    PURCHASER:
 
 		  
 		  
[_________________]
   
    By:
 
Name:
 
Title:
 
    SIONIX:
 
 		  
 		  
SIONIX CORPORATION
   
    By:
 
Name:
 
Title:
 
 
- 10 -
 
 
Exhibit A

[Form of Registration Rights Agreement]
 
 
- 11 -
 
 
 EX-10.2 3 v084221_ex10-2.htm Unassociated Document
 
THIS DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (COLLECTIVELY, THE “SECURITIES”), HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES ARE “RESTRICTED” AND MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT.
 
SUBORDINATED CONVERTIBLE DEBENTURE
 
SIONIX CORPORATION
 
Subordinated Convertible Debenture
 
June ___, 2007
 
No. __________
$[1,000,000]

THIS DEBENTURE IS ONE IN A SERIES OF SUBORDINATED CONVERTIBLE DEBENTURES (“DEBENTURE(S)”) ISSUED BY SIONIX CORPORATION PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT OF EVEN DATE HEREWITH.
 
This Subordinated Convertible Debenture is issued by Sionix Corporation, a Nevada corporation (“Sionix” or the “Company”), to ___________________ (together with its permitted successors and assigns, the “Holder”) pursuant to exemptions from registration under the Securities Act of 1933, as amended (the “1933 Act”).
 
ARTICLE I. 
 
Section 1.01  Principal. For value received, on June 18, 2007 (the “Issuance Date”), the Company hereby promises to pay to the order of the Holder in lawful money of the United States of America and in immediately available funds the principal sum of [one million and 00/100 dollars (US$1,000,000)], plus accrued interest in the amount of eight percent (8%) per year for all outstanding principal on June 17, 2008 (the “Maturity Date”). The principal plus accrued interest of this Debenture, less any amounts required by law to be deducted, is payable monthly, and shall be either paid to the registered holder of this Debenture (a) in United States dollars, at the address last appearing on the Debenture Register of the Company as designated in writing by the Holder, or (b) converted into shares of the Company’s common stock, $0.001 par value per share (“Common Stock”) in accordance with Section 1.02 herein; provided, however, that in no event shall the Holder be entitled to convert this Debenture for a number of shares of Common Stock in excess of that number of shares of Common Stock which, upon giving effect to such conversion, would cause the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates to exceed 4.999% of the outstanding shares of the Common Stock following such conversion, as further set forth in Section 6.05 herein.
 
 
The forwarding of a check or wire transfer shall constitute a payment hereunder and shall satisfy and discharge the liability for principal on this Debenture to the extent of the sum represented by such check or wire transfer plus any amounts so deducted; provided, however, that the check has cleared the Holder’s bank account or the payment by wire transfer is made in immediately available funds.
 
Section 1.02  Optional Conversion. The Holder is entitled, at its option, to convert, and sell on the same day, at any time and from time to time, until payment in full of this Debenture, all or a portion of the principal amount of this Debenture plus accrued interest into shares of Common Stock (the “Conversion Shares”) at a conversion price for each share of Common Stock equal to $0.22 (the “Conversion Price”). The amount of shares issuable pursuant to a conversion shall equal the principal amount (or portion thereof) of the Debenture to be converted, plus accrued interest, divided by the Conversion Price.
 
Conversion shall be effectuated by surrendering the Debenture to the Company, accompanied by or preceded by facsimile or other delivery to the Company of the form of conversion notice attached hereto as Exhibit A, executed by the Holder evidencing such Holder's intention to convert a specified portion hereof. No fractional shares of Common Stock or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. The date on which notice of conversion is given (the “Conversion Date”) shall be deemed to be the date on which the Holder faxes or otherwise delivers the conversion notice (the “Notice of Conversion”), substantially in the form annexed hereto as Exhibit A, duly executed, to the Company. Facsimile delivery of the Notice of Conversion shall be accepted by the Company at facsimile number (949) 752-7998, Attention: ____________. Certificates representing Common Stock upon conversion will be delivered within three (3) business days from the Conversion Date (the “Delivery Date”).

The Company understands that a delay in the issuance of the Conversion Shares beyond the Delivery Date (as defined in this Section) could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay late payments to the Holder for late issuance of the Conversion Shares, unless the delay is due to causes beyond the reasonable control of the Company or the Company’s Transfer Agent, in accordance with the following schedule (where “Number of Business Days Late” refers to the number of business days which is beyond three (3) Business Days after the Delivery Date):
 
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Number of Business Days Late
Late Payment For Each $10,000 of Debenture Principal or Interest Amount Being Converted
1
$100
2
$200
3
$300
4
$400
5
$500
6
$600
7
$700
8
$800
9
$900
10
$1,000
> 10
$1,000 + $200 for each Business Day Late beyond 10 days

As used herein, “Business Day” means any day that is not a Saturday, Sunday, or legal holiday in the State of New York when commercial banking institutions are required to be closed.

The Company shall pay any payments incurred under this Section in immediately available funds upon demand as the Holder’s remedy for such delay. Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of such Conversion Shares by close of business on the Delivery Date, unless such failure is due to causes beyond the Company’s reasonable control or that of its Transfer Agent, the Holder will be entitled to revoke the relevant Notice of Conversion by delivering a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion; provided, however, that an amount equal to any payments contemplated by this Section which have accrued through the date of such revocation notice shall remain due and owing to the Converting Holder (as defined below) notwithstanding such revocation.

If, by the relevant Delivery Date, the Company fails, unless such failure is due to causes beyond the Company’s reasonable control or that of its Transfer Agent, for any reason to deliver the Conversion Shares to be issued upon conversion of the Debenture and after such Delivery Date, the Holder of the Debenture being converted (a “Converting Holder”) purchases, in an arm’s-length open market transaction or otherwise, shares of Common Stock (the “Covering Shares”) in order to make delivery in satisfaction of a sale of Common Stock by the Converting Holder (the “Sold Shares”), which delivery such Converting Holder anticipated to make using the shares to be issued upon such conversion (a “Buy-In”), the Converting Holder shall have the right, to require the Company to pay to the Converting Holder, in addition to and not in lieu of the amounts due hereunder, the Buy-In Adjustment Amount (as defined below).
 
