UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, ~~2010~~2011.

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~___ to .~~

___ to

Commission file number: 000-52803

SONNEN CORPORATION

(Exact name of registrant as specified in its charter)

Nevada ~~(State or other jurisdiction of incorporation or organization) 98-0514037 (I.R.S. Employer Identification No.)~~

~~2829 Bird Avenue, Suite 12, Miami, Florida 33133~~98-0514037

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

2665 S. Bayshore Drive, Suite 450, Miami, Florida 33133

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (305) 529-4888

Securities registered under Section 12(b) of the Act: none.

Securities registered under Section 12(g) of the Act: common stock (title of class), $0.0001 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 Exchange Act of ~~Regulation S-T (§ 232.405 of this chapter)~~ 1934 during the preceding 12 months (or for such shorter period that the registrant was required to ~~submit and post~~ file such ~~files).~~

reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)

during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No þ

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

~~Indicate by check mark whether the registrant is a large accelerated filer~~contained herein, ~~an accelerated filer~~ and will not be contained, ~~a non-accelerated filer, or a smaller reporting company. See~~ to the ~~definitions~~ best of ~~“large accelerated filer~~ registrant’s knowledge,~~” “accelerated filer” and “smaller reporting company”~~ in ~~Rule 12b-2 of the Exchange Act. Smaller reporting company þ~~ definitive proxy or information statements

~~Indicate~~incorporated by ~~check~~reference ~~mark~~in ~~whether~~Part ~~the~~III ~~registrant~~of isthis aForm ~~shell~~10-K ~~company~~or ~~(as~~any ~~defined~~amendment into ~~Rule~~this ~~12b-2~~Form ~~of the Act)~~10-K. ~~Yes~~ o ~~No þ~~

~~The~~Indicate ~~aggregate~~by ~~market~~check ~~value~~mark whether of the registrant’s ~~common~~is ~~stock,~~a ~~$0.0001~~large accelerated ~~par~~filer, ~~value~~an ~~(the only class of voting stock)~~accelerated filer, ~~held~~a by non-~~affiliates (26~~accelerated filer,~~893,000~~ ~~shares)~~or ~~was $5,378,600 based on the average of the bid and ask price ($0.20) for the common stock on October 11, 2010.~~a smaller

~~At October 12, 2010, the number of shares outstanding of the registrant’s common stock, $0~~reporting company.~~0001 par value (~~ See the ~~only class~~ definitions of ~~voting stock)~~ “large accelerated filer, ~~was 67,893,000.~~” “accelerated filer” and “smaller reporting company” in Rule

12b-2 of the Exchange Act. Smaller reporting company þ

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

The aggregate market value of the registrant’s common stock, $0.0001 par value (the only class of voting stock), held by non-

affiliates (26,893,000 shares) was $1,075,720 based on the average of the bid and ask price ($0.04) for the common stock on

March 19, 2013.

At March 19, 2013, the number of shares outstanding of the registrant’s common stock, $0.0001 par value (the only class of

voting stock), was 67,893,000.

TABLE OF CONTENTS

PART I

Item1.	Business	3
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties	11
Item 3.	Legal Proceedings	12
Item 4.	(Removed and Reserved)	12

Item1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4.

(Removed and Reserved)

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	12
Item 6.	Selected Financial Data	14
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	19
Item 8.	Financial Statements and Supplementary Data	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
Item 9A.	Controls and Procedures	20
Item 9B.	Other Information	21

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of

Equity Securities

Item 6.

Selected Financial Data

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information

PART III

Item 10.	Directors, Executive Officers, and Corporate Governance	22
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	27
Item 13.	Certain Relationships and Related Transactions, and Director Independence	28
Item 14.	Principal Accountant Fees and Services	29

Item 10.

Directors, Executive Officers, and Corporate Governance

Item 11.

Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Item 14.

Principal Accountant Fees and Services

PART IV

Item 15.	Exhibits and Financial Statement Schedules	29
Signatures		30

Item 15.

Exhibits, Financial Statement Schedules

Signatures

PART I

ITEM 1. ~~BUSINESS~~

As used herein the terms “Sonnen,” “we,” “our,” and “us” refer to Sonnen Corporation, formerly known as Simple Tech, Inc., and its subsidiary, Sonnen One, Inc., unless context indicates otherwise.BUSINESS

~~Corporate~~As ~~History~~used herein the terms “Sonnen,” “we,” “our,” and “us” refer to Sonnen Corporation, and its

subsidiary, Sonnen ~~was incorporated in the State of Nevada on November 16~~One, ~~2006~~Inc., Weunless ~~are~~context aindicates ~~development stage company that has not generated revenue since inception~~otherwise.

~~Our~~Corporate initial operations focused on the provision of a website for basic computer maintenance and troubleshooting assistance. Our business plan was to develop a bridge that would allow customers to contact computer technicians directly for assistance with basic computer needs. We were unable to realize our objectives and discontinued these activities prior to the year ended June 30, 2009. Subsequently, we initiated a search to identify other businesses for development, merger or acquisition. History

~~On July 27, 2009,~~ Sonnen ~~entered~~was ~~into~~incorporated ~~a licensing agreement with PT Group, Limited (“PT Group”). Pursuant to the agreement,~~ in ~~exchange for shares of our common stock and meeting certain financial obligations, we acquired a license for~~ the ~~development~~State ~~and marketing~~ of ~~proprietary~~Nevada ~~technology related to improving catalysts for the utilization in fuel-cells utilizing a unique catalytic process. PT Group notified us~~ on ~~February~~November 616, 2010, of purported breaches of the license agreement including a breach of confidentiality, insufficient funding for research and development activities, and failure to provide direct access to our patent attorneys2006. ~~Since~~We ~~receiving~~are ~~notification of breach, Sonnen has learned that PT Group is not the rightful owner of the licensed technology and had no right to grant us~~ a license to develop or market the intended products. Accordingly, on March 8, 2010, Sonnen filed a civil complaint against PT Group and Paul Leonard, one of its principles, in connection with the licensing agreement, that sought money damages, the return of shares, injunctive relief and attorney’s fees for acts of fraud, misrepresentation of prior research and development ~~efforts, and failure to provide sufficient technical information on which to prepare patents to secure the technology.~~ stage

~~Since~~company ~~we do not believe~~ that ~~PT Group is the rightful owner of the proprietary technology purportedly licensed to us, Sonnen~~ has ~~recorded~~not angenerated ~~impairment~~revenue ofsince ~~its investment in the licensing agreement and has suspended efforts to develop fuel cell technology pending the outcome of Sonnen’s civil complaint~~inception.

~~While~~Our ~~further~~initial ~~development~~operations ~~efforts~~focused ~~related~~on to the ~~technology~~provision ~~purportedly licensed to us from PT Group is unlikely, Sonnen’s plan~~ of ~~operation~~a ~~for~~website ~~the coming year is to resume research and development into improving catalysts~~ for ~~the~~basic ~~utilization~~computer ofmaintenance ~~fuel-cells~~ and ~~related catalysis fields such as emission abatement and ceramic technologies.~~

~~Our~~troubleshooting ~~office is located at 2829 Bird Avenue, Suite 12, Miami, Florida, 33133, and our telephone number is (305) 529-4888~~assistance. Our ~~registered~~business ~~agent~~plan iswas ~~Eastbiz.com,~~to ~~Inc.,~~develop ~~located~~a ~~at 5348~~bridge ~~Vegas~~that ~~Drive, Las~~would ~~Vegas,~~allow ~~Nevada, 89108.~~customers to

~~Sonnen~~contact iscomputer ~~listed~~technicians ondirectly ~~the~~for ~~Over~~assistance ~~the~~with ~~Counter~~basic ~~Bulletin~~computer ~~Board~~needs. ~~under~~We ~~the~~were ~~symbol~~unable ~~“SONP.”~~to realize

3our objectives and discontinued these activities prior to the year ended June 30, 2009. Subsequently, we

~~Sonnen~~initiated a search to identify other businesses for development, merger or acquisition.

~~Sonnen’s~~On ~~plan~~July of operation over the next twelve months is to prosecute its civil complaint against PT Group and certain of the principals thereof and to consider alternative technologies for merger or acquisition that might create value for its shareholders. We intend to focus our efforts on identifying projects that might improve catalysts for the efficient utilization of fuel-cells and related catalysis fields such as emission abatement and ceramic technologies. Towards this end27, management is in the process of evaluating several different technology-based research projects that might fit with Sonnen’s defined mission to wean the global economy off hydrocarbon-based energy sources. Nonetheless2009, ~~as of the date of this report~~ Sonnen ~~has not~~ entered into ~~any~~a licensing agreement orwith ~~commitment~~PT toGroup, ~~expand~~Limited ~~its business operations beyond those that remain dedicated to finding some resolution of its dispute with~~ (“PT Group.”) for

~~Fuel~~the ~~Cell~~development ~~Technologies~~and marketing of proprietary technology related to improving catalysts for use in fuel-

~~Sonnen’s intended business was to develop technology licensed from PT Group for initial application to advances in fuel~~ cells ~~that~~utilizing ~~would produce high power efficiencies at~~ a ~~cost~~unique ~~lower~~catalytic ~~than~~process ~~conventional~~in ~~fuel~~exchange ~~cells.~~for ~~Fuel~~shares ~~cells~~of ~~convert~~our ~~fuel~~common ~~into~~stock ~~electricity~~ and ~~heat~~meeting without combustion, or noise, more efficiently than the internal combustion engine, using a variety of hydrocarbon fuel sources (gasoline, natural gas or diesel) as well as hydrogen. The licensed technology was thought to have the potential to significantly expand the operational parameters of fuel cells in general. certain

~~Most~~financial ~~fuel cells use expensive rare earth or noble metals in their construction~~obligations. ~~These~~Development ~~materials~~activities ~~activate~~began ~~well~~almost ~~with~~immediately ~~pure~~financed ~~hydrogen,~~by ~~but~~Sonnen ~~become corrupted in the presence of catalyst pollutants common~~ to hydrocarbon fuels. Expensive and bulky fuel reformers, scrubbers and complex pressurized systems, which greatly increase the footprint and capital costs of a fuel cell system, must be employed before fuel cells can utilize existing fossil fuel streams. The extra size, additional equipment and bulk make most fuel cells too large and too expensive for transport, small stationary power and other applications. meet

The mass commercialization of existing fuel cells also relies on the development and implementation of a hydrogen delivery infrastructure since the storage, compression, and safe delivery of hydrogen is a primary inhibitor to commercializationobligations. However, ~~the~~on ~~cost~~February ~~associated~~6, ~~with developing and building a new infrastructure to address this problem is thought of as prohibitive. Furthermore~~2010, ~~all~~PT ~~current~~Group ~~fuel~~notified ~~cell~~Sonnen ~~technologies suffer from significant levels~~ of ~~degradation~~purported ofbreaches ~~materials over time. Electrical efficiencies are high in early stages~~ of ~~use however degradation over relatively short periods of time requires expensive replacement.~~ the

~~Sonnen~~licensing ~~intended~~agreement toincluding ~~produce~~ a ~~fuel~~breach cell based on a simple design that embodied materials with higher efficiencies to simplify the manufacturing process and overcome the obstacles to mass commercialization. Until such time as the complaint against PT Group is resolved Sonnen will look to the development of ~~like~~confidentiality, ~~technologies~~insufficient ~~with~~funding ~~the~~for ~~potential~~research ~~to met energy needs through pioneering~~ and ~~innovative methods.~~

~~Research~~development activities, and ~~Development~~failure to provide direct access to our patent attorneys. On receipt of the

~~Building~~notice ~~off our experience in developing catalysis technologies, we expect to resume research and development activities at 4D Labs in the near term on resolution~~ of ~~the~~breach ~~uncertainties~~Sonnen’s ~~surrounding~~own ~~the licensing agreement or alternatively in pursuit of developing alternative technologies within our field of interest. 4D Labs is an applications and science-driven~~ research ~~center~~determined ~~within~~that ~~Simon~~PT ~~Fraser~~Group ~~University,~~was ~~located~~not ~~in British Columbia, Canada, which has offered us~~ the ~~use~~rightful ofowner ~~multiple facilities with state-~~of~~-the-art~~ ~~equipment used by academic, industrial and government researchers.~~ the

4licensed technology and had no right to grant it a license to develop or market the intended products.

~~Manufacturing~~Accordingly, on March 8, 2010, Sonnen filed a civil complaint against PT Group and Paul Leonard, one

Inof ~~the~~its ~~event~~principals, ~~Sonnen~~in ~~develops~~connection awith ~~viable~~the ~~product~~licensing ~~or products~~agreement, ~~it intends to manufacture such products at a pilot plant~~ that ~~would~~sought bemoney ~~constructed~~damages, ~~for~~ the ~~purpose~~return of meeting initial orders and proving manufacturing processes. When proven we would expect to enter into a series of joint ventures to expand the capacity of manufacturing facilities with experienced partners and to sublicense specific applications of technologies to targeted industries. We expect that our own future facilities and those of our joint venture partners and sublicenses will ultimately manufacture end user products.

~~Marketing~~shares, injunctive relief and attorney’s fees for acts of fraud, misrepresentation of prior research and

Indevelopment ~~the event that Sonnen has a commercially viable product or products~~efforts, ~~it intends to implement a public awareness campaign to educate consumers, industry leaders~~ and ~~government~~failure ~~representatives alike as~~ to ~~the~~provide ~~benefits~~sufficient oftechnical ~~our~~information ~~various~~on ~~technologies~~which ~~for a variety of applications. We expect~~ to ~~conduct~~prepare ~~this~~patents ~~campaign with the benefit of press releases, contributions~~ to ~~scientific publications, meetings with interested groups and general advertising within mass media markets.~~

~~Dependence~~secure onthe ~~Major Customers~~technology.