3
 
The “Buy-In Adjustment Amount” is the amount equal to the excess, if any, of (x) the Converting Holder's total purchase price (including brokerage commissions, if any) for the Covering Shares over (y) the net proceeds (after brokerage commissions, if any) received by the Converting Holder from the sale of the Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Company in immediately available funds immediately upon demand by the Converting Holder. By way of illustration and not in limitation of the foregoing, if the Converting Holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required to pay to the Converting Holder will be $1,000.

In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company’s Transfer Agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of the Holder and its compliance with the provisions contained in this paragraph, so long as the certificates therefore do not bear a legend and the Holder thereof is not obligated to return such certificate for the placement of a legend thereon, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.

The Holder of the Debenture shall be entitled to exercise its conversion privilege with respect to the Debenture notwithstanding the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of such Holder’s conversion privilege. The Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Debenture.

Section 1.03  Reservation of Common Stock. The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Debenture, such number of shares of Common Stock as shall from time to time be sufficient to effect such conversion, based upon the Conversion Price. If at any time the Company does not have a sufficient number of Conversion Shares authorized and available, then the Company shall call and hold a special meeting of its stockholders within sixty (60) days of that time for the sole purpose of increasing the number of authorized shares of Common Stock.
 
Section 1.04  Registration Rights. The Company is obligated to register the resale of the Conversion Shares under the 1933 Act, pursuant to the terms of a Registration Rights Agreement, between the Company and the Holder of even date herewith (the “Registration Rights Agreement”).
 
Section 1.05  Paying Agent and Registrar. Initially, the Company will act as paying agent and registrar. The Company may change any paying agent, registrar, or Company-registrar by giving the Holder not less than ten (10) business days’ written notice of its election to do so, specifying the name, address, telephone number and facsimile number of the paying agent or registrar. The Company may act in any such capacity.
 
4
 
Section 1.06  Denominations. The Debenture is issuable in denominations of Ten Thousand Dollars (US$10,000) and integral multiples thereof. The Debenture is exchangeable for an equal aggregate principal amount of Debenture of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for such registration or transfer or exchange.
 
Section 1.07  Right of Redemption. The Company shall have the right to redeem this Debenture at any time by providing written notice to the Holder by making a cash payment to the Holder of the outstanding principal amount of the Debenture multiplied by a premium according to the following schedule, plus all accrued interest: 110% of the outstanding principal amount if redeemed within 120 days after the Issuance Date; 115% of the outstanding principal amount if redeemed between 121 days and within 240 days after the Issuance Date; 125% of the outstanding principal amount if redeemed after 240 days after the Issuance Date. Written notice to the Holder shall be received at least 5 business days prior to the date of redemption payment (“Redemption Date”). If the redemption payment is not made on or before the Redemption Date, the redemption notice shall be rendered null and void and the Holder thereafter shall have the right to convert any portion of the outstanding principal of the Debenture.
 
Section 1.08  Subordinated Nature Of Debenture. This Debenture and all payments hereon, including principal or interest, shall be subordinate and junior in right of payment to the October 2005 senior secured bridge.
 
ARTICLE II.  
 
Section 2.01  Amendments and Waiver of Default. The Debenture may not be amended. Notwithstanding the above, without the consent of the Holder, the Debenture may be amended to cure any ambiguity, defect or inconsistency, or to provide for assumption of the Company obligations to the Holder.
 
ARTICLE III.  
 
Section 3.01  Events of Default. The following shall constitute an “Event of Default”:
 
(a) The Company shall default in the payment of principal and interest on this Debenture and same shall continue for a period of five (5) days; or
 
(b) Any of the representations or warranties made by the Company herein, in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with the execution and delivery of this Debenture shall be false or misleading in any material respect at the time made; or
 
(c) The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of the Debenture and such failure shall continue uncured for a period of ten (10) days after written notice from the Holder of such failure; or
 
5
 
(d) The Company fails to authorize or to cause its Transfer Agent to issue shares of Common Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Debenture, fails to transfer or to cause its Transfer Agent to transfer any certificate for shares of Common Stock issued to the Holder upon conversion of this Debenture and when required by this Debenture, and such transfer is otherwise lawful, or fails to remove any restrictive legend on any certificate or fails to cause its Transfer Agent to remove such restricted legend, in each case where such removal is lawful, as and when required by this Debenture, and any such failure shall continue uncured for ten (10) business days; or

(e) The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

(f) A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

(g) Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or

(h) Any money judgment, writ or warrant of attachment, or similar process in excess of one hundred thousand dollars ($100,000) in the aggregate shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

(i) Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; or

(j) The Company shall have its Common Stock suspended or delisted from an exchange or over-the-counter market from trading for in excess of five (5) trading days; or

(k) Breach by the Company of its obligations under the Securities Purchase Agreement, the Registration Rights Agreement or any other agreement entered into on the date hereof between the Company and the Holder which is not cured by the Company within ten (10) days after receipt of written notice thereof.
 
6
 
Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider all obligations under this Debenture immediately due and payable within five (5) days of notice, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law.

Section 3.02  Failure to Issue Unrestricted Common Stock. As indicated in Article III Section 3.01, a breach by the Company of its obligations under the Registration Rights Agreement shall be deemed an Event of Default, which if not cured within ten (10) days, shall entitle the Holder to accelerate full repayment of all debentures outstanding and accrued interest thereon or, notwithstanding any limitations contained in this Debenture and/or the Securities Purchase Agreement, to convert all debentures outstanding and accrued interest thereon into shares of Common Stock pursuant to Section 1.02 herein. The Company acknowledges that failure to honor a Notice of Conversion shall cause irreparable harm to the Holder.
 
ARTICLE IV.  
 
Section 4.01  Rights and Terms of Conversion. This Debenture, in whole or in part, may be converted at any time following the date of Closing (as defined in the Securities Purchase Agreement), into shares of Common Stock at a price equal to the Conversion Price as described in Section 1.02 above.
 
Section 4.02  Re-issuance of Debenture. When the Holder elects to convert a part of the Debenture, then the Company shall reissue a new Debenture in the same form as this Debenture to reflect the new principal amount.
 
ARTICLE V.  
 
Section 5.01  Anti-dilution. In the event that the Company shall at any time subdivide the outstanding shares of Common Stock, or shall issue a stock dividend on the outstanding Common Stock, the Conversion Price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in the event that the Company shall at any time combine the outstanding shares of Common Stock, the Conversion Price in effect immediately prior to such combination shall be proportionately increased, effective at the close of business on the date of such subdivision, dividend or combination as the case may be.
 
7
 
Section 5.02  Consent of Holder to Sell Capital Stock or Grant Security Interests. So long as any of the principal of or interest on this Debenture remains unpaid and unconverted, the Company shall not, without the prior consent of the majority of the Holder(s), issue or sell (i) any Common Stock or preferred stock of the Company for consideration of less than the Conversion Price on the date of issuance or (ii) issue or sell any warrant, option, right, contract, call, or other security or instrument granting the holder thereof the right to acquire Common Stock or preferred stock of the Company for consideration of less than the Conversion Price on the date of issuance, (iii) enter into any security instrument granting the holder a security interest in any of the assets of the Company, or (iv) file any registration statement on Form S-8. However, the Company may (i) issue options to its employees in an amount equal to 15% of its then-outstanding shares of common stock pursuant to a valid stock option plan providing that such options are not issued at a price that is less than the market price of the common stock on the date of issuance; (ii) grant a security interest in any of its assets in connection with a bank credit facility or factoring arrangement; (iii) issue shares of Common Stock or securities convertible into Common Stock to a strategic partner pursuant to a joint venture or other similar agreement; or (iv) file a registration statement on a Form S-8 for a valid stock option plan.
 
ARTICLE VI.  
 
Section 6.01  Permitted Withholding. The Company shall be entitled to withhold from all payments of principal of this Debenture any amounts required to be withheld under the applicable provisions of the United States income tax laws or other applicable laws at the time of such payments, and Holder shall execute and deliver all required documentation in connection therewith.
 
Section 6.02  Absolute Obligation of the Company. No provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct obligation of the Company.
 
Section 6.03  Transfer. This Debenture has been issued subject to investment representations of the original purchaser hereof and may be transferred or exchanged only in compliance with the 1933 Act, and other applicable state and foreign securities laws. In the event of any proposed transfer of this Debenture, the Company may require, prior to issuance of a new Debenture in the name of such other person, that it receive reasonable transfer documentation including legal opinions that the issuance of the Debenture in such other name does not and will not cause a violation of the 1933 Act or any applicable state or foreign securities laws. Prior to due presentment for transfer of this Debenture, the Company and any agent of the Company may treat the person in whose name this Debenture is duly registered on the Company's Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture be overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.
 
Section 6.04  Investment Purpose. The Holder of the Debenture, by acceptance hereof, agrees that this Debenture is being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Debenture or the shares of Common Stock issuable upon conversion thereof except under circumstances which will not result in a violation of the 1933 Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.
 
8
 
Section 6.05  Limitations. The Holder may not convert this Debenture to the extent such conversion would result in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder) in excess of 4.999% of the then issued and outstanding shares of Common Stock held by such Holder after application of this Section. Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of 4.999% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the principal amount of Debenture are convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a principal amount of Debenture that would result in the issuance of in excess of the permitted amount hereunder, without regard to any other shares that the Holder or its affiliates may beneficially own, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion Date and, at the option of the Holder, either retain any principal amount tendered for conversion in excess of the permitted amount hereunder for future conversions or return such excess principal amount to the Holder. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected by any such waiver.
 
Section 6.06  No Rights as Shareholder until Conversion. Nothing contained in this Debenture shall be construed as conferring upon the Holder the right to vote or to receive dividends or to consent or receive notice as a shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder of the Company, unless and to the extent converted in accordance with the terms hereof.
 
Section 6.07  Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile or by electronic mail either in the text of an email message or attached in a commonly readable format, and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally, by courier (including a recognized overnight delivery service) or by facsimile, or one day after electronically mailed if the sender has received no generated notice that the email message has not been successfully delivered, in each case addressed to a party. The addresses for such communications shall be:
 
If to Sionix:

2082 Michelson Drive, Suite 304
Irvine, CA 92612
Attention: _______________
Facsimile: (949) 752-7998
Email:
 
9
 
with a copy to:

____________________
____________________
____________________
Attention: 
Facsimile:
Email:
 
If to Purchaser:

____________________
____________________
____________________
Attention: 
Facsimile:
Email:

with a copy to:

Gersten Savage LLP
600 Lexington Avenue, 9th Floor
New York, NY 10022
Attention: David E. Danovitch, Esq.
Facsimile: (212) 980-5192
Email: ddanovitch@gerstensavage.com

Each party shall provide notice to the other party of any change in address.

Section 6.08  Governing Law. This Debenture shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the City of New York or the state courts of the State of New York sitting in the City of New York in connection with any dispute arising under this Debenture and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any dispute arising under this Debenture.
 
Section 6.09  Severability. The invalidity of any of the provisions of this Debenture shall not invalidate or otherwise affect any of the other provisions of this Debenture, which shall remain in full force and effect.
 
Section 6.10  Entire Agreement and Amendments. This Debenture represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein. This Debenture may be amended only by an instrument in writing executed by the parties hereto.
 
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Section 6.11  Counterparts. This Debenture may be executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute on instrument.
 
Section 6.12  Lost Documents. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Debenture or any Debenture exchanged for it, and (in the case of loss, theft or destruction) of indemnity satisfactory to it, and upon surrender and cancellation of such Debenture, if mutilated, the Company will make and deliver in lieu of such Debenture a new Debenture of like tenor and unpaid principal amount and dated as of the original date of this Debenture.
 
[Remainder of page intentionally left blank]
 
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IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as executed this Debenture as of the date first written above.
 
    SIONIX:
 
 		  
 		  
    By:
 
Name:
 
Title:

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EXHIBIT A
 
NOTICE OF CONVERSION
 
(To be executed by the Holder in order to Convert the Debenture)
 
TO:
  

The undersigned hereby irrevocably elects to convert $      of the principal amount of the above Debenture into Shares of Common Stock of Sionix Corporation, according to the conditions stated therein, as of the Conversion Date written below.
 