WeSince ~~have no customers at this time. However, if and when~~ we ~~begin to manufacture devices for commercial distribution, we~~ do not ~~expect~~believe tothat bePT ~~dependent~~Group onis ~~a few major customers due to~~ the ~~broad~~rightful ~~range~~owner of ~~possible~~the ~~applications~~proprietary ~~within~~technology ~~our intended sphere of interest.~~purportedly

~~Competition~~licensed to us, Sonnen has recorded an impairment of its investment in the licensing agreement and has

~~The~~suspended ~~fuel~~efforts ~~cell industry is highly fragmented by competing technologies employed by many companies seeking~~ to develop ~~the standard for the industry. The industry’s competitors include public companies focused on developing~~ fuel cell technologies as well as a number of electronics manufacturers, automotive manufacturers and conglomerates such as General Electric. While fuel cell research and development has been ongoing for some time, in most cases fuel cell technology ~~has~~pending ~~not been able to supplant existing technology due to higher fabrication costs and performance issues, and consequently up to this point~~ the ~~industry~~outcome inof ~~general~~Sonnen’s ~~has~~civil ~~yielded little revenue~~complaint.

~~Since~~While ~~the~~further ~~filing of a civil complaint against PT Group we have suspended research and~~ development ~~activities~~efforts related to ~~fuel~~the ~~cells and cannot be certain at this time as to whether such activities will continue. We can be certain however that whatever~~ technology wepurportedly ~~ultimately~~licensed ~~pursue, we are certain~~ to ~~be involved in intense competition with other business entities, many of which will have a competitive edge over~~ us byfrom ~~virtue~~PT ofGroup ~~their stronger financial resources and prior business experience.~~ is

~~Marketability~~unlikely, Sonnen’s plan of operation for the coming year is to investigate alternative technologies aimed

~~When~~at orimproving ifcatalysts ~~Sonnen develops a fuel cell or other alternative product~~ for ~~commercial application~~ the ~~success~~utilization of ~~that~~fuel-cells ~~product will be based on market acceptance in its many forms. Factors that might encourage market acceptance include cost, efficiency, convenience~~ and ~~application.~~related ~~Since~~catalysis ~~Sonnen~~fields ~~has~~while ~~not~~awaiting ~~yet developed a product for commercial distribution and may never do so, any more specific approach to marketability at this time, cannot be certain.~~the

5outcome of its civil complaint.

~~Patents,~~Our ~~Trademarks~~office is located at 2665 S. Bayshore Drive, ~~Licenses~~Suite 450, ~~Franchises~~Miami, ~~Concessions~~Florida 33133, and our telephone

~~Royalty~~number ~~Agreements~~is ~~and~~(305) ~~Labour~~529-4888. ~~Contracts~~Our registered agent is Eastbiz.com, Inc., located at 5348 Vegas Drive, Las

~~We have no patents~~Vegas, ~~trademarks~~Nevada, licenses, franchises, concessions, or labour contracts and have suspended the preparation of multiple patents that were to be submitted to the US Patent Office in connection with the technology purportedly licensed from PT Group89108.

~~Governmental~~Sonnen ~~and~~is ~~Environmental~~quoted ~~Regulation~~on OTC Link under the symbol “SONP.”

Our operations remain subject to a variety of national, federal, state and local laws, rules and regulations relating to, among other things, worker safety and the use, storage, discharge and disposal of environmentally sensitive materials. We are in full compliance with the Resource Conservation Recovery Act (“RCRA”), the key legislation dealing with hazardous waste generation, management and disposal. Nonetheless, under some of the laws regulating the use, storage, discharge and disposal of environmentally sensitive materials, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on or in, or emanating from, such property, as well as related costs of investigation and property damage. Laws of this nature often impose liability without regard to whether the owner or lessee knew of, or was responsible for, the presence of hazardous or toxic substances. We do not generate dangerous waste products and are not aware of any waste management concerns in connection with our operations. We believe that we are in compliance in all material respects with all laws, rules, regulations and requirements that affect our business. Further, we believe that compliance with such laws, rules, regulations and requirements does not impose a material impediment on our ability to conduct business. 3

Climate Change Legislation and Greenhouse Gas Regulation Many studies over the past couple decades have indicated that emissions of certain gases contribute to warming of the Earth’s atmosphere. In response to these studies, many nations have agreed to limit emissions of “greenhouse gases” or “GHGs” pursuant to the United Nations Framework Convention on Climate Change, and the “Kyoto Protocol.” Although the United States is not participating in the Kyoto Protocol, several states have adopted legislation and regulations to reduce emissions of greenhouse gases. Additionally, the United States Supreme Court has ruled, in Massachusetts, et al. v. EPA, that the EPA abused its discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources. As a result of the Supreme Court decision the EPA issued a finding that serves as the foundation under the Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and emissions limits under the Clean Air Act, even without Congressional action. Finally, acts of Congress, particularly those such as the “American Clean Energy and Security Act of 2009” approved by the United States House of Representatives, as well as the decisions of lower courts, large numbers of states, and foreign governments could widely affect climate change regulation. Greenhouse gas legislation and regulation could have a material adverse effect on our business, financial condition, and results of operations.Business

~~Employees~~Sonnen’s plan of operation over the next twelve months is to prosecute its civil complaint against PT

WeGroup ~~have no employees though our chief executive officer~~ and ~~our~~certain ~~chief~~of ~~financial officer and principal accounting officer serve at~~ the ~~discretion~~principals ofthereof ~~Sonnen’s board of directors. We use consultants, attorneys,~~ and ~~accountants as necessary in addition~~ to ~~professional~~consider ~~engineers~~alternative totechnologies ~~assist~~for inmerger ~~the development of our business.~~ or

6acquisition that might create value for its shareholders. We intend to focus our efforts on identifying

~~Reports~~projects tothat ~~Security~~might ~~Holders~~improve catalysts for the efficient utilization of fuel-cells and related catalysis fields.

~~Sonnen’s~~Towards ~~annual~~this report contains audited financial statements. We are not required to deliver an annual report to security holders and will not automatically deliver a copy of the annual report to our security holders unless a request is made for such delivery. We file all of our required reports and other information with the Securities and Exchange Commission (the “Commission”). The public may read and copy any materials that are filed by Sonnen with the Commission at the Commission’s Public Reference Room at 100 F Streetend, ~~N.E.,~~management ~~Washington,~~has ~~D.C.~~evaluated ~~20549.~~several ~~The~~different ~~public may obtain information on the operation of the Public Reference Room by calling the Commission at 1~~technology-~~800-SEC-0330.~~based ~~The~~research ~~statements~~projects ~~and forms filed by us with the Commission have also been filed electronically and are available for viewing or copy on the Commission maintained Internet site~~ that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The internet address for this site can be found at www.sec.gov.

~~ITEM~~might ~~1A.~~fit ~~RISK~~with ~~FACTORS~~Sonnen’s defined mission to wean the global economy off hydrocarbon-based energy

~~Sonnen’s~~sources. ~~operations~~Nonetheless, ~~and~~as ~~securities are subject to a number~~ of ~~risks. Below we have identified and discussed~~ the ~~material~~date ~~risks~~of ~~that~~this wereport ~~are~~Sonnen ~~likely~~has tonot ~~face.~~entered ~~Should~~into any ofagreement ~~the following risks occur, they will adversely affect our operations, business, financial condition and/~~or ~~operating results as well as the future trading price and/or the value of our securities.~~

~~Risks~~commitment ~~Related~~beyond those that remain dedicated to ~~Sonnen’s~~reaching ~~Business~~some resolution of its dispute with PT

~~We have a history of significant operating losses and such losses may continue in the future~~Group.

~~Since~~Fuel ~~November~~Cell 16, 2006, our expenses have resulted in continuing losses and an accumulated deficit of $2,450,678 at June 30, 2010. We expect operating losses to diminish in the near term until such time as we resume research and development efforts. Further we expect losses to continue over the long term until such time, if ever, that we are able to build our business to the point of commercializing a technology. Our only expectation of future profitability is dependent upon this result and there is no assurance that even in the event we are able to commercialize a technology that revenue from sales related to that success will be sufficient to satisfy operating costs and produce a profit. Technologies

WeSonnen’s ~~need~~intended business was to ~~continue~~develop astechnology alicensed ~~going~~from ~~concern~~PT ifGroup ~~our~~for ~~business~~initial isapplication to ~~succeed.~~

~~Our~~advances ~~independent~~in ~~accountant’s~~fuel ~~report~~cells ~~on our audited financial statements for the period ended June 30, 2010, includes an explanatory paragraph~~ that ~~notates~~would ~~that~~produce ~~there~~high ~~are~~power aefficiencies ~~number~~at ~~of factors that raise substantial doubt as to our ability to continue as~~ a ~~going~~cost ~~concern.~~lower ~~Such~~than ~~factors~~conventional identified in the report include our ability to meet our obligations, to obtain additional financing as may be required, and ultimately to attain profitability. If we are not able to continue as a going concern, it is likely that Sonnen will cease operations and our shareholders will lose their investments.fuel

7cells. Fuel cells convert fuel into electricity and heat without combustion, or noise, more efficiently than

~~Risks~~the ~~Related~~internal tocombustion ~~the~~engine, ~~Development~~using a variety of ~~Technologies~~hydrocarbon fuel sources (gasoline, natural gas or

~~General~~diesel) ~~economic~~as ~~conditions~~well ~~will~~as ~~affect~~hydrogen. ~~Sonnen’s~~The ~~operations.~~licensed technology was thought to have the potential to significantly

~~Changes~~expand in the ~~general~~operational ~~domestic~~parameters ~~and~~of ~~international~~fuel ~~climate~~cells ~~may adversely affect Sonnen’s financial performance. Factors that may contribute to a change~~ in ~~the~~ general ~~economic climate include industrial disputes, interest rates, inflation, international currency fluctuations and political and social reform~~. Further, the delayed revival of the global economy is not conducive to rapid growth, particularly of technology companies though we believe that as the world becomes more environmentally conscious, that governments are under increasing pressure to develop environmentally cleaner alternatives for generating electricity. Fuel cell technology is generally seen as a promising alternative. Despite this shift to environmental consciousness there is no assurance that governments will elect to develop cleaner energy alternatives such as fuel cell technology.

~~Environmental~~Most ~~laws~~fuel ~~and~~cells ~~other~~use ~~governmental~~expensive ~~legislation~~rare ~~may~~earth ~~affect~~or ~~our~~noble ~~business~~metals in their construction. These materials activate

~~Should~~well ~~the technology we decide to develop not comply~~ with ~~applicable~~pure ~~environmental laws or if Sonnen is exposed to liability claims~~hydrogen, ~~its~~but ~~business~~become ~~and~~corrupted ~~financial results could be seriously harmed. Any imposition of liability that is not covered by insurance or is~~ in ~~excess~~the ofpresence ~~insurance coverage could have a material adverse effect on our business, results~~ of ~~operations~~catalyst ~~and~~pollutants ~~financial~~common condition. Furthermore, changes in legislation and government policy could also negatively impact us. Sonnen is currently unaware of any introduced or proposed bills, or policy, that may cause any specific changes to its operations. However, no assurance can be given that we will be able to obtain any necessary license required in the future, or that future changes in laws or government policies affecting any technology we might develop, or products we might market, will not impose additional regulatory requirements on Sonnen, intensify competition in the fuel cell technology industry or otherwise have a material adverse effect on our business, financial condition and results of operations.

~~There~~hydrocarbon ~~are~~fuels. ~~significant~~Expensive ~~commercialization~~and ~~risks~~bulky ~~related~~fuel toreformers, ~~technological~~scrubbers ~~businesses.~~and complex pressurized systems,

~~The industry in~~ which wegreatly ~~operate~~increase ~~is characterized by~~ the ~~continual~~footprint ~~search for technological advances that deliver improved reliability, lower emission levels~~ and ~~reduced~~capital ~~cost.~~costs ~~Our growth and future financial performance will depend on Sonnen’s ability to enhance the licensed technology for the purpose~~ of developing and introducing products that keep pace with technological developments and evolving industry requirements. Should we be unable to keep pace with outside technological developments such failure will have a ~~material~~fuel ~~adverse~~cell effect on its business. The research and development required to commercialize products requires significant investment and innovation to keep pace with technological developments. Should Sonnen fail to anticipate or respond adequately to technological developmentssystem, ormust if Sonnen experiences significant delays in product development, its products may become obsolete. Should Sonnen’s products not keep pace with technological developments or fail to gain widespread market acceptance there is a significant likelihood that we may not be ~~able~~employed tobefore ~~sustain our business.~~ fuel

Wecells ~~face~~can ~~competition~~utilize existing fossil fuel streams. The extra size, additional equipment and bulk make most fuel

Wecells ~~face~~too ~~competition~~large ~~from both conventional electricity generating technology~~ and ~~fuel~~too ~~cell~~expensive ~~technology~~for ~~companies~~transport, ~~including~~small ~~competitors~~stationary ~~which~~power ~~may have greater research~~ and ~~development, management, financial, technical, manufacturing, marketing, sales, and~~ other ~~resources than those currently available to us~~applications. ~~There can be no assurance that we will be able to compete successfully against its current and future competitors.~~

8The mass commercialization of existing fuel cells also relies on the development and implementation of a

Wehydrogen ~~may~~delivery ~~face~~infrastructure ~~liability~~since ~~claims~~the onstorage, ~~our~~compression, ~~future~~and ~~products.~~safe delivery of hydrogen is a

~~Although~~primary weinhibitor ~~intend~~ to ~~implement~~commercialization. ~~exhaustive testing programs to identify potential material defects in technology we might develop~~However, ~~any~~the ~~undetected~~cost ~~defects~~associated ~~could~~with ~~harm~~developing ~~our reputation, diminish our customer base, shrink revenues~~ and ~~expose~~building ~~us to product liability claims.~~ new

Weinfrastructure ~~may~~to ~~rely~~address ~~upon~~this ~~patents~~problem ~~and~~is ~~other~~thought ~~intellectual~~of ~~property~~as prohibitive. Furthermore, all current fuel cell

Wetechnologies ~~may~~suffer ~~rely~~from onsignificant alevels ~~combination~~ of ~~patent~~degradation ~~applications,~~of ~~trade~~materials ~~secrets,~~over ~~trademarks, copyrights and licenses, together with non-disclosure and confidentiality agreements, to establish and protect proprietary rights to technologies we may decide to develop~~time. ~~Should~~Electrical ~~we be unable to adequately protect intellectual property rights or become subject to a claim of infringement, our business may be materially adversely affected.~~efficiencies

Weare ~~expect~~high ~~to prepare patent applications~~ in ~~accordance~~early ~~with~~stages our worldwide intellectual property strategy on acquiring new technologies. However, we cannot be certain that any patents will be issued with respect to future patents pending or future patent applications. Further, we do not know whether any future patents will be upheld as valid, proven enforceable against alleged infringers or be effective in preventing the development of ~~competitive~~use ~~patents.~~however ~~Sonnen~~degradation ~~believes~~over ~~that~~relatively itshort ~~has~~periods ~~implemented a sophisticated internal intellectual property management system to promote effective identification and protection~~ of ~~its~~time ~~inventions and know-how in connection with the technologies it may develop in the future.~~requires

Weexpensive ~~will rely upon co-development partners~~replacement.

WeSonnen ~~expect~~had intended to ~~derive~~produce a ~~large~~fuel ~~portion~~cell ofbased our future revenues from entering into co-development partnership agreements though we have not yet entered into any such agreements. Should we be unable to negotiate co-development partnership agreements on ~~favourable~~a ~~terms~~simple ordesign atthat ~~all,~~embodied ~~such~~materials ~~failure~~with ~~will negatively impact our results of operations.~~higher

Weefficiencies ~~will~~to ~~rely~~simplify ~~upon~~the manufacturing ~~joint~~process ~~venture~~and ~~agreements~~overcome the obstacles to mass commercialization.

~~Our~~Until ~~plan~~such oftime ~~operation~~as ~~contemplates~~the ~~entering~~complaint ~~into~~against ~~manufacturing~~PT ~~joint~~Group ~~venture~~is ~~agreements~~resolved ~~with~~Sonnen ~~one or more external parties to manufacture products based on proprietary technology. Should we be unable to secure manufacturing joint venture agreements on favourable terms or at all, such failure~~ will ~~negatively~~look ~~impact our ability~~ to ~~manufacture~~the ~~our~~development ~~anticipated products.~~of

Welike ~~may~~technologies ~~not~~with bethe ~~able~~potential to ~~effectively~~met ~~manage~~energy ~~our~~needs ~~growth~~through pioneering and innovative methods.

We expect considerable future growth in our business. However, to achieve this growth in an efficient and timely manner, we will have to maintain strict controls over our internal management, technical, accounting, marketing, and research and development departments. We believe that we have retained sufficient quality personnel to manage our anticipated future growth and have adequate reporting and control systems in place. Should we be unable to successfully manage our anticipated future growth by adherence to these strictures, costs may increase, growth could be impaired and our ability to keep pace with technological advances may be impaired which failures could result in a loss of future customers. Competition

9The fuel cell industry is highly fragmented by competing technologies employed by many companies

Weseeking ~~rely~~to ondevelop ~~key~~the ~~personnel~~standard for the industry. The industry’s competitors include public companies

~~Our~~focused ~~success depends to a large degree~~ on ~~the~~developing ~~continued~~fuel ~~services~~cell oftechnologies ~~its~~as ~~senior~~well ~~management~~as ~~and~~a ~~key~~number ~~personnel. We believe that responsible management processes, an emphasis on people management, and restraint~~ of ~~trade~~electronics ~~clauses within employment contracts reduce the likelihood of such personnel becoming competitors. Nonetheless~~manufacturers, ~~the loss of services provided by senior management, particularly to a competitor, could disrupt operations and harm our business.~~

~~Risks~~automotive ~~Related~~manufacturers toand ~~Sonnen’s~~conglomerates ~~Stock~~such as General Electric. While fuel cell research and

~~Capital~~development ~~funding~~has ~~requirements~~been ~~may~~ongoing ~~result~~for some time, in ~~dilution~~most tocases ~~existing~~fuel ~~shareholders.~~cell technology has not been able to

Wesupplant ~~must~~existing ~~realize~~technology ~~significant~~due ~~capital~~to ~~funding~~higher ~~over~~fabrication ~~the~~costs ~~next three years to acquire~~ and ~~develop~~performance ~~proprietary technologies. We intend to raise this capital through equity offerings~~issues, ~~debt~~and ~~placements~~consequently or joint ventures. Should we secure a commitment to provide us with capital such commitment may obligate us to issue shares of our common stock, warrants or create other rights to acquire our common stock. New issuances of our common stock will result in a dilution of our existing shareholders interests. up

~~The~~to ~~market~~this ~~for~~point ~~our~~the ~~stock~~industry isin ~~limited~~general ~~and~~has ~~our~~yielded ~~future~~little ~~stock price may be volatile~~revenue.

The market for our common stock on the Over the Counter Bulletin Board is limited to sporadic trading which may result in future volatility in the market price of our stock. Due to these factors our shareholders may face extraordinary difficulties in selling Sonnen’s shares in an orderly and timely manner. 4

WeSince dothe ~~not~~filing ~~pay~~of ~~cash~~a ~~dividends.~~civil complaint against PT Group we have suspended research and development

~~Sonnen~~activities ~~does~~related ~~not~~to ~~pay~~fuel ~~cash~~cells ~~dividends. We have not paid any cash dividends since inception~~ and ~~have~~cannot ~~no intention of paying any cash dividends in the foreseeable future. Any future dividends would~~ be certain at ~~the~~this ~~discretion~~time ofas ~~our~~to ~~board~~whether ofsuch ~~directors~~activities ~~and~~will ~~would depend on, among other things, future earnings, our operating and financial condition, our capital requirements, and general business conditions~~continue. ~~Therefore, shareholders should not expect any type of cash flow from their investment.~~

~~FINRA~~We ~~sales~~can ~~practice~~be ~~requirements~~certain ~~may~~however ~~limit~~that awhatever ~~stockholder’s~~technology ~~ability~~we toultimately ~~buy~~pursue, ~~and~~we ~~sell~~are ~~our~~certain ~~stock.~~to be involved

~~The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the Commission’s penny stock rules~~ in ~~trading~~intense ~~our~~competition ~~securities~~with ~~and~~other ~~require~~business ~~that a broker/dealer have reasonable grounds for believing that the investment is suitable for that customer~~entities, ~~prior~~many to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of ~~these~~which ~~rules, the FINRA believes that there is a high probability that speculative, low priced securities~~ will ~~not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may~~ have ~~the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As~~ a ~~result,~~competitive ~~fewer~~edge ~~broker/dealers~~over ~~may be willing to make a market in our common stock, reducing a shareholder’s ability to resell shares of our common stock.~~us

10by virtue of their stronger financial resources and prior business experience.

~~We incur significant expenses as a result of the Sarbanes-Oxley Act of 2002, which expenses may continue to negatively impact our financial performance.~~Marketability

WeWhen ~~incur~~or ~~significant~~if ~~legal,~~Sonnen ~~accounting~~develops ~~and other expenses as~~ a ~~result~~fuel ofcell ~~the~~or ~~Sarbanes-Oxley~~other ~~Act~~alternative ofproduct ~~2002,~~for ascommercial ~~well as related rules implemented by the Commission~~application, ~~which control~~ the corporate governance practices of public companies. Compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002, as discussed in the following risk factor, has substantially increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly.

~~Our~~success ~~internal~~of ~~controls~~that ~~over~~product ~~financial~~will ~~reporting~~be ~~are~~based ~~not~~on ~~considered~~market ~~effective~~acceptance ~~which conclusion may result~~ in aits ~~loss~~many offorms. ~~investor~~Factors ~~confidence~~that ~~in our reports and in turn have an adverse effect on our stock price.~~might

~~Pursuant~~encourage tomarket ~~Section~~acceptance ~~404~~include ~~of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our management on our internal controls over financial reporting. Such report must contain~~cost, ~~among other matters~~efficiency, anconvenience ~~assessment~~and of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effectiveapplication. ~~This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management.~~ Since weSonnen ~~are~~has unable to assert that our internal controls are effective, our investors may lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.not

~~Sonnen’s~~yet ~~shareholders~~developed a product for commercial distribution and may ~~face~~never ~~significant~~do ~~restrictions~~so, onany ~~their~~more ~~stock.~~specific approach to

~~Our~~marketability common stock is and will be subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at ~~less~~this ~~than $5.00 per share or that have tangible net worth of less than $5~~time,~~000,000~~ ~~($2,000,000~~cannot ifbe ~~the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete~~ certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If the Company remains subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If the Company’s securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

~~ITEM~~Patents, ~~1B.~~Trademarks, ~~UNRESOLVED~~Licenses, ~~STAFF~~Franchises, ~~COMMENTS~~Concessions,

~~None.~~Royalty Agreements and Labour Contracts

~~ITEM~~We 2.have ~~PROPERTIES~~no patents, trademarks, licenses, franchises, concessions, or labour contracts and have suspended

~~Sonnen~~the ~~currently~~preparation ~~maintains its corporate offices at 2829 Bird Avenue, Suite 12, Miami, Florida 33133 in office space provided by one~~ of ~~our~~multiple ~~directors~~patents ~~at no charge to us. Sonnen does not believe~~ that itwere ~~will need~~ to ~~procure~~be ~~additional~~submitted ~~office at any time in the near future~~ to ~~carry out~~ the ~~plan~~US ofPatent ~~operation~~Office ~~described~~in ~~herein.~~connection with

11the technology purportedly licensed from PT Group.

~~ITEM~~Governmental 3.and ~~LEGAL~~Environmental ~~PROCEEDINGS~~Regulation

OnOur ~~March~~prospective 8,operations ~~2010,~~will ~~Sonnen~~be ~~filed~~subject ato ~~complaint in the Circuit Court of the 11th Judicial Court In and For Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with~~ a ~~breach~~variety of ~~the licensing agreement dated July 27~~national, ~~2009. The complaint seeks: (i) money damages for fraud that stem from reliance on PT Group's claim of ownership over certain proprietary information~~federal, PTstate ~~Group’s misrepresentation of efforts credited to prior research~~ and ~~development~~local ~~and PT Group’s failure to provide sufficient technical information on which to prepare patents to secure the technology~~laws, ~~(ii)~~rules the return of Sonnen shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief sought to prohibit Mr. Leonard’s use of confidential information to which he is not entitled, and ~~(iv) reasonable attorney’s fees. Sonnen expects to succeed on the merits of its claims.~~

~~ITEM~~regulations 4.relating ~~(REMOVED~~to, ~~AND~~among ~~RESERVED)~~other things, worker safety and the use, storage, discharge and disposal of

~~Removed~~environmentally ~~and~~sensitive ~~reserved~~materials. We are in full compliance with the Resource Conservation Recovery

~~PART~~Act II(“RCRA”), the key legislation dealing with hazardous waste generation, management and disposal.

~~ITEM~~Nonetheless, 5.under ~~MARKET~~some ~~FOR~~of ~~REGISTRANT’S~~the ~~COMMON~~laws ~~EQUITY,~~regulating ~~RELATED~~the ~~STOCKHOLDER~~use, ~~MATTERS~~storage, ~~AND~~discharge ~~BUSINESS~~and ~~ISSUER~~disposal ~~PURCHASES OF EQUITY SECURITIES~~of

~~Sonnen’s~~environmentally ~~common~~sensitive ~~stock is quoted on the Over the Counter Bulletin Board~~materials, aan ~~service~~owner ~~maintained~~or bylessee ~~FINRA under the symbol “SONP”. Trading has been limited and sporadic and the quotations set forth below are not necessarily indicative~~ of ~~actual~~real ~~market~~estate ~~conditions. Further, these prices reflect inter-dealer prices without retail mark-up, mark-down, or commission, and~~ may ~~not~~be ~~necessarily~~liable ~~reflect actual transactions. The following table sets forth~~ for the ~~periods~~costs ~~indicated the high and low bid prices for the common stock as reported for each quarterly period. The prices have been adjusted to reflect a ten for one forward split effective May 26, 2009.~~of

High and Low Bid Prices Since Quotation on the OTCBB
Year	Quarter Ended	High	Low
2010	June 30	$0.80	$0.40
	March 31	$1.00	$0.30
2009	December 31	$1.25	$1.00
	September 30	$1.10	$0.30
	June 30	$0.35	$0.15
	March 31	$0.15	$0.15
2008	December 31	$0.20	$0.15
	September 30	$0.00	$0.00

removal or remediation of certain hazardous or toxic substances located on or in, or emanating from, such

~~Capital~~property, ~~Stock~~as well as related costs of investigation and property damage. Laws of this nature often impose

~~The~~liability ~~following~~without isregard ato ~~summary~~whether of the ~~material~~owner ~~terms~~or oflessee ~~the~~knew ~~Sonnen’s~~of, ~~capital~~or ~~stock.~~was ~~This~~responsible ~~summary~~for, isthe ~~subject~~presence ~~to and qualified by our articles~~ of ~~incorporation and bylaws.~~

12hazardous or toxic substances. We do not generate dangerous waste products and are not aware of any

~~Common~~waste ~~Stock~~management concerns in connection with our operations. We believe that we are in compliance in

Asall ofmaterial ~~October~~respects ~~12,~~with ~~2010~~all ~~there~~laws, ~~were fifty-six shareholders of record holding a total of 67~~rules,~~893,000~~ ~~shares~~regulations ~~of fully paid~~ and ~~non-assessable~~requirements ~~common stock of the 250,000,000 shares of common stock, par value $0.0001, authorized. The board of directors believes~~ that ~~the~~affect ~~number of beneficial owners is greater than the number of record holders because a portion of~~ our ~~outstanding common stock is held in broker “street names” for the benefit of individual investors~~business. ~~The~~Further, holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no pre-emptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.we

~~Preferred~~believe ~~Stock~~that compliance with such laws, rules, regulations and requirements does not impose a material

Asimpediment ofon ~~October~~our ~~12,~~ability ~~2010~~to ~~there~~conduct ~~were no shares issued and outstanding of the 50,000,000 shares of preferred stock authorized~~business. The par value of the preferred stock is $0.0001 per share. Sonnen’s preferred stock may have such rights, preferences and designations and may be issued in such series as determined by the board of directors.