Conversion Date:
  
Applicable Conversion Price:
  
Signature:
  
Name:
  
Address:
  
Amount to be converted:
$          
Amount of Debenture unconverted:
$          
Conversion Price per share:
$          
Number of shares of Common Stock to be issued:
  
Please issue the shares of Common Stock in the following name and to the following address:
  
Issue to:
  
Authorized Signature:
  
Name:
  
Title:
  
Phone Number:
  
Broker DTC Participant Code:
  
Account Number:
  

A-1
 
 EX-10.3 4 v084221_ex10-3.htm Unassociated Document

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (“Agreement”), dated as of June 18, 2007, is made by and between SIONIX CORPORATION, a Nevada corporation (the “Company”), and [investors to be identified by Southridge Investment Group, LLC] (the “Subscriber”).

RECITALS

WHEREAS, upon the terms and subject to the conditions of the Securities Purchase Agreement (the “Purchase Agreement”), as of even date, between the Subscriber and the Company, the Company has agreed to issue to the Subscriber up to _____________ shares (________) of the common stock of the Company, $0.001 par value per share (the “Common Stock”), pursuant to conversion(s) of an 8% subordinated convertible debenture (“Debenture”), issued on even date (the “Conversion Shares”), and ________ shares of Common Stock pursuant to exercise of the Warrant (“Warrant Shares”), issued on even date (together the Conversion Shares and the Warrant Shares hereinafter the “Subscribed Shares”), and

WHEREAS, to induce the Subscriber to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws with respect to the Subscribed Shares.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Subscriber hereby agree as follows:

1.   Definitions.

(a)  As used in this Agreement, the following terms shall have the following meaning:

(i)  “Business Day” means any day that is not a Saturday, Sunday, or legal holiday in the State of New York when commercial banking institutions are required to be closed.

(ii)  “Potential Material Event” means any of the following: (a) possession by the Company of material information not ripe for disclosure in a Registration Statement, which shall be evidenced by determinations in good faith by the Board of Directors of the Company that disclosure of such information in the Registration Statement would be detrimental to the business and affairs of the Company, or (b) any material engagement or activity by the Company which would, in the good faith determination of the Board of Directors of the Company, be adversely affected by disclosure in a Registration Statement at such time, which determination shall be accompanied by a good faith determination by the Board of Directors of the Company that the Registration Statement would be materially misleading absent the inclusion of such information.
 
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(iii)  “Register”, “registered” and “registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a delayed or continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the “SEC”).

(iv)
“Registrable Securities” means the Subscribed Shares.

(v)
“Registration Statement” means a registration statement of the Company under the Securities Act.

(vi)
“Subscription Date” means the date of this Agreement.

(vii)
“Subscriber” has the meaning set forth in the preamble to this Agreement.

(b)  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

2.   Registration.

(a)  Mandatory Registration. The Company shall prepare and file with the SEC, no later than forty-five (45) days after the Subscription Date (“Filing Date”), a Registration Statement on Form SB-2 (“Registration Statement”), or such other appropriate Registration Statement, pursuant to Rule 457(o) of the Securities Act, no less than the amount of Subscribed Shares, and to use its best efforts to cause the Registration Statement relating to the Registrable Securities to become effective ninety (90) days after the Subscription Date (“Effective Date”). Such Registration Statement shall state that, in accordance with the Securities Act, it also covers such indeterminate number of additional shares of Common Stock as may become issuable to prevent dilution resulting from stock splits, or stock dividends.

(b)  Damages. If the Registration Statement covering the Registrable Securities required to be filed by the Company pursuant to Section 2(a) hereof is not filed by the Filing Date or declared effective by the Effective Date, then upon failure of either event the Subscriber shall be entitled to liquidated damages, payable in cash, in the sum of one and one-half percent (1.5%) of the Purchase Price (as defined in the Purchase Agreement) of the Debenture (a) for each thirty (30) day period (or pro-rata portion thereof) after the Filing Date that transpires until the date that the Company files the Registration Statement, and (b) for each thirty (30) day period (or pro-rata portion thereof) after the Effective Date that transpires until such date as the Registration Statement is declared effective; provided, however, that the aggregate liquidated damages payable in accordance with this Section shall not exceed 15% of the Purchase Price.
 
The Company acknowledges that its failure to have the Registration Statement filed by the Filing Date or declared effective by the Effective Date (for any reason other than the requirement by the SEC of modifications to the structure of the transactions contemplated hereby that are unacceptable to the Company or the Subscriber) shall cause the Subscriber to suffer damages in an amount that shall be difficult to ascertain. Accordingly, the parties agree that it is appropriate to include in this Agreement a provision for liquidated damages. The parties acknowledge and agree that the liquidated damages provision set forth in this section represents the parties’ good faith effort to quantify such damages and, as such, agree that the form and amount of such liquidated damages are reasonable and will not constitute a penalty. The payment of liquidated damages shall not relieve the Company from its obligations to register the Common Stock and deliver the Common Stock pursuant to the terms of this Agreement, the Purchase Agreement and the Subscribed Shares.
 
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3.  Obligation of the Company.  In connection with the registration of the Registrable Securities, the Company shall do each of the following:

(a)  Prepare promptly, and file with the SEC within forty-five (45) days of the Subscription Date, a Registration Statement with respect to not less than the number of Registrable Securities provided in Section 2(a) above, and, thereafter, use all diligent efforts to cause the Registration Statement relating to the Registrable Securities to become effective ninety (90) days after the Subscription Date, and keep the Registration Statement effective at all times until the earliest of (i) the date that is one year after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Subscriber may sell all Registrable Securities under Rule 144 without volume limitations, or (iii) the date the Subscriber no longer owns any of the Registrable Securities (collectively, the “Registration Period”), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(b)  Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until the expiration of the Registration Period;

(c)  Permit a single firm of counsel designated by Subscriber to review the Registration Statement and all amendments and supplements thereto a reasonable period of time (but not less than three (3) Business Days) prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects;

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(d)   Notify Subscriber and Subscriber’s legal counsel identified to the Company (“Subscriber’s Counsel”) (and, in the case of (i)(A) below, not less than one (1) Business Day prior to such filing) and (if requested by any such person) confirm such notice in writing no later than one (1) Business Day following the day (i): (A) when a prospectus or any prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed; (B) whenever the SEC notifies the Company whether there will be a “review” of such Registration Statement; (C) whenever the Company receives (or a representative of the Company receives on its behalf) any oral or written comments from the SEC respect of a Registration Statement (copies or, in the case of oral comments, written or oral summaries of such comments shall be promptly furnished by the Company to Subscriber’s Counsel); and (D) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or the prospectus or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any proceedings for that purpose; (iv) if at any time any of the representations or warranties of the Company contained in any agreement (including the Purchase Agreement) contemplated hereby ceases to be true and correct in all material respects; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and (vi) of the occurrence of any event that to the knowledge of the Company makes any statement made in the Registration Statement or the prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, the prospectus or other documents so that, in the case of the Registration Statement or the prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In addition, the Company shall furnish Subscriber’s Counsel with copies of all intended written responses to the comments contemplated in clause (C) of this Section not later than one (1) Business Day in advance of the filing of such responses with the SEC so that Subscriber shall have the opportunity to comment thereon.