~~Dividends~~Climate Change Legislation and Greenhouse Gas Regulation

~~Sonnen~~A ~~has~~majority ~~not~~of ~~declared any cash dividends since inception and does not anticipate paying any dividends in~~ the ~~near~~climate ~~future.~~change ~~The~~related ~~payment~~studies ofover ~~dividends is within~~ the ~~discretion~~past ofcouple ~~the~~decades ~~board~~have ofindicated ~~directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions~~ that ~~currently limit Sonnen’s ability to pay dividends on its common stock other than those generally imposed by applicable state law.~~

~~Securities~~emissions ~~Authorized~~of ~~For~~certain ~~Issuance~~gases ~~under~~contribute ~~Equity~~to ~~Compensation~~warming ~~Plans~~of the Earth’s atmosphere. In response to these studies,

~~Sonnen~~many ~~adopted~~nations ~~The~~have ~~Sonnen~~agreed ~~2009 Stock Option Plan on August 31, 2009 in an effort~~ to ~~promote~~limit ~~the~~emissions ~~interests~~ of ~~Sonnen~~“greenhouse bygases” ~~providing~~or ~~eligible~~“GHGs” ~~persons~~pursuant ~~and companies with the opportunity~~ to ~~acquire or increase a proprietary interest in Sonnen with~~ the ~~facility to grant up to five million (5,000,000) non-statutory stock options as an incentive for eligible persons to continue their employment or service.~~ United

~~Warrants~~Nations Framework Convention on Climate Change, and the “Kyoto Protocol.” Although the United

~~Sonnen~~States ~~issued~~did ~~warrants~~not toadopt ~~purchase~~the ~~312,500~~Kyoto ~~shares of its common stock at an exercise price of $1.20 per share on September 30~~Protocol, ~~2009~~several instates ~~connection~~have ~~with~~adopted alegislation ~~private~~and ~~placement~~regulations ofto ~~common stock. The warrants must be exercised on or before September 30, 2011.~~reduce

~~Stock~~emissions ~~Options~~of greenhouse gases.

Sonnen authorized the grant of an aggregate of one million eight hundred thousand (1,800,000) options with an exercise price of $1.00 per share on August 31, 2009 pursuant to its stock option plan that vest over a three year period ended August 31, 2013, in equal increments of one-third each year or in full if involuntarily terminated. 5

13The United States Supreme Court ruled, in Massachusetts, et al. v. EPA, that the EPA abused its

~~Sonnen~~discretion ~~authorized~~under the ~~grant~~Clean ofAir anAct ~~additional~~by ~~one~~refusing ~~hundred thousand (100,000) options with an exercise price of $1.25 per share on November 9, 2009 pursuant~~ to ~~its~~regulate ~~stock~~carbon ~~option~~dioxide ~~plan~~emissions ~~that~~from ~~vest~~mobile ~~over a two year period ended November 9, 2010, in equal increments of one-half on the date of grant and the remainder on the anniversary of the following year or in full if involuntarily terminated~~sources.

~~Sonnen~~As ~~authorized the grant of an additional one hundred thousand (100,000) options with an exercise price of $1.25 per share on January 1, 2010 pursuant to its stock option plan that vest over~~ a ~~three~~result ~~year period ended January 1, 2012, in equal increments~~ of ~~one-third third on~~ the ~~date~~Supreme ofCourt ~~grant~~decision ~~and~~ the ~~remainder~~EPA onissued ~~the~~a ~~anniversarys~~finding ofthat ~~the~~serves ~~following~~as ~~years~~the orfoundation ~~in full if involuntarily terminated.~~under

~~Convertible~~the ~~Securities~~Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and

~~Sonnen~~emissions ~~had~~limits nounder ~~securities~~the ~~convertible~~Clean ~~into~~Air ~~the~~Act, ~~shares~~even ofwithout ~~its~~Congressional ~~common~~action. ~~stock~~Finally, asacts of ~~June 30~~Congress, ~~2010.~~

~~Transfer~~the ~~Agent~~decisions of lower courts, large numbers of states, and ~~Registrar~~foreign governments could widely affect

~~Our~~climate ~~transfer~~change ~~agent is Island Capital Management, LLC, d/b/a Island Stock Transfer, located at 100 Second Avenue South, Suite 300, St~~regulation. ~~Petersburg,~~Greenhouse ~~Florida,~~gas ~~33701.~~legislation ~~Their~~and ~~phone~~regulation ~~number~~could ishave ~~(727)~~a ~~289-0010.~~material adverse effect

~~Recent~~on ~~Sales~~our ofbusiness, ~~Unregistered~~financial ~~Securities;~~condition, ~~Use~~and results of ~~Proceeds from Registered Securities~~operations.

~~None.~~Employees

~~Purchases~~We ofhave ~~Equity~~no ~~Securities~~employees ~~made~~though byour ~~the~~chief ~~Issuer~~executive ~~and~~officer, ~~Affiliated~~chief ~~Purchasers~~financial officer, and principal

~~Sonnen~~accounting ~~has~~officer ~~not~~serve ~~repurchased~~at ~~any~~the ~~shares~~discretion of ~~its~~Sonnen’s ~~common~~board ~~stock~~of ~~during~~directors. ~~the~~We ~~fiscal~~use ~~year ended June 30~~consultants, ~~2010.~~attorneys,

~~ITEM~~and 6.accountants ~~SELECTED~~as ~~FINANCIAL~~necessary ~~DATA~~in addition to professional engineers to assist in the development of our

~~Not applicable~~business.

~~ITEM~~Reports 7.to ~~MANAGEMENT’S~~Security ~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION~~Holders

~~This Management~~Sonnen’s ~~Discussion~~annual ~~and Analysis of Financial Condition and Results of Operations and other parts of this current~~ report ~~contain~~contains ~~forward-looking~~audited ~~statements~~financial ~~that involve risks and uncertainties. Forward-looking~~ statements ~~can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms~~. ~~Forward-looking~~We ~~statements~~ are not ~~guarantees~~required of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to ~~those~~deliver ~~discussed~~an in the subsection entitled Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition below. The following discussion should be read in conjunction with our financial statements and notes thereto included in this current report. Our fiscal year end is June 30. annual

~~Discussion~~report to security holders and ~~Analysis~~will not automatically deliver a copy of the ~~Sonnen’s~~annual ~~Plan~~report ofto ~~Operation~~our security

~~Sonnen’s~~holders ~~plan~~unless ofa ~~operation~~request ~~for the coming year~~ is tomade ~~resume research and development into improving catalysts~~ for ~~the utilization of fuel-cells and related catalysis fields~~ such ~~as emission abatement and ceramic technologies~~delivery. We ~~have~~file ~~not~~all ~~generated~~of ~~any~~our ~~revenue~~required ~~since~~reports ~~inception.~~and other

14information with the Securities and Exchange Commission (the “Commission”). Since the requisite filing

~~Business~~deadline ~~Strategy~~for this annual report, Sonnen has been delinquent in fulfilling its periodic reporting obligations

~~Sonnen’s~~pursuant ~~plan~~to ~~of operation begins with~~ the ~~resumption~~Securities ~~of intensive research~~ and ~~development~~Exchange ~~activities~~Act ~~during~~of ~~which~~1934, ~~time~~as weamended, ~~will take steps to develop~~ and ~~lay~~is ~~the~~currently ~~ground~~in ~~work to develop or acquire a portfolio of proprietary technology that can be commercialized over~~ the ~~near~~process ~~term.~~of

~~Research~~complying with its reporting obligations. The public may read and ~~Development~~copy any materials that are filed by

Sonnen ~~has~~with ~~suspended its development plan for~~ the ~~technology~~Commission ~~licensed~~at ~~from PT Group. While awaiting resolution of~~ the ~~uncertainties~~Commission’s ~~surrounding~~Public ~~the~~Reference ~~licensing~~Room ~~agreement~~at ~~Sonnen~~100 ~~intends~~F ~~to identify~~Street, ~~acquire and develop alternative innovative technologies that it might advance to commercial applications~~N. E.,

~~Management~~Washington, ~~understands that new technologies must meet several critical milestones in advance of commercialization~~D.C. ~~Milestones include cost effectiveness, energy efficiencies, convenience of use and practicability~~20549. WeThe ~~believe~~public ~~that~~may ~~our~~obtain ~~products~~information will be able to effectively compete with today’s accepted technologies by optimizing low-cost manufacturing processes, ensuring enhanced energy efficiencies, and providing a reliable product with the flexibility to rely on ~~alternative fuel sources. Our anticipated time frame for meeting these objectives and initiating~~ the ~~commercialization~~operation of ~~new~~the ~~technologies~~Public ~~is three years.~~ Reference

~~Marketing~~Room by calling the Commission at 1-800-SEC-0330. The statements and forms filed by us with the

InCommission ~~the~~have ~~event~~also abeen ~~commercially~~filed ~~viable~~electronically ~~product or products is ready to be manufactured, we intend to implement a pubic awareness campaign to educate consumers, industry leaders~~ and ~~government~~are ~~representatives~~available ~~alike as to the benefits of our technology~~ for aviewing ~~variety~~or ofcopy ~~applications.~~on ~~We expect to conduct such a campaign with~~ the benefit of press releases, contributions to scientific publications, meetings with environmental groups and general advertising within mass media markets. We anticipate a response that will include extensive media coverage, scientific community scrutiny, and support from the environmental lobby. Commission

~~Manufacturing~~maintained Internet site that contains reports, proxy and information statements, and other information

Weregarding ~~intend~~issuers tothat ~~manufacture~~file ~~future~~electronically ~~products~~with ~~at a pilot plant to be constructed for~~ the ~~purpose of meeting initial orders for fuel cells or like applications and proving our manufacturing processes~~Commission. ~~When~~The ~~proven~~internet weaddress ~~would expect to enter into a series of joint ventures to expand manufacturing facilities and to sublicense specific applications~~ for ~~any~~this ~~given~~site ~~technology~~can ~~to targeted industries. Our facilities and those of our joint venture partners and sublicenses will manufacture end user products that incorporate our fuel cells or like products.~~ be

~~Financing~~found at www.sec.gov.

~~Sonnen~~ITEM intends to raise funds to meet its operational requirements through a combination of (i) private placements of equity to accredited investors, (ii) issuance of debt instruments to accredited investors, (iii) by government grant, and/or (iv) sub-license agreements1A.

~~Revenues~~RISK FACTORS

WeNot ~~expect~~required ~~to realize revenue from the direct sale~~ of ~~products~~smaller ~~derived~~reporting ~~from any technology we might develop, from revenues accrued from joint venture relationships and from royalties~~companies.

15ITEM 1B.

~~Business~~UNRESOLVED ~~Strategy~~STAFF ~~Risks~~ COMMENTS

~~Sonnen’s~~Not business development strategy is prone to significant risks and uncertainties which could have an immediate impact on its efforts to generate a positive net cash flow and could deter the anticipated development of advanced energy enhanced technology. Historically, Sonnen has not generated sufficient cash flow to sustain operations and has had to rely on debt or equity financing to remain in business. Therefore, we cannot offer that future expectations that any technology Sonnen might develop will be commercially developed or that it will be sufficient to generate the revenue required ~~for its operations. Should we be unable to generate cash flow, Sonnen may be forced to seek additional debt or equity financing as alternatives to the cessation~~ of ~~operations.~~smaller ~~The~~reporting ~~success of such measures can in no way be assured~~companies.

~~Results~~ITEM ~~of Operations~~2.

~~Net Losses~~PROPERTIES

~~For~~Sonnen ~~the~~currently ~~period~~maintains ~~from~~its ~~inception~~corporate ~~(November~~offices ~~16,~~at ~~2006)~~2665 ~~until~~S. ~~June~~Bayshore 30Drive, ~~2010,~~Suite ~~Sonnen incurred net losses of $2,~~450,~~678.~~ ~~Net losses for the year ended June 30~~Miami, 2010, were $2,380,655 as compared to $14,245 for the year ended June 30, 2009. The increase in net losses over the comparative periods can be attributed to an increase in operating expenses in connection with the development of the licensed technology.Florida

We33133 ~~will~~in ~~likely~~office ~~continue~~space toprovided ~~operate~~by atone ~~a loss through fiscal 2011 and due to the suspension~~ of our ~~research~~directors ~~and~~at ~~development~~no ~~operations~~charge weto ~~cannot~~us. ~~determine whether~~ Sonnen ~~will~~does ~~ever~~not ~~generate~~believe ~~revenues~~that ~~from operations.~~it

~~Operating~~will ~~Expenses~~need to procure additional office at any time in the near future to carry out the plan of operation

~~Operating~~described ~~expenses for the year ended June 30, 2010, were $1,750,515 as compared to $14,270 for the year ended June 30, 2009~~herein. The increase in operating expenses over the comparative periods can be attributed to increases in all segments of our operations. Sonnen realized increases in general and administrative expenses, professional fees, consulting fees, compensation and research and development expenses over the comparative period. We expect operating expenses to decrease in the near term as a reflection of suspended research and development activities and the termination of various consulting agreements. Over the long term operating expenses are expected to increase as Sonnen acts to develop new technologies.

~~Income Tax Expense (Benefit)~~ 6

~~Sonnen~~ITEM ~~has a prospective income tax benefit resulting from a net operating loss carry-forward and start up costs that will offset any future operating profit~~3.

~~Impact~~LEGAL ~~of Inflation~~ PROCEEDINGS

~~Sonnen~~On ~~believes~~March ~~that~~8, ~~inflation~~2010, ~~has~~Sonnen ~~not~~filed ~~had~~ a ~~material~~complaint ~~affect~~in ~~on operations for~~ the ~~period~~Circuit ~~from~~Court ~~November~~of ~~16,~~the ~~2006~~11th ~~(inception)~~Judicial toCourt ~~June~~In ~~30,~~and ~~2010.~~For

16Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with a breach of the

~~Capital~~licensing ~~Expenditures~~agreement dated July 27, 2009. The complaint seeks: (i) money damages for fraud that stem

~~Sonnen~~from ~~has~~reliance ~~not~~on ~~spent~~PT ~~significant~~Group's ~~amounts~~claim of ~~capital~~ownership ~~for~~over ~~the~~certain ~~period~~proprietary ~~from November 16~~ information, ~~2006~~PT ~~(inception) to June 30, 2010.~~Group’s

~~Liquidity~~misrepresentation of efforts credited to prior research and ~~Capital~~development ~~Resources~~and PT Group’s failure to provide

~~Sonnen~~sufficient ~~had~~technical ainformation ~~working~~on ~~capital~~which ~~deficit~~to ofprepare ~~$464,243,~~patents ~~current~~to ~~assets~~secure ofthe $9technology,~~172~~ ~~and~~(ii) ~~total~~the ~~assets~~return of ~~$10,599 at June 30, 2010.~~

Sonnen ~~had~~shares ~~current~~issued ~~and~~to ~~total~~PT ~~liabilities~~Group ofas ~~$473,415~~compensation atfor ~~June~~the ~~30,~~rights ~~2010 that consisted of accounts payable~~licensed, ~~notes~~(iii) ~~payable~~injunctive ~~and~~relief ~~accrued~~sought ~~liabilities.~~ to

~~Sonnen~~prohibit Mr. Leonard’s ~~shareholder~~use ~~deficit~~of ~~was~~confidential ~~$462,817~~information asto ofwhich ~~June~~he 30is not entitled, ~~2010.~~and (iv) reasonable

~~For the period from inception (November 16, 2006) until June 30, 2010, Sonnen~~attorney’s ~~cash~~fees. ~~flow used in operating activities was $802,929~~Mr. ~~Cash~~Leonard ~~flows~~responded ~~used in operating activities for the year ended June 30, 2010, were $742,388 as compared~~ to ~~$11,390 for~~ the ~~year~~complaint ~~ended June 30, 2009. The increase~~ in ~~cash~~an ~~flow~~answer ~~used~~dated inNovember ~~operating activities can be primarily attributed to a net loss incurred from professional fees~~19, ~~consulting~~2012 fees, employment expenses and research and development activities in connection with the licensing agreement. Sonnen expects that cash flow used in operating activities will decrease in the near terms as further development activities related to the licensing agreement have been suspended.asserting

~~For~~that ~~the~~had ~~period~~no ~~from~~knowledge ~~inception~~of ~~until June 30, 2010, Sonnen’s cash flow used in investing activities was $1,853. Cash flows used in investing activities for~~ the ~~year~~subject ~~ended~~matter ~~June~~of ~~30, 2010 was $1,853 as compared to $0 for~~ the ~~year ended June 30, 2009~~suit. ~~Cash~~Sonnen ~~flows~~has ~~used~~been inunable ~~investing activities in the current period were related~~ to ~~the~~serve ~~purchase~~PT ofGroup ~~office equipment. Sonnen expects that cash flow used in investing activities will increase in future periods.~~to

~~For the period from inception until June 30, 2010, Sonnen’s cash flow provided by financing activities was $805,621~~date. ~~Cash~~Should ~~flows provided by financing activities for~~ the ~~year~~relief ~~ended~~sought ~~June~~be 30adjudicated, ~~2010 were $736,081 as compared to $0 for the year ended June 30, 2010.~~ Sonnen expects ~~that cash flow provided by financing activities will increase over the near term as it looks~~ to ~~resume~~succeed ~~research~~on ~~and development activities in connection with~~ the ~~development~~merits of ~~new~~its ~~technologies~~claims.

~~Sonnen’s~~ITEM ~~current assets are insufficient to conduct its plan of operation over the next twelve (12) months~~4. We will have to realize at least $500,000 in debt or equity financing over the next twelve months to fund our continued operations. Sonnen has no current commitments or arrangements with respect to, or immediate sources of this funding. Furthermore, no assurances can be given that such funding is available. Sonnen’s shareholders are the most likely source of new funding in the form of loans or equity placements though none have made any commitment for future investment and Sonnen has no such agreement formal or otherwise. Sonnen’s inability to obtain funding will have a material adverse affect on its ability to remain a technology development company and effect its plan of operation.

~~Cash~~(REMOVED ~~dividends~~AND ~~are not expected to be paid in the foreseeable future.~~RESERVED)

~~Sonnen~~Removed ~~had~~and ~~no lines of credit or other bank financing arrangements as of June 30, 2010~~reserved.

~~Commitments for future capital expenditures were not material as of June 30, 2010.~~7

17PART II

~~Sonnen~~ITEM ~~had no contractual commitment with any of its officers or directors as of June 30, 2010~~5.

~~Sonnen~~MARKET ~~had~~FOR noREGISTRANT’S ~~current~~COMMON ~~plans for the purchase or sale of any plant or equipment as of June 30~~EQUITY, ~~2010.~~ RELATED

~~Sonnen~~STOCKHOLDER ~~has~~MATTERS, noAND ~~plans~~BUSINESS toISSUER ~~make~~PURCHASES ~~any changes in the number of employees as of June 30, 2010.~~ OF

~~Off~~EQUITY ~~Balance Sheet Arrangements~~SECURITIES

~~As of June 30, 2010,~~ Sonnen’s ~~had~~common nostock ~~off-balance~~is ~~sheet~~quoted ~~arrangements that have or are reasonably likely to have a current or future effect~~ on ~~our~~OTC ~~financial condition~~Link, ~~changes~~a inservice ~~financial~~maintained ~~condition,~~by ~~revenues~~OTC orMarkets ~~expenses~~Group, ~~results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders~~LLC.

~~Going~~under ~~Concern~~the symbol “SONP”. Trading has been limited and sporadic and the quotations set forth below are

~~Our~~not ~~auditor~~necessarily ~~has~~indicative ~~included an explanatory paragraph in its report as to Sonnen’s ability to continue as a going concern as a result~~ of ~~net~~actual ~~losses~~market ~~of $2,380,655 as of June 30, 2010~~conditions. ~~Sonnen’s~~ ability to continue as a going concern is subject to the ability of Sonnen to realize a profit and /or obtain funding from outside sources. Management’s plan to address Sonnen’s ability to continue as a going concern includes: (i) obtaining funding from the private placement of debt or equity; (ii) realizing revenues from the commercialization of new technologies; and (iii) obtaining loans and grants from financial or government institutions. Management believes that it will be able to obtain funding to allow Sonnen to remain a going concern through the methods discussed aboveFurther, ~~though~~these ~~there~~prices ~~can~~reflect beinter-dealer ~~no assurances that such methods will prove successful.~~prices

~~Forward~~without ~~Looking~~retail ~~Statements~~mark-up, ~~and~~mark-down, ~~Factors~~or ~~That~~commission, ~~May~~and ~~Affect~~may ~~Future~~not ~~Results~~necessarily ~~and~~reflect ~~Financial~~actual ~~Condition~~transactions.

The ~~statements~~following ~~contained~~table insets ~~the~~forth ~~section~~for ~~titled “Results of Operations” and “Description of Business”, with~~ the ~~exception~~periods ofindicated ~~historical facts, are forward looking statements. A safe-harbor provision may not be applicable to~~ the ~~forward~~high ~~looking statements made in this current report. Forward looking statements reflect our current expectations~~ and ~~beliefs~~low ~~regarding~~bid ~~our~~prices ~~future~~for ~~results~~the ofcommon operations, performance, and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not materialize. These statements include, but are not limited to, statements concerning:stock

~~· our~~as ~~anticipated~~reported ~~financial~~for ~~performance;~~each quarterly period.

~~· uncertainties~~High ~~related~~and toLow ~~the~~Bid ~~research~~Prices ~~and~~Since ~~development~~Quotation ofon ~~the~~OTC ~~licensed technology;~~Link

~~· our ability to generate revenues through sales to fund future operations;~~Year

~~· our~~Quarter ~~ability to raise additional capital to fund cash requirements for future operations;~~Ended

~~· the volatility of the stock market; and~~High

~~· general economic conditions.~~Low

We wish to caution readers that our operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated including the factors set forth in the section entitled “Risk Factors” included elsewhere in this report. We also wish to advise readers not to place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other that is required by law.2011

18June 30

~~Stock-Based Compensation~~$0.08

~~We have adopted Accounting Standards Codification Topic (“ASC”) 718, formerly SFAS No~~$0. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.08

WeMarch account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services.31

~~Critical Accounting Policies~~$0.20

In the notes to the audited consolidated financial statements for Sonnen for the years ended June 30, 2010 and 2009, included in this Form 10-K Sonnen discussed those accounting policies that are considered to be significant in determining the results of operations and financial position$0. ~~Sonnen’s management believes that their accounting principles conform to accounting principles generally accepted in the United States of America.~~15

The preparation of financial statements requires management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, warranty obligations, product liability, revenue, and income taxes. We base our estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions.2010

~~Recent~~December ~~Accounting Pronouncements~~31

~~Please see Note 2 to our financial statements for recent accounting pronouncements~~$0.15

~~ITEM 7A~~$0. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~15

~~Not~~September ~~required.~~30

~~ITEM 8~~$0. ~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~22

~~Our restated audited consolidated financial statements for the years ended June 30, 2010 and 2009 are attached hereto as F-1 through F-22~~$0. 15

19June 30

~~SONNEN CORPORATION~~$0.80

~~(A Development Stage Company)~~$0.40

~~June~~March ~~30, 2010 and June 30, 2009~~31

~~INDEX~~$1.00

~~Page~~$0.30

~~Report of Independent Registered Public Accounting Firm F-2~~2009

~~Report~~December ~~of Independent Registered Public Accounting Firm F-3~~31

~~Consolidated Balance Sheets F-4~~$1.25

~~Consolidated Statements of Operations F-5~~$1.00

~~Consolidated~~September ~~Statement of Stockholders’ Equity (Deficit) F-6~~30

~~Consolidated Statements of Cash Flows F-7~~$1.10

~~Notes to Consolidated Financial Statements F-8~~$0.30

~~F-1~~Capital Stock

~~REPORT~~The OFfollowing ~~INDEPENDENT~~is ~~REGISTERED~~a ~~PUBLIC~~summary ~~ACCOUNTING~~of ~~FIRM~~the material terms of the Sonnen’s capital stock. This summary is subject

Toto ~~the~~and ~~Board~~qualified by our articles of ~~Directors~~incorporation and bylaws.

~~Stockholders~~Common ~~of Sonnen Corporation~~ Stock

WeAs ~~have audited the accompanying balance sheet~~ of ~~Sonnen~~March ~~Corporation and Subsidiary as of June 30~~19, ~~2010~~2013 ~~and~~there ~~the~~were ~~related~~fifty-six ~~statements~~shareholders of ~~income,~~record ~~stockholders’~~holding ~~equity,~~a ~~and~~total ~~cash~~of ~~flows for the year ended June 30~~67, ~~2010 and for the period from November 16~~893,000 ~~2006~~shares (inception) to June 30, 2010. Sonnen Corporation’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.of

Wefully ~~conducted~~paid ~~our~~and ~~audit~~non-assessable incommon ~~accordance~~stock ~~with the standards~~ of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have250, ~~nor were we engaged to perform~~000,000 anshares ~~audit~~ of ~~its~~common internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstancesstock, ~~but~~par not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.value

~~In our opinion~~$0.0001, ~~the~~authorized. ~~financial~~The ~~statements~~board ~~referred to above present fairly, in all material respects, the financial position~~ of ~~Sonnen~~directors ~~Corporation~~believes ~~and~~that ~~Subsidiary as of June 30, 2010, and~~ the ~~results~~number of ~~its~~beneficial ~~operations~~owners ~~and~~is ~~its~~greater cash flows for the year ended June 30, 2010 and for the period from November 16, 2006 (inception) to June 30, 2010 in conformity with accounting principles generally accepted in the United States of America.than

~~The accompanying financial statements have been prepared assuming that~~ the ~~Company~~number ~~will~~of ~~continue~~record asholders abecause ~~going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as~~ a ~~going~~portion ~~concern. Management’s plans regarding the resolution~~ of ~~this~~our ~~issue~~outstanding ~~are~~common ~~also~~stock ~~discussed~~is held in ~~Note~~broker ~~3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~“street

~~/s/~~names” ~~BehlerMick~~for PSthe benefit of individual investors. The holders of the common stock are entitled to one vote

~~BehlerMick~~for PSeach share held of record on all matters submitted to a vote of stockholders. Holders of the common

~~Spokane,~~stock ~~Washington~~have no pre-emptive rights and no right to convert their common stock into any other securities.

~~October~~There ~~11,~~are ~~2010~~no redemption or sinking fund provisions applicable to the common stock.

~~F-2~~Preferred Stock

~~REPORT~~As OFof ~~INDEPENDENT~~March ~~REGISTERED~~19, ~~PUBLIC~~2013 ~~ACCOUNTING~~there ~~FIRM~~were no shares issued and outstanding of the 50,000,000 shares of preferred

~~Stockholders~~stock ~~and~~authorized. ~~Board~~The par value of ~~Directors~~the preferred stock is $0.0001 per share. Preferred stock may have such

~~Sonnen~~rights, ~~Corporation~~preferences and ~~subsidiary~~designations and may be issued in such series as determined by Sonnen’s Board.