(e)  Furnish to Subscriber, (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and the prospectus, and each amendment or supplement thereto, and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents, as the Subscriber may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Subscriber;
 
(f)  Use all diligent efforts to (i) register and/or qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Subscriber may reasonably request and in which significant volumes of shares of Common Stock are traded, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all times during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualification in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions: provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any such jurisdiction, (D) provide any undertakings that cause more than nominal expense or burden to the Company or (E) make any change in its charter or by-laws or any then existing contracts, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders;
 
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(g)  As promptly as practicable after becoming aware of such event, notify the Subscriber of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (“Registration Default”), and uses all diligent efforts to promptly prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and any other necessary steps to cure the Registration Default, and deliver a number of copies of such supplement or amendment to the Subscriber as the Subscriber may reasonably request. Failure to cure the Registration Default within ten (10) Business Days shall result in the Company including liquidated damages of 2% of the cost of all Common Stock then held by the Subscriber for each 15 day period or portion thereof, beginning on the date of suspension.
 
(h)  As promptly as practicable after becoming aware of such event, notify the Subscriber (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of any notice of effectiveness or any stop order or other suspension of the effectiveness of the Registration Statement at the earliest possible time;
 
(i)  Notwithstanding the foregoing, if at any time or from time to time after the date of effectiveness of the Registration Statement, the Company notifies Subscriber in writing of the existence of a Potential Material Event (“Blackout Notice”), Subscriber shall not offer or sell any Registrable Securities, or engage in any other transaction involving or relating to the Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until Subscriber receives written notice from the Company that such Potential Material Event either has been disclosed to the public or no longer constitutes a Potential Material Event; provided, however, that (a) the Company may not so suspend the right to such holders of Registrable Securities for more than two ten (10) day periods in the aggregate during any 12-month period (“Blackout Period”) with at least a ten (10) Business Day interval between such periods, during the periods the Registration Statement is required to be in effect, or (b) that if such Blackout Period exceeds the permitted ten (10) day periods, the Company shall pay damages of  2% of the cost of all Common Stock then held by the Subscriber for each fifteen (15) day period or portion thereof, beginning on the date of the suspension.

(j)  Use its commercially reasonable efforts to secure and maintain National Association of Securities Dealers, Inc. (“NASD”) authorization and quotation for such Registrable Securities on the over-the-counter bulletin board and, without limiting the generality of the foregoing, to arrange for at least two market makers to register with the NASD as such with respect to such Registrable Securities, and ultimately to cause all the Registrable Securities covered by the Registration Statement to be listed on a national securities exchange (including the NASDAQ Capital Market) and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange; provided, however, that the Subscriber acknowledges that the Company does not currently meet the requirements for listing on a national securities exchange and that nothing in this section shall be construed to require the Company to pursue such qualification until such time as the Company satisfies such requirements for a period of not less than forty-five (45) days;
 
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(k)  Provide a transfer agent for the Registrable Securities not later than the Subscription Date of the Registration Statement;

(l)  Cooperate with the Subscriber to facilitate the timely preparation and delivery of certificates for the Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registrable Securities to be in such denominations or amounts as the case may be, as the Subscriber may reasonably request and registration in such names as the Subscriber may request; and, within five (5) Business Days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Subscriber) an appropriate instruction and opinion of such counsel, if so required by the Company’s transfer agent; and

(m)  Take all other reasonable actions necessary to expedite and facilitate distribution to the Subscriber of the Registrable Securities pursuant to the Registration Statement.

4.  Obligations of the Subscriber. In connection with the registration of the Registrable Securities, the Subscriber shall have the following obligations;
 
(a)  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of the Subscriber that the Subscriber shall timely furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall timely execute such documents in connection with such registration as the Company may reasonably request.
 
(b)  The Subscriber by such Subscriber’s acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder; and

(c)  The Subscriber agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g), 3(h) or 3(i) above, the Subscriber will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Subscriber receives the copies of the supplemented or amended prospectus contemplated by Section 3(g), 3(h) or 3(i) and, if so directed by the Company, the Subscriber shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Subscriber’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
 
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5.  Expenses of Registration. (a) All reasonable expenses incurred in connection with Registrations, filings or qualifications pursuant to Section 3, including, without limitation, all Registration, listing, and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company. A fee for a single counsel for Subscriber for the initial Registration Statement and for each additional Registration Statement covering the Registrable Securities shall be borne by the Company.

(b)  Except as otherwise provided for in Schedule 5(b) attached hereto, the Company nor any of its subsidiaries has, as of the date hereof, and the Company shall not on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to Subscriber in this Agreement or otherwise conflicts with the provisions hereof. Except as otherwise provided for in Schedule 5(b), the Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any person. Except as otherwise provided for in this Section 5, and without limiting the generality of the foregoing, without the written consent of Subscriber, the Company shall not grant to any person the right to request the Company to Register any securities of the Company under the Securities Act unless the rights so granted are subject in all respects to the prior rights in full of Subscriber set forth herein, and are not otherwise in conflict or inconsistent with the provisions of this Agreement and the other Transaction Documents.
 
6.   Indemnification. After Registrable Securities are included in a Registration Statement under this Agreement:
 
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(a)  To the extent permitted by law, the Company will indemnify and hold harmless, each Subscriber, the directors, if any, of such Subscriber, the officers, if any, of such Subscriber, each person, if any, who controls the Subscriber within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each, an “Indemnified Person”), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, “Claims”) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the Subscription Date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being collectively referred to as “Violations”). The Company shall reimburse the Subscriber, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a) shall not (i) apply to any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (iii) be available to the extent such Claim is based on a failure of the Subscriber to deliver or cause to be delivered the prospectus made available by the Company; or (iv) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. The Subscriber will indemnify the Company, its officers, directors and agents (including legal counsel) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of such Subscriber, expressly for use in connection with the preparation of the Registration Statement, subject to such limitations and conditions set forth in the previous sentence. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person or Indemnified Party.
 