~~(A Development Stage Company)~~8

~~Miami, Florida~~Dividends

~~We have audited the accompanying consolidated balance sheet of~~ Sonnen ~~Corporation~~has ~~and~~not ~~subsidiary~~declared (aany ~~development stage company) as of June 30, 2009, and the related consolidated statements of loss, stockholders’ (deficit) equity, and~~ cash ~~flows~~dividends ~~for~~since ~~the~~inception ~~year then ended~~ and ~~for~~does ~~the~~not ~~cumulative~~anticipate ~~period~~paying ~~from~~any November 16, 2006 (date of inception of the development stage) through June 30, 2009. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. dividends

~~We conducted our audit~~ in ~~accordance with~~ the ~~standards~~near ~~of the Public Company Accounting Oversight Board (United States of America)~~future. ~~Those~~The ~~standards~~payment ~~require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free~~ of ~~material~~dividends ~~misstatement. The Company~~ is ~~not~~within required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the ~~circumstances,~~discretion ~~but not for the purpose~~ of ~~expressing an opinion on~~ the ~~effectiveness~~Board ofsubject ~~the~~to ~~Company's internal control over financial reporting. Accordingly~~earnings, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Incapital ~~our opinion~~requirements, ~~the consolidated~~ financial ~~statements referred to above present fairly~~condition, ~~in all material respects, the financial position of Sonnen Corporation~~ and ~~subsidiary~~other (Arelevant ~~Development Stage Company) as of June 30~~factors. Otherwise, ~~2009,~~outside ~~the results~~ of its operations and its cash flows for the year then ended and for the cumulative period from November 16, 2006 (date of inception of the development stage) through June 30, 2009, in conformity with U.S. generally accepted accounting principles.applicable

~~The~~state ~~accompanying~~law, ~~financial~~there ~~statements~~are ~~have~~no ~~been~~restrictions ~~prepared assuming~~ that ~~the~~currently ~~Company~~limit will continue as a going concern. As discussed in Note 3 to the financial statements, the Company is in the development stage, has an accumulated deficit since inception of approximately $70,000 and incurred negative cash flows from development stage activities during the year ended June 30, 2009. These factors and others, raise substantial doubt about the CompanySonnen’s ability to ~~continue~~pay ~~as a going concern~~dividends. The ability of the Company to continue its activities and commence operations is subject to its ability to secure additional capital to meet its obligations and to fund activities and future operations. Management’s plans in regard to these matters are also described in Note 3 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Miami,~~Securities ~~Florida /s/~~Authorized ~~Dohan~~For ~~and~~Issuance ~~Company,~~under ~~P.A~~Equity Compensation Plans

~~November~~Sonnen 28adopted The Sonnen (formerly “Simple Tech) 2009 Stock Option Plan on August 31, 2009 ~~Certified~~ ~~Public~~in ~~Accountants~~an

~~F-3~~effort to promote the interests of Sonnen by providing eligible persons with the opportunity to acquire or

~~SONNEN~~increase ~~CORPORATION~~a ~~AND~~proprietary ~~SUBSIDIARY~~interest in Sonnen with the facility to grant up to five million (5,000,000) non-

~~(Formerly~~statutory ~~known~~stock options as ~~Simple~~an ~~Tech,~~incentive ~~Inc~~for eligible persons to continue their employment or service.)

~~(A DEVELOPMENT STAGE ENTERPRISE)~~Warrants

~~CONSOLIDATED~~Sonnen ~~BALANCE~~issued ~~SHEETS~~warrants to purchase 312,500 shares of its common stock at an exercise price of $1.20 per

				June 30,
			June 30, 2010	2009 (Restated)
		ASSETS
CURRENT ASSETS
Cash and cash equivalents			$ 840	$ 9,000
Prepaid expenses (Note 5)			8,332	-
Total Current Assets			9,172	9,000
OTHER ASSETS
Office furniture and equipment, net (Note 4)			1,427	-
Total Other Assets			1,427	-
Total Assets			$ 10,599	$ 9,000
	LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable			$ 96,490	$ 9,482
Accounts payable - related parties			82,130	-
Accrued payroll			13,283	-
Accrued liabilities - related parties			8,500	-
Notes payable (including accrued interest of $8,069)			273,012	-
Total Current Liabilities			473,415	9,482
COMMITMENTS AND CONTINGENCIES (Note 13)			-	-
STOCKHOLDERS' DEFICIT
Preferred Stock, $0.0001 par value, 50,000,000 shares			-	-
authorized, none issued and outstanding
Common stock, par value $0.0001, 250,000,000 shares
authorized, 67,893,000 issued and outstanding - June 30, 2010, 63,808,000 issued and outstanding – June 30, 2009			6,789	6,381
Paid-in capital			1,981,071	63,159
Accumulated deficit during the development stage			(2,450,678)	(70,022)
Total Stockholders' Deficit			(462,817)	(482)
Total Liabilities and Stockholders' Deficit			$ 10,599	$ 9,000

share on September 30, 2009 in connection with a private placement of common stock. The warrants had

~~The~~to ~~accompanying~~be ~~notes~~exercised ~~are~~on anor ~~integral~~before ~~part~~September 30, 2011. None of ~~these~~the ~~consolidated~~warrants ~~financial~~were ~~statements.~~exercised and have since

~~F-4 SONNEN CORPORATION AND SUBSIDIARY~~expired.

~~(Formerly~~Stock ~~known as Simple Tech, Inc.)~~Options

(ASonnen ~~DEVELOPMENT~~authorized ~~STAGE~~the ~~ENTERPRISE~~grant of an aggregate of one million eight hundred thousand (1,800,000) options

~~CONSOLIDATED~~with ~~STATEMENTS~~an OFexercise ~~OPERATIONS~~price of $1.00 per share on August 31, 2009 pursuant to its stock option plan that vest

					Cumulative
					amounts from
					development stage
					activities
		For the years ended			(November
		June 30,			16, 2006
		2010		2009 (Restated)	through June 30, 2010)
REVENUES		$ -		$ -	$ -
GENERAL & ADMINISTRATIVE EXPENSES
Organization costs		-		-	640
General and administrative		83,155		306	87,473
Professional fees		188,243		12,792	249,968
Consulting fees		280,727		-	280,727
Consulting and Professional fees - related parties	290,250		-		290,250
Compensation and related taxes and benefits	735,287		-		735,287
Transfer fees	4,868		1,172		8,049
Depreciation	426		-		426
Research & Development	167,560		-		167,560
Total general & administrative expenses	1,750,515		14,270		1,820,379
Loss before other income (expense) and provision for income taxes	(1,750,515)		(14,270)		(1,820,379)
Interest income/ (expense)	(8,140)		25		(6,747)
Loss on foreign currency exchange	-		-		(1,551)
Impairment loss on asset	(672,000)		-		(672,000)
Other income	50,000		-		50,000
Loss before provision for income taxes	(2,380,655)		(14,245)		(2,450,678)
Provision for income taxes	-		-		-
NET LOSS	$ (2,380,655)		$ (14,245)		$ (2,450,678)
NET LOSS PER SHARE - BASIC AND DILUTED	$ (0.04)		*
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC AND DILUTED	67,161,027		63,808,000
* = less than $.01 per share

over a three year period ended August 31, 2012, in equal increments of one-third each year or in full if

~~The~~involuntarily ~~accompanying~~terminated. ~~notes~~Since ~~are~~the aninitial ~~integral~~grant ~~part~~600,000 ofoptions ~~these~~vested ~~consolidated~~on ~~financial~~termination ~~statements.~~of services and

~~F-5~~expired unexercised in accordance with the respective stock option agreements as of June 30, 2012. The

~~SONNEN~~remaining ~~CORPORATION~~1,200,000 ~~AND~~options ~~SUBSIDIARY~~were vested as of August 31, 2012 and have since been rescinded in full by

~~(Formerly~~the ~~known~~mutual asagreement ~~Simple~~of ~~Tech,~~Sonnen ~~Inc~~and the respective grantees.)

(ASonnen ~~DEVELOPMENT~~authorized ~~STAGE~~the ~~ENTERPRISE~~grant of an additional one hundred thousand (100,000) options with an exercise

~~CONSOLIDATED~~price ~~STATEMENT~~of OF$1.25 ~~CHANGES~~per INshare ~~STOCKHOLDERS’~~on ~~EQUITY~~November ~~(DEFICIT)~~9, 2009 pursuant to its stock option plan that vest over a two year

~~FOR~~period ~~THE~~ended ~~PERIOD~~November ~~FROM~~9, ~~INCEPTION~~2010, ~~(NOVEMBER~~in ~~16,~~equal ~~2006)~~increments TOof ~~JUNE~~one-half ~~30,~~on ~~20010~~the date of grant and the remainder

							Deficit
		Common Stock		Additional Paid-in		Accumulated During the Development		Total Stockholders'
	Shares		Amount		Capital		Stage		Equity (Deficit)
Inception, November 16, 2006	-		$ -		$ -		$ -		$ -
Common stock issued to founders (November 16, 2006, at $0.0001 per share)	50,000,000		5,000		(4,500)		-		500
Private placement closed June 28, 2007, at $0.05 per share	13,808,000		1,381		67,659		-		69,040
Net loss for the year of inception	-		-		-		(6,039)		(6,039)
Balance, June 30, 2007	63,808,000		6,381		63,159		(6,309)		63,501
Net loss for the year	-		-		-		(49,738)		(49,738)
Balance, June 30, 2008	63,808,000		6,381		63,159		(55,777)		13,763
Net loss for the year	-		-		-		(14,245)		(14,245)
Balance, June 30, 2009	63,808,000		6,381		63,159		(70,022)		(482)
Shares issued for license agreement at $0.20 per share	3,360,000		336		671,664		-		672,000
Shares issued September 30, 2009 for cash at $0.80 per share	625,000		63		499,938		-		500,000
Share issued January 18, 2010 for services performed at $0.75 per share	100,000		10		100,990		-		101,000
Stock options expense	-		-		645,321		-		645,321
Net loss for the year	-		-		-		(2,380,655)		(2,380,655)
Balance, June 30, 20 10	67,893,000		$ 6,789		$ 1,981,071		$ (2,450,678)		$ (462,817)

on the anniversary of the following year or in full if involuntarily terminated. One half of the grant had

~~The~~vested ~~accompanying~~while ~~notes~~the ~~are~~remainder anwere ~~integral~~terminated ~~part~~at ofJune ~~these~~30, ~~financial statements~~2011. The vested options have since expired

~~F-6~~unexercised in accordance with the stock option agreement.

~~SONNEN~~Sonnen ~~CORPORATION~~authorized ~~AND~~the ~~SUBSIDIARY~~grant of an additional one hundred thousand (100,000) options with an exercise

~~(Formerly~~price ~~known~~of as$1.25 ~~Simple~~per ~~Tech~~share on January 1, ~~Inc.)~~2010 pursuant to its stock option plan that vest over a three year

(Aperiod ~~DEVELOPMENT~~ended ~~STAGE~~January ~~ENTERPRISE)~~1, 2012, in equal increments of one-third third on the date of grant and the

~~CONSOLIDATED~~remainder ~~STATEMENTS~~on OFthe ~~CASH~~anniversary ~~FLOWS~~of the following years or in full if involuntarily terminated. One third of the

							Cumulative amounts from development stage
			For the years ended				activities
			June 30,				(November 16,
			2010		2009 (Restated)		2006 through June 30, 2010)
CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES
Net (loss) from development stage activities		$	(2,380,655)	$	(14,245)	$	(2,450,678)
Adjustments to reconcile net loss to net cash
provided (used) by development stage activities:
Depreciation			426		-		426
Stock options vested			645,321		-		645,321
Stock issued for services			101,000		-		101,000
Impairment loss on asset			672,000		-		672,000
Changes in operating assets and liabilities:
	Increase in prepaid expenses		(8,332)		-		(8,332)
	Increase (decrease) in accounts payable		124,370		2,855		133,852
	Increase in accounts payable - related parties		82,130		-		82,130
	Increase in accrued liabilities		13,283		-		13,283
	Increase in accrued interest		8,070		-		8,070
Total adjustments			1,638,267		2,855		1,647,749
	NET CASH USED BY DEVELOPMENT STAGE ACTIVITIES		(742,388)		(11,390)		(802,929)
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchase of property and equipment		(1,853)		-		(1,853)
	NET CASH USED BY INVESTING ACTIVITIES		(1,853)		-		(1,853)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from notes payable, net		243,660		-		243,660
	Proceeds from notes payable - related parties		38,500		-		38,500
	Repayments from notes payable - related parties		(46,079)		-		(46,079)
	Proceeds from sale of common stock, net of offering costs		500,000		-		569,540
	NET CASH PROVIDED BY FINANCING ACTIVITIES		736,081		-		805,621
	NET INCREASE IN CASH AND CASH EQUIVALENTS		(8,160)		(11,390)		840
	CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		9,000		20,390		-
	CASH AND CASH EQUIVALENTS, END OF PERIOD	$	840	$	9,000	S	840
Supplemental Disclosures:
	Cash paid for income taxes	$	-	$	-	$	-
	Cash paid for interest	$	-	$	-	$	-
Non-cash Disclosures:
	Payments made by related party on behalf of the Company:
	Increase in notes payable - related parties	$	21,079	$	-	$	21,079
	Decrease in accounts payable - related parties	$	(11,079)	$	-	$	(11,079)
	Increase in prepaid expenses	$	(10,000)	$	-	$	(10,000)
		$	-	$	-	$	-
	To apply balance owed to a related party to accounts receivable:
	Decrease in accounts receivable - related party	$	40,000	$	-	$	40,000
	Repayments of note payable - related party	$	(40,000)	$	-	$	(40,000)
		$	-	$	-	$	-
	Stock issued for licensing agreement rights	$	672,000	$	-	$	672,000

grant had vested while the remainder were terminated at June 30, 2011. The vested options have since

~~The~~expired ~~accompanying~~unexercised ~~notes~~in ~~are~~accordance anwith ~~integral~~the ~~part~~stock ofoption ~~these consolidated financial statements~~agreement.

~~F-7~~Convertible Securities

~~SONNEN~~Sonnen ~~CORPORATION~~had ~~AND~~no ~~SUBSIDIARY~~other securities convertible into shares of its common stock as of June 30, 2011 or as the

~~(Formerly~~date ~~known~~of asthe ~~Simple~~filing ~~Tech,~~of ~~Inc~~this annual report.)

~~(A DEVELOPMENT STAGE ENTERPRISE)~~9

~~NOTES~~Transfer TOAgent ~~CONSOLIDATED~~and ~~FINANCIAL STATEMENTS~~Registrar

~~For~~Our ~~the~~transfer ~~years~~agent ~~ended~~is ~~June~~Island 30Capital Management, ~~2010~~LLC, ~~and~~d/b/a ~~2009~~Island Stock Transfer, located at 100 Second

~~NOTE~~Avenue 1South, –Suite ~~NATURE~~300, OFSt. ~~OPERATIONS~~Petersburg, ~~BASIS~~Florida, OF33701. ~~PRESENTATION~~Their ~~AND~~phone ~~SUMMARY~~number is (727) 289-0010.

OFRecent ~~SIGNIFICANT~~Sales ~~ACCOUNTING~~of ~~POLICIES~~Unregistered Securities; Use of Proceeds from Registered Securities

~~History, Nature of Operations and Basis of Presentation~~None.

~~Sonnen~~Purchases ~~Corporation was incorporated in the state~~ of ~~Nevada~~Equity onSecurities ~~November~~made ~~16,~~by ~~2006 as “Simple Tech, Inc.” Sonnen Corporation and its wholly-owned subsidiary, Sonnen One, Inc., are referred to herein as~~ the ~~“Company,”~~Issuer “We,” “Us,” “Our”, is in the development stage as defined under FASB ASC 915-10, "Development Stage Entities". By June 2009, the Company had been unable to realize its original business objective. In July 2009, the Company entered into a licensing agreement to research, develop and ~~market~~Affiliated ~~products that rely upon a novel process for energy generation consisting of specific materials and proprietary material combinations.~~ Purchasers

~~On November 3, 2009, the Company amended its articles of incorporation to change its name from “Simple Tech, Inc.” to “~~Sonnen ~~Corporation”~~has ~~and~~not torepurchased ~~decrease~~any ~~the~~shares ~~number~~ of its ~~authorized~~ common stock ~~from~~during ~~one billion five hundred million (1,500,000,000) shares (par value $0.0001) to two hundred fifty million (250,000,000) shares (par value $0.0001) without affecting~~ the ~~number~~fiscal ~~of issued and outstanding shares. The Company’s subsidiary changed its name from “Sonnen Corporation” to “Sonnen One, Inc.” The Company’s~~ year~~-end~~ isended June 30., 2011 or

Onas ~~November~~of ~~9, 2009,~~ the ~~Company~~date ~~formed~~of ~~a Scientific Advisory Board to support~~ the ~~Company~~filing ~~with its research, development, and commercialization efforts through advice, counsel, and direct participation utilizing the industry expertise and professional and academic backgrounds~~ of ~~its~~this ~~Scientific~~annual ~~Advisory Board members pursuant to a licensing agreement entered into on July 27, 2009~~report. ~~(Note 5)~~

~~Summary~~ITEM ~~of Significant Accounting Policies~~ 6.

~~Development~~SELECTED ~~Stage~~FINANCIAL Enterprise At June 30, 2010, the Company’s business operations had not developed, no revenues have been realized from planned operations and the Company is highly dependent upon funding and therefore is considered a development stage enterprise.DATA

~~Principles~~Not ~~of Consolidation~~applicable.

~~The~~ITEM ~~accompanying consolidated financial statements include the accounts of Sonnen Corporation and Sonnen One, Inc~~7.~~, its wholly-owned subsidiary. All material intercompany accounts and transactions between the Companies for the periods presented have been eliminated in consolidation.~~

~~Subsequent~~MANAGEMENT’S ~~Events~~DISCUSSION AND ANALYSIS OF FINANCIAL

InCONDITION ~~accordance~~AND ~~with~~RESULTS ~~Accounting~~OF ~~Standards Codification (ASC) topic 855 Subsequent Events, the Company currently evaluates subsequent events through the date the financial statements are available to be issued.~~OPERATION

~~Cash~~This ~~Equivalents~~Management’s Discussion and Analysis of Financial Condition and Results of Operations and other

Weparts ~~consider~~of ~~all~~this ~~highly~~current ~~liquid~~report ~~investments~~contain ~~with~~forward-looking ~~the~~statements ~~original~~that ~~maturities~~involve ofrisks ~~three~~and ~~months or less to be cash equivalents~~uncertainties.

FForward-8looking statements can also be identified by words such as “anticipates,” “expects,” “believes,”

~~SONNEN~~“plans,” ~~CORPORATION~~“predicts,” ~~AND~~and ~~SUBSIDIARY~~similar terms. Forward-looking statements are not guarantees of future

~~(Formerly~~performance ~~known~~and asour ~~Simple~~actual ~~Tech,~~results ~~Inc.)~~may differ significantly from the results discussed in the forward-

(Alooking ~~DEVELOPMENT~~statements. ~~STAGE~~Factors ~~ENTERPRISE)~~that might cause such differences include but are not limited to those

~~NOTES~~discussed TOin ~~CONSOLIDATED~~the ~~FINANCIAL~~subsection ~~STATEMENTS~~entitled Forward-Looking Statements and Factors That May Affect Future

~~For~~Results ~~the~~and ~~years~~Financial ~~ended~~Condition ~~June~~below. ~~30,~~The ~~2010~~following ~~and~~discussion ~~2009~~should be read in conjunction with our

~~NOTE~~financial 1statements –and ~~NATURE~~notes OFthereto ~~OPERATIONS,~~included ~~BASIS~~in OFthis ~~PRESENTATION~~current ~~AND~~report. ~~SUMMARY~~Our fiscal year end is June 30.

OFPlan ~~SIGNIFICANT~~of ~~ACCOUNTING POLICIES - continued~~Operation

~~SUMMARY~~Our OFplan ~~SIGNIFICANT~~of ~~ACCOUNTING~~operation ~~POLICIES~~over –the ~~continued~~next twelve months is to prosecute Sonnen’s civil complaint against PT

~~Income~~Group ~~Taxes~~and certain of the principals thereof and to consider alternative technologies for merger or

~~Income~~acquisition ~~taxes~~that ~~are~~might ~~provided~~create ~~for~~value ~~using the liability method of accounting. A deferred tax asset or liability is recorded~~ for ~~all~~its ~~temporary difference between financial and tax reporting~~shareholders. ~~Deferred~~Meanwhile, ~~tax~~we ~~expense~~have ~~(benefit)~~suspended ~~results~~our from the net change during the year of deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to more likely than not be realized in future tax returns. Tax law and rate changes are reflected in income in the period such changes are enacted.development

~~Earnings~~plan ~~(loss)~~for ~~Per~~the ~~Common~~technology ~~Share~~licensed from PT Group. While awaiting resolution of the uncertainties

~~The~~surrounding ~~Company~~the ~~computes~~licensing ~~net~~agreement, ~~loss~~Sonnen ~~per~~intends ~~share~~to ~~in accordance with FASB ASC 260-10~~identify,~~"Earnings~~ ~~per~~acquire ~~Share". FASB ASC 260 requires presentation of both basic~~ and ~~diluted~~develop earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. There have been no potentially dilutive common shares issued from inception. alternative

~~Reclassifications~~innovative technologies that it might advance to commercial applications. Management understands that

~~Certain~~new ~~amounts~~technologies inmust ~~the~~meet ~~2009~~several ~~financial~~critical ~~statements~~milestones ~~have~~in ~~been~~advance ~~reclassified~~of ~~to conform to the 2010 presentation~~commercialization. Milestones

~~Fair~~include ~~Value~~cost effectiveness, energy efficiencies, convenience of ~~Financial~~use ~~Instruments~~and practicability. Any products that

~~FASB~~we ~~ASC~~should ~~480-10,~~develop ~~disclosures~~will ~~about~~have ~~fair~~to ~~value of financial instruments, defines the fair value of a financial instrument as the amount at which the instrument could~~ be ~~exchanged~~able into aeffectively ~~current~~compete ~~transaction~~with ~~between willing parties. The carrying values of the Company~~today’s ~~financial~~accepted ~~instruments~~technologies ~~consist of cash and accounts payable at fair market value.~~by

~~Use~~optimizing oflow-cost ~~Estimates~~manufacturing inprocesses, ~~the~~ensuring ~~Preparation~~enhanced ofenergy ~~Financial~~efficiencies, ~~Statements~~and providing a

~~The~~reliable ~~preparation~~product ~~of financial statements in conformity~~ with ~~accounting principles generally accepted in~~ the ~~United~~flexibility ~~States of America requires management~~ to ~~make~~rely ~~estimates~~on ~~and~~alternative ~~assumptions~~fuel that affect the reported amounts of assets, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periodssources. ~~Actual results could differ from those estimates and assumptions.~~

~~F-9~~10

~~SONNEN~~Sonnen’s ~~CORPORATION~~business ~~AND~~development ~~SUBSIDIARY~~strategy is prone to significant risks and uncertainties which could have

~~(Formerly~~an ~~known~~immediate asimpact ~~Simple~~on ~~Tech,~~its ~~Inc.)~~efforts to generate a positive net cash flow and could deter the development of

(Aadvanced ~~DEVELOPMENT~~energy ~~STAGE~~enhanced ~~ENTERPRISE)~~technology. Historically, Sonnen has not generated sufficient cash flow to

~~NOTES~~sustain TOoperations ~~CONSOLIDATED~~and ~~FINANCIAL~~has ~~STATEMENTS~~had to rely on debt or equity financing to remain in business. Therefore, we

~~For~~cannot ~~the~~offer ~~years~~that ~~ended~~future ~~June~~expectations ~~30,~~that ~~2010~~any ~~and~~technology ~~2009~~Sonnen might develop will be commercially

~~NOTE~~developed 1or –that ~~NATURE~~it OFwill ~~OPERATIONS,~~be ~~BASIS~~sufficient OFto ~~PRESENTATION~~generate ~~AND~~the ~~SUMMARY~~revenue required for its operations. Should we be

OFunable ~~SIGNIFICANT~~to ~~ACCOUNTING~~generate ~~POLICIES~~cash -flow, ~~continued~~Sonnen may be forced to seek additional debt or equity financing as

~~SUMMARY~~alternatives OFto ~~SIGNIFICANT~~the ~~ACCOUNTING~~cessation ~~POLICIES~~of –operations. ~~continued~~The success of such measures can in no way be assured.

~~Foreign~~We ~~Currency~~have ~~Translation~~not generated any revenue since inception.

~~The~~Results ~~financial statements are presented in United States dollars. In accordance with Statement~~ of Financial Accounting Standards ASC Topic 820, “Foreign Currency Translation”, since the functional currency of the Company is U.S. dollars; the foreign currency financial statements of the Company’s subsidiaries are re-measured into U.S. dollars. Monetary assets and liabilities are re-measured using the foreign exchange rate that prevailed at the balance sheet date. Revenue and expenses are translated at weighted average rates of exchange during the year and stockholders’ equity accounts and furniture and equipment are translated by using historical exchange rates. Any re-measurement gain or loss incurred is reported in the income statement.Operations

~~NOTE~~During 2the –year ~~RECENTLY~~ended ~~ISSUED~~June ~~ACCOUNTING~~30, ~~STANDARDS~~2011, our operations were focused on maintaining our civil complaint

~~Below~~against isPaul aR. ~~listing~~Leonard ~~of the most recent accounting standards~~ and ~~their~~PT ~~effect~~Group on the Company. In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in ~~this~~connection ~~Update~~with ~~are~~breaches ~~effective as~~ of ~~the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have~~ a ~~material~~licensing ~~effect~~agreement on the financial position, results of operations or cash flows of the Company. In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-18 (ASU 2010-18), Receivables (Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool That Is Accounted for as a Single Asset-a consensus of the FASB Emerging Task Force. The amendments in this Update are effective for modifications of loans accounted for within pools under and

~~Subtopic~~considering ~~310-30~~alternative ~~occurring~~technologies infor ~~the~~merger ~~first interim~~ or ~~annual~~acquisition ~~period~~that ~~ending~~might oncreate orvalue after July 15, 2010. The amendments are to be applied prospectively. Early application is permitted. The Company does not expect the provisions of ASU 2010-18 to have a material effect on the financial position, results of operations or cash flows of the Company.for

In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entitySonnen’s ~~fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption~~shareholders. ~~The Company does not expect the provisions of ASU 2010-17 to have a material effect on the financial position, results of operations or cash flows of the Company.~~

~~F-10~~Net Losses

~~SONNEN~~For ~~CORPORATION~~the ~~AND~~period ~~SUBSIDIARY~~from inception (November 16, 2006) until June 30, 2011, Sonnen incurred net losses of

~~(Formerly~~$3,656,993. ~~known~~Net aslosses ~~Simple~~for ~~Tech~~the twelve months ended June 30, ~~Inc.)~~2011 were $1,206,315 as compared to net

(Alosses ~~DEVELOPMENT~~of ~~STAGE~~$2,380,655 ~~ENTERPRISE)~~for the twelve months ended June 30, 2010. The decrease in net losses over the

~~NOTES~~comparative TOannual ~~CONSOLIDATED~~periods ~~FINANCIAL~~can ~~STATEMENTS~~be primarily attributed to a decrease in general and administrative

~~For~~expenses in the ~~years~~twelve months ended June 30, ~~2010~~2011 and ~~2009~~the recognition of an impairment loss of

~~NOTE~~$672,000 2associated –with ~~RECENTLY~~the ~~ISSUED~~licensing ~~ACCOUNTING~~agreement ~~STANDARDS~~with –PT ~~continued~~Group in the twelve months ended June 30,

~~In April~~ 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-16 (ASU 2010-16), Entertainment-Casinos (Topic 924): Accruals for Casino Jackpot Liabilities-a consensus of the FASB Emerging Issues Task. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. The amendments should be applied by recording a cumulative-effect adjustment to opening retained earnings in the period of adoption. The Company does not expect the provisions of ASU 2010-16 to have a material effect on the financial position, results of operations or cash flows of the Company.