(b)  Promptly after receipt by an Indemnified Person under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person, as the case may be; provided, however, that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding. In such event, the Company shall pay for only one separate legal counsel for the Subscriber selected by the Subscriber. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
 
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7.   Contribution. To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation; and (c) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.
 
8.   Reports under Exchange Act. With a view to making available to the Subscriber the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Subscriber to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to use its reasonable best efforts to:

(a)  make and keep public information available, as those terms are understood and defined in Rule 144;

(b)  file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act;

(c)  furnish to the Subscriber so long as the Subscriber owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company solely if unavailable by EDGAR, and (iii) such other information as may be reasonably requested to permit the Subscribers to sell such securities pursuant to Rule 144 without registration; and

(d)   at the request of any Subscriber of Registrable Securities, give its Transfer Agent irrevocable instructions (supported by an opinion of Company counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from such Subscriber of:

(i) a certificate (a “Rule 144 Certificate”) certifying (A) that such Subscriber has held the shares of Registrable Securities which the Subscriber proposes to sell (the “Securities Being Sold”) for a period of not less than (1) year and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and

(ii) an opinion of counsel acceptable to the Company (for which purposes it is agreed that the initial Subscriber’s Counsel shall be deemed acceptable if such opinion is not given by Company Counsel) that, based on the Rule 144 Certificate, Securities Being Sold may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement.

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The Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s books and records (except to the extent any such legend or restriction results from facts other than the identity of the Subscriber, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Subscriber). If the Transfer Agent requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.

9.   Miscellaneous.

(a)  Registered Owners. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

(b)  Rights Cumulative; Waivers. The rights of each of the parties under this Agreement are cumulative. The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right. Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right. No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.

(c)  Benefit; Successors Bound. This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights, and benefits hereof, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their heirs, executors, administrators, representatives, successors, and permitted assigns.

(d)  Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof. There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement and in the other documentation relating to the transactions contemplated by this Agreement. Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement.

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(e)  Assignment. The rights to have the Company register Registrable Securities pursuant to this Agreement may be assigned by the Subscribers to any transferee, only if: (a) the assignment relates to not less than __________dollars ($________) of Registrable Securities and the Transferee is an Accredited Subscriber under Regulation D not in competition with the Company; (b) the Company receives a legal opinion in form and substance satisfactory to the Company that the proposed transfer complies with federal and state securities laws and does not adversely effect the validity of the transactions executed (or to be executed) under this Agreement and the Purchase Agreement under federal and state securities laws; (c) the assignment requires that the Transferee be bound by all of the provisions contained in this Agreement, and Subscriber, the Company and the transferee or assignee (the “Transferee”) enter into a written agreement, which shall be enforceable by the Company against the Transferee and by the Transferee against the Company, to assign such rights; and (d) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws. Prior to the assignment the company shall have the right to perform its own due diligence regarding the assignee and have the right to approve the assignment, provided that such approval shall not be unreasonably withheld. In the event of any delay in filing or effectiveness of the Registration Statement as a result of such assignment, the Company shall not be liable for any damages arising from such delay, or the payments set forth in Section 2(b) hereof.

(f)  Amendment. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Subscriber. Any amendment or waiver effected in accordance with this Section 9(f) shall be binding upon the Company and any subsequent Transferees.

(g)  Severability. Each part of this Agreement is intended to be severable. In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect.

(h)  Notices. Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered (by hand, by courier, by telephone line facsimile transmission, receipt confirmed, by electronic mail either in the text of an email message or attached in a commonly readable format and the sender has received no generated notice that the email message has not been successfully delivered, or other means) or sent by certified mail, return receipt requested, properly addressed and with proper postage pre-paid (i) if to the Company, at its executive office and (ii) if to the Subscriber, at the address set forth under its name in the Purchase Agreement, with a copy to its designated attorney, or at such other address as each such party furnishes by notice given in accordance with this Section 9(h), and shall be effective, when personally delivered, upon receipt and, when so sent by certified mail, five (5) Business Days after deposit with the United States Postal Service.

(i)  Governing Law. This Agreement shall be governed by the interpreted in accordance with the laws of the State of New York without reference to its conflicts of laws rules or principles. Each of the parties consents to the exclusive jurisdiction of the federal courts of the State of New York in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with this Agreement.

11

(j)  Consents. The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of that party.

(k)  Further Assurances. In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby.

(l)  Section Headings. The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(m)  Construction. Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender.

(n)  Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission or electronic mail transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. A facsimile or electronic mail transmission of this signed Agreement shall be legal and binding on all parties hereto.
 
[Remainder of page intentionally left blank.]

12

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.
 
    COMPANY:
     
    SIONIX CORPORATION
   
    By:
 
Name:
 
Title:
 
    SUBSCRIBER:
 
 		  
 		  
[_________________]
   
    By:
 
Name:
 
Title:
 
13
 
 EX-10.4 5 v084221_ex10-4.htm Unassociated Document
THE WARRANT EVIDENCED HEREBY, AND THE SECURITIES ISSUABLE HEREUNDER, HAVE BEEN AND SHALL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE STATE SECURITY LAWS. THE WARRANT AND SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND SHALL NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE PROPOSED DISPOSITION IS THE SUBJECT OF A CURRENTLY EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND SUCH STATE SECURITIES LAWS IN CONNECTION WITH SUCH DISPOSITION.
 
SIONIX CORPORATION
 
COMMON STOCK PURCHASE WARRANT
 
Original Issue Date: JUNE 18 , 2007
Void After: JUNE 18, 2012
 
This Warrant is Issued to
 
____________________________________
 
(hereinafter called the “Holder,” which term shall include the Holder’s legal representatives, heirs, successors and assigns) by Sionix Corporation, a Nevada corporation (hereinafter referred to as the “Company”). This Warrant may be transferred by the Holder only in accordance with the provisions of Section 12.
 
1.  Exercise of Warrant. For value received and subject to the terms and conditions hereinafter set forth, the Holder is entitled, upon surrender of this Warrant at any time on or after June 18, 2007 and on or prior to June 18, 2012 (the “Exercise Date”) (with the subscription form annexed hereto (the “Subscription Form”) duly executed) at the office of the Company at 2082 Michelson Drive, Suite 304, Irvine, CA 92612, or such other office in the United States of which the Company shall notify the Holder hereof in writing, to purchase from the Company, at the purchase price hereinafter specified (as adjusted from time to time, the “Exercise Price”), ________ [insert number for 50% warrant coverage] shares (the “Warrant Shares”) (as adjusted from time to time) of the Common Stock, $0.001 par value per share, of the Company (the “Common Stock”). The initial Exercise Price shall be $0.50 per share.
 
2.  Issuance of Stock Certificates. As promptly as practicable, but not later than three (3) Business Days, after surrender of this Warrant and receipt of payment of the Exercise Price, the Company shall issue and deliver to the Holder a certificate or certificates for the shares purchased hereunder, in certificates of such denominations and in such names as the Holder may specify. As used herein, “Business Day” means any day that is not a Saturday, Sunday, or legal holiday in the State of New York when commercial banking institutions are required to be closed.
 
 
3.  Payment of Exercise Price. Payment of the Exercise Price shall be made by check made payable to the order of the Company or wire transfer of funds to a bank account designated by the Company.
 
4.  Cashless Exercise. Notwithstanding anything contained herein to the contrary, provided that a registration statement pursuant to the Securities Act of 1933, as amended (the “Securities Act”) covering the resale of the Warrant Shares that are the subject of the Subscription Form by the Holder (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder may notify the Company in a Subscription Form of its election to utilize cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows (a “Cashless Exercise”):
 
X = Y [(A-B)/A]
 
where:
 
X = the number of Warrant Shares to be issued to the Holder.
 
Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
 
A = the average of the closing prices for the five trading days immediately prior to (but not including) the Exercise Date.
 
B = the Exercise Price.
 
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued.
 
5.  Limitation on Exercise. Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
 
6.  Adjustment for Dividends, Distributions, Subdivisions, Combinations, Mergers, Consolidations or Sale of Assets.
 
- 2 -
 
6.1  Manner of Adjustment.
 
(a)  Stock Dividends, Distributions or Subdivisions. In the event the Company shall issue shares of Common Stock in a stock dividend, stock distribution or subdivision, the Exercise Price in effect immediately before such stock dividend, stock distribution or subdivision shall, concurrently with the effectiveness of such stock dividend, stock distribution or subdivision, be proportionately decreased and the number of shares of Common Stock purchasable by exercise of this Warrant shall be proportionately increased.
 
(b)  Combinations or Consolidations. In the event the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the Exercise Price in effect immediately prior to such combination or consolidation shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased and the number of shares of Common Stock purchasable by exercise of this Warrant shall be proportionately decreased.
 
(c)  Adjustment for Reclassification, Exchange or Substitution. In the event that the class of securities issuable upon the exercise of this Warrant shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than any event addressed by Sections 6.1(a), 6.1(b) or 6.1(d)), then and in each such event the Holder shall have the right thereafter to exercise this Warrant for the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of the class of securities into which such Warrant might have been exercisable for immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein.
 
(d)  Adjustment for Merger, Consolidation or Sale of Assets. In the event that the Company shall merge or consolidate with or into another entity or sell all or substantially all of its assets, this Warrant shall thereafter be exercisable for the kind and amount of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Company deliverable upon exercise of this Warrant would have been entitled upon such consolidation, merger or sale; and, in such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions set forth in this Section 6 with respect to the rights and interest thereafter of the Holder of this Warrant, to the end that the provisions set forth in this Section 6 shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the exercise of this Warrant.
 
6.2  Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 6, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.
 
- 3 -
 
6.3  Closing of Books. The Company shall at no time close its transfer books against the transfer of any shares of Common Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely and proper issuance of such shares.
 
7.  Covenants of the Company. During the period within which the rights represented by this Warrant may be exercised, the Company shall at all times have authorized and reserved for the purpose of issue upon exercise of the rights evidenced hereby, a sufficient number of shares of the class of securities issuable upon exercise of this Warrant to provide for the exercise of such rights. All securities which may be issued upon the exercise of the rights represented by this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. Upon surrender for exercise, this Warrant shall be canceled and shall not be reissued; provided, however, that upon the partial exercise hereof a substitute Warrant of like tenor and date representing the rights to subscribe for and purchase any such unexercised portion hereof shall be issued.
 
8.  No Rights as Shareholder Until Exercise. This Warrant shall not entitle the Holder to any voting rights or any other rights as a stockholder of the Company but upon presentation of this Warrant with the Subscription Form duly executed and the tender of payment of the Exercise Price at the office of the Company pursuant to the provisions of this Warrant, the Holder shall forthwith be deemed a stockholder of the Company in respect of the securities for which the Holder has so subscribed and paid.
 
9.  No Change Necessary. The form of this Warrant need not be changed because of any adjustment in the Exercise Price or in the number of shares issuable upon its exercise. A Warrant issued after any adjustment or any partial exercise or upon replacement may continue to express the same Exercise Price and the same number of shares (appropriately reduced in the case of partial exercise) as are stated on this Warrant as initially issued, and that Exercise Price and that number of shares shall be considered to have been so changed as of the close of business on the date of adjustment.
 
10.  Addresses for Notices. All notices, requests, consents and other communications hereunder shall be in writing, either delivered in hand or mailed by registered or certified mail, return receipt requested, or sent by facsimile, or sent by electronic mail either in the text of an email message or attached in a commonly readable format, and shall be deemed to have been duly made when delivered:
 
(a)  If to the Holder, to the Holder’s address as shown on the books of the Company; or
 
(b)  If to the Company, to the address set forth on the first page of this Warrant.
 
- 4 -
 
11.  Substitution. In the case this Warrant shall be mutilated, lost, stolen or destroyed, the Company shall issue a new Warrant of like tenor and denomination and deliver the same (a) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (b) in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft, or destruction of such Warrant (including, without limitation, a reasonably detailed affidavit with respect to the circumstances of any loss, theft or destruction), and of indemnity (or, in the case of the initial Holder or any other institutional holder, an indemnity agreement) satisfactory to the Company.
 
12.  Transfer Restrictions. This Warrant shall not be transferable by the Holder and shall be exercisable only by the Holder. Without the prior written consent of the Company, the Warrant shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Warrant or of any rights granted hereunder contrary to the provisions of this Section 12, or the levy of any attachment or similar process upon the Warrant or such rights, shall be null and void.
 
13.  Taxes. The Company makes no representation about tax treatment to the Holder with respect to receipt or exercise of the Warrant or acquiring, holding or disposing of the Common Stock, and the Holder represents that the Holder has had the opportunity to discuss such treatment with the Holder’s tax advisers.
 
14.  Remedies. Each party stipulates that the remedies at law in the event of any default or threatened default by the other party in the performance or compliance with any of the terms of this Warrant are and shall not be adequate, and that such terms may be specifically enforced by a decree for that specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
 
15.  Governing Law. This Warrant shall be construed and enforced in accordance with, and governed by, the laws of the State of New York without regard to its principles of conflicts of laws.
 
16.  Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the Holder and the Company.
 
[Remainder of page intentionally left blank.]
 
- 5 -
 
Common Stock Purchase Warrant
 
* * *
 
IN WITNESS WHEREOF, the parties have caused this Warrant to be executed this 18th day of June, 2007.
 
      SIONIX CORPORATION
       
      By:
   
Name:
     
Title:
     
 
 
SUBSCRIPTION FORM
 
(To be Executed by the Holder
in Order to Exercise the Warrant)
 
Date: ____________________

To:
Sionix Corporation
 
2082 Michelson Drive, Suite 304
 
Irvine, CA 92612

The undersigned, pursuant to the provisions set forth in the attached Warrant hereby irrevocably elects to purchase _____ shares of the Common Stock (the “Common Stock”) covered by such Warrant and herewith makes payment of $_________, representing the [full/partial] purchase price for such shares at the price per share provided for in such Warrant.
 
The undersigned hereby agrees to take such other action and execute and deliver such other documents as Sionix Corporation may require, in connection with the issue of shares of Common Stock to the undersigned as aforesaid, in order to comply with the provisions of such Warrant.
 
The undersigned is aware that the Common Stock has not been registered under the Securities Act of 1933, as amended (the “Act”) or any state securities laws. The undersigned understands that the reliance by the Company on exemptions under the Act is predicated in part upon the truth and accuracy of the statements of the undersigned in this Subscription Form.
 
The undersigned represents and warrants that (1) it has been furnished with all information which it deems necessary to evaluate the merits and risks of the purchase of the Common Stock; (2) it has had the opportunity to ask questions concerning the Common Stock and the Company and all questions posed have been answered to its satisfaction; (3) it has been given the opportunity to obtain any additional information it deems necessary to verify the accuracy of any information obtained concerning the Common Stock and the Company; and (4) it has such knowledge and experience in financial and business matters that it is able to evaluate the merits and risks of purchasing the Common Stock and to make an informed investment decision relating thereto.
 
The undersigned hereby represents and warrants that it is purchasing the Common Stock for its own account and not with a view to the sale or distribution of all or any part of the Common Stock.
 
The undersigned understands that because the Common Stock has not been registered under the Act, it must continue to bear the economic risk of the investment for an indefinite time and the Common Stock cannot be sold unless the Common Stock is subsequently registered under applicable federal and state securities laws or an exemption from such registration is available.
 
 
The undersigned agrees that it shall in no event sell or distribute or otherwise dispose of all or any part of the Common Stock unless (1) there is an effective registration statement under the Act and applicable state securities laws covering any such transaction involving the Common Stock or (2) the Company receives an opinion of legal counsel to the undersigned (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.
 
The undersigned consents to the placing of a legend on its certificate for the Common Stock stating that the Common Stock has not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Common Stock until the Common Stock may be legally resold or distributed without restriction.
 
The undersigned has considered the federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Common Stock.
 
       
   
Signature
     
 
 
      Print name:  
     
     
Date:
     

- 2 -
 
 EX-31.1 6 v084221_ex31-1.htm Unassociated Document
EXHIBIT 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
 
I, James J. Houtz, President and Chief Executive Officer of Sionix
Corporation, Inc., certify that:

    1. I have reviewed this quarterly report on Form 10-QSB of Sionix Corporation for the period ended June 30, 2007;

    2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

    3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

    4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

     (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

    5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 
     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
     
 
 		  
 		  
 
Date: August 14, 2007 By:  
/s/ James J. Houtz
 
James J. Houtz
 
President
EX-31.2 7 v084221_ex31-2.htm Unassociated Document
 
EXHIBIT 31.2

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert E. McCray, Chief Financial Officer of Sionix Corporation,Inc., certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Sionix Corporation for the year period ended June 30, 2007;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
 
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
     
 
 		  
 		  
 
Date: August 14, 2007
 By:  
/s/ Robert E. McCray
 
Robert E. McCray
 
Chief Financial Officer
EX-32.1 8 v084221_ex32-1.htm Unassociated Document
 
EXHIBIT 32.1

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
OF QUARTERLY REPORT ON FORM 10 - QSB
OF SIONIX CORPORATION
FOR THE PERIOD ENDED JUNE 30, 2007

The undersigned is the Chief Executive Officer of Sionix Corporation (the "Company"). This certification is made pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. This certification accompanies the Quarterly Report on Form 10-QSB of the Company for the period ended June 30, 2007 (the "Report").

I, James J. Houtz, certify that:
 
(i)    the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(ii)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
This certification is executed as of August 14, 2007
 
     
 
 		  
 		  
 
    /s/ James J. Houtz
 
James J. Houtz, Chief Executive Officer
 
 
 
 
 
 EX-32.2 9 v084221_ex32-2.htm Unassociated Document
 
EXHIBIT 32.2
 
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
OF QUARTERLY REPORT ON FORM 10 - QSB
OF SIONIX CORPORATION
FOR THE PERIOD ENDED JUNE 30, 2007

The undersigned is the Chief Financial Officer of Sionix Corporation (the "Company"). This certification is made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This certification accompanies the Quarterly Report on Form 10-QSB of the Company for the period ended June 30, 2007 (the "Report").

I, Robert E. McCray, certify that:

(i)    the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
 
(ii)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
This certification is executed as of August 14, 2007
 
     
 
 		  
 		  
 
    /s/ Robert E. McCray
 
Robert E. McCray, Chief Financial Officer
 
 
 
 
 
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