InWe ~~April~~expect ~~2010,~~to ~~the~~continue ~~FASB~~to ~~(Financial~~realize ~~Accounting~~nets ~~Standards~~losses ~~Board)~~as ~~issued~~general ~~Accounting~~and ~~Standards~~administrative ~~Update~~expenses ~~2010-15~~accrue ~~(ASU 2010-15), Financial Services-Insurance (Topic 944): How Investments held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments-a consensus of the~~ and

~~FASB~~management ~~Emerging~~considers ~~Issues~~alternative ~~Task~~technologies Force. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. Early adoption is permitted. The amendments in this Update should be applied retrospectively to ~~all~~succeed ~~prior~~that periods upon the date of adoption. The Company does not expect the provisions of ASU 2010-15 to have a material effect on the financial position, results of operations or cash flows of the Company. In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-14 (ASU 2010-14), Accounting for Extractive Activities – Oil & Gas - Amendments to Paragraph 932-10-S99-1 (SEC Update). The Amendments are designed to modernize and update the oil and gas disclosure requirements to align them with current practices and changes in technology. ~~The~~subject ~~Company does not expect the provisions of ASU 2010-14~~ to ~~have a material effect on the financial position, results of operations or cash flows of the Company~~litigation.

InOperating April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-13 (ASU 2010-13), Compensation-Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades - a consensus of the FASB Emerging Issues Task Force. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Earlier application is permitted. The Company does not expect the provisions of Expenses

~~ASU~~For ~~2010-13~~the toperiod ~~have~~from ainception ~~material~~until ~~effect~~June on30, ~~the financial position~~2011, ~~results~~Sonnen ofincurred ~~operations~~operating orexpenses ~~cash flows~~ of ~~the Company~~$3,001,311.

InOperating ~~April~~expenses ~~2010,~~for the ~~FASB~~twelve ~~(Financial~~months ~~Accounting~~ended ~~Standards~~June ~~Board)~~30, ~~issued~~2011 ~~Accounting~~were ~~Standards Update 2010-12 (ASU 2010-12)~~$1,180,932 ~~Income~~as ~~Taxes~~compared ~~(Topic 740): Accounting for Certain Tax Effects of the 2010~~ to

~~Health Care Reform Acts. After consultation with the FASB~~$1,750,516 ~~the SEC stated that it “would not object to a registrant incorporating the effects of the Health Care and Education Reconciliation Act of 2010 when accounting~~ for the ~~Patient~~twelve ~~Protection~~months ~~and~~ended ~~Affordable~~June ~~Care~~30, ~~Act”~~2010. The ~~Company~~decrease ~~does~~in ~~not~~operating ~~expect~~expenses ~~the~~over ~~provisions of ASU 2010-12 to have a material effect on~~ the ~~financial position, results of operations or cash flows of the Company.~~

~~F-11~~comparative periods can be primarily attributed to a decrease in general and administrative expenses to

~~SONNEN~~$7,940 ~~CORPORATION~~for ~~AND~~the ~~SUBSIDIARY~~twelve months ended June 30, 2011 from $83,155 for the twelve months ended June 30,

~~(Formerly~~2010, ~~known~~a asdecrease ~~Simple~~in ~~Tech~~professional fees to $102,508 ~~Inc.)~~for the twelve months ended June 30, 2011 from

(A$188,243 ~~DEVELOPMENT~~for ~~STAGE~~the ~~ENTERPRISE)~~twelve months ended June 30, 2010, a decrease in consulting fees to $0 for the twelve

~~NOTES~~months TOended ~~CONSOLIDATED~~June ~~FINANCIAL~~30, ~~STATEMENTS~~2011 from $280,727 for the twelve months ended June 30, 2010 and a decrease in

~~For~~research and development costs to $107 for the ~~years~~twelve months ended June 30, ~~2010~~2011 ~~and~~from ~~2009~~$167,560 for

~~NOTE~~the 2twelve –months ~~RECENTLY~~ended ~~ISSUED~~June ~~ACCOUNTING~~30, ~~STANDARDS~~2010, –offset ~~continued~~by an increase in compensation and related taxes or

Inbenefits ~~March~~of ~~2010~~$860,504 the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for ~~each reporting entity at~~ the ~~beginning~~twelve ofmonths ~~its~~ended ~~first fiscal quarter beginning after~~ June 1530, ~~2010. Early~~2011 ~~adoption~~from is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position$735,287 ~~results~~for ~~of operations or cash flows of~~ the ~~Company. In~~twelve February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements. This amendment addresses both the interaction of the requirements of months

~~this~~ended Topic with the SEC’s reporting requirements and the intended breadth of the reissuance disclosure provision related to subsequent events (paragraph 855-10-50-4). All of the amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 1530, 2010. ~~The Company does not expect the provisions of ASU 2010-09 to have a material effect on the financial position, results of operations or cash flows of the Company.~~

~~NOTE~~We 3expect –that ~~GOING~~operating ~~CONCERN~~expenses will continue to decrease as Sonnen’s operations slow in response to

~~Our~~ongoing ~~financial~~litigation ~~statements~~with ~~have~~PT ~~been~~Group ~~presented on the basis that we are a going concern, which contemplates the realization of assets~~ and the ~~satisfaction~~suspension of ~~liabilities~~our inresearch ~~the normal course of business. We have sustained operating losses in 2010~~ and ~~2009.~~development operations.

As of June 30, 2010 we have a working capital deficit of $462,243, stockholders’ deficit of $462,817 and accumulated deficit of $2,450,678. During 2010 we had a net loss of $2,380,655 and cash used in operating activities of $742,388. The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plan is to aggressively pursue its present business plan. Since inception we have funded our operations through the issuance of common stock and related party loans and advances, and will seek additional debt or equity financing as required. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.11

~~F-12~~Income Tax Expense (Benefit)

~~SONNEN~~Sonnen ~~CORPORATION~~may ~~AND~~have ~~SUBSIDIARY~~a prospective income tax benefit resulting from a net operating loss carry-forward and

~~(Formerly~~start ~~known~~up ascosts ~~Simple~~that ~~Tech,~~will ~~Inc~~offset any future operating profit.)

(ACapital ~~DEVELOPMENT STAGE ENTERPRISE)~~Expenditures

~~NOTES~~Sonnen TOhas ~~CONSOLIDATED~~not ~~FINANCIAL~~spent ~~STATEMENTS~~any significant amounts on capital expenditures for the period from inception to

~~For the years ended~~ June 30, ~~2010~~2011 and ~~2009~~does not expect to do so in the near future.

~~NOTE~~Liquidity 4and -Capital ~~PROPERTY AND EQUIPMENT~~Resources

~~Property~~Sonnen ~~and~~has ~~equipment~~been ~~consists~~in of the ~~following~~development atstage ~~June~~since 30inception, ~~2010:~~and has experienced significant changes in

Computer equipment and software	$	1,853
Less: Accumulated depreciation		(426)
Total property and equipment, net	$	1,427

liquidity, capital resources, and stockholders’ equity.

InSonnen’s ~~the~~had ~~period~~current ~~ended~~assets ~~December~~of 31$1,258 ~~2009,~~consisting ~~the~~of ~~Company~~cash ~~purchased two laptop computers~~ and aprepaid ~~scanner for our offices that will be depreciated over three years on a straight line basis. Depreciation expense for the years ended June 30~~expenses, ~~20 10~~ and ~~2009,~~total ~~was~~assets ~~$426~~of ~~and~~ $~~-0-~~1, ~~respectively.~~258

~~NOTE~~as 5of –June ~~PREPAID~~30, ~~EXPENSES~~2011.

~~Prepaid~~Sonnen ~~expenses~~had ~~comprise~~current and total liabilities of ~~the~~$809,887, ~~following~~consisting atof ~~June~~accounts 30payable, ~~2010:~~accounts payable to

Hall, Lamb and Hall	Prepayment retainer for legal fees	$	4,875
W.L. MacDonald Corp.	Prepayment retainer for legal fees		2,358*
Haynes and Boone, LLP	Prepayment retainer for legal fees		1,099
	Total	$	8,332

related parties, accrued payroll, notes payable to related parties, notes payable and loans from a

*Refundedshareholder ~~subsequent~~as toof ~~year~~June ~~end~~30, 2011.

~~There~~Sonnen ~~were~~had noa ~~prepayment~~stockholders’ ~~balances~~deficit asof $808,629 and a working capital deficit of ~~year-end~~$808,629 at June 30, ~~2009.~~

~~NOTE 6 – LICENSING AGREEMENT~~ 2011.

~~The~~For ~~Company entered into a licensing agreement (~~the ~~“Agreement”)~~period ~~with~~from PTinception ~~Group,~~until ~~Limited~~June ~~(“PT Group”)~~30, ~~an unrelated entity~~2011, ~~on July 27, 2009, that grants the Company an exclusive, non-transferable license to use PT Group~~Sonnen’s ~~intellectual~~net ~~property~~cash ~~of a certain technology and licensed products to be~~ used in ~~achieving~~development ~~the~~stage Company’s business objectives. The terms of the agreement would have continued until the expiry of protections afforded for the intellectual property, provided that the Company was not in breach or default of any of the terms or conditions contained in the Agreement. During the term of the licensing agreement, PT Group retained sole and beneficial propriety of the intellectual property including any improvements made to any licensed products or future products, regardless of the source.activities

~~In exchange for use of the license, the PT Group~~ was ~~issued common shares equal to 5% of the issued and outstanding common shares, 3,360,000 shares of the Company at a value of~~ $0843,709.20 Net ~~per~~cash ~~share~~used ~~on the execution date, which was estimated to be $672,000, additionally, upon the Company cumulatively raising $50 million~~ in ~~equity~~development ~~financing,~~stage ~~the~~activities ~~Company~~for ~~had guaranteed that PT Group would own no less than 2.5% of~~ the ~~issued~~twelve ~~and~~month ~~outstanding~~period ~~shares~~ending ofJune ~~its common shares.~~30,

~~F-13~~2011 was $40,781 as compared to $742,388 for the twelve months ended June 30, 2010. Net cash used in

~~SONNEN~~development ~~CORPORATION~~stage ~~AND~~activities ~~SUBSIDIARY~~in the current twelve month period can be attributed primarily to a number of

~~(Formerly~~items ~~known~~that asare ~~Simple~~book ~~Tech,~~expense ~~Inc.)~~items which do not affect the total amount relative to actual cash used

(Aincluding ~~DEVELOPMENT~~depreciation, ~~STAGE~~stock ~~ENTERPRISE)~~option expenses and loss on disposal of assets. Actual cash items used in the

~~NOTES~~current TOtwelve ~~CONSOLIDATED~~month ~~FINANCIAL~~period, ~~STATEMENTS~~that are not income statement related items, include pre-paid expenses,

~~For~~accounts ~~the~~payable, ~~years~~accounts ~~ended~~payable ~~June~~to 30related parties, ~~2010~~accrued liabilities, and ~~2009~~accrued interest. We expect

~~NOTE~~to 6continue –to ~~LICENSING~~generate ~~AGREEMENT~~negative ~~-continued~~cash flow in development stage activities.

~~Breach~~For ofthe ~~Contract~~period ~~Claim~~from inception until June 30, 2011 Sonnen’s net cash used in investing activities was

~~On February 6~~$1,853. ~~2010,~~Net PTcash ~~Group~~used ~~notified~~in ~~the~~investing ~~Company of a purported breach of contract terms, including a breach of confidentiality, insufficient funding for research and development~~ activities, ~~and a failure to provide direct access to our patent attorneys. The license agreement allows~~ for ~~a ninety day period in which to cure purported breaches. During~~ the ~~quarter~~twelve months ended ~~March~~June 3130, ~~2010~~2011, ~~the Company learned that PT Group~~ was not the rightful owner of the license and had no rights to grant the license to the Company. Since PT Group did not remedy the breach in accordance with the Agreement, the Company filed a legal complaint and impaired the entire $~~672,000~~0 ~~book value of the Agreement. (Note 10)~~as

~~NOTE~~compared 7to –$1,853 ~~INCOME~~for ~~TAXES~~the twelve months ended June 30, 2010. Net cash used in investing activities in

~~The net operating loss carryforward and permanent differences are~~ the ~~components~~prior oftwelve ~~deferred~~month ~~tax~~period ~~assets~~can ~~for~~be ~~income~~attributed ~~tax purposes as of June 30, 2010, of approximately $1,126,803 which was reduced~~ to ~~zero after considering~~ the ~~valuation~~purchase ~~allowance~~ of ~~$1,126,803,~~property ~~since~~and ~~there~~equipment. isWe noexpect ~~assurance of future taxable income.~~ to

~~The~~continue ~~net~~to ~~operating~~generate ~~loss~~negative ~~carryforward~~cash asflow ofin ~~June~~investing ~~30, 2010 expires as follows:~~ activities.

Expiring Year	Amount
2027	$ 6,039
2028	48,195
2029	14,245
2030	1,058,324
Total	$ 1,126,803

For the period from inception until June 30, 2011, Sonnen’s net cash provided by financing activities was

~~These~~$845,721. ~~loss~~Net ~~carryovers~~cash ~~could~~provided beby ~~limited~~financing ~~under~~activities for the ~~Internal~~twelve ~~Revenue~~months ~~Code~~ended ~~should~~June a30, ~~significant~~2011 ~~change in ownership occur.~~was

~~The~~$40,100 ~~following~~as iscompared anto ~~analysis~~$736,081 offor ~~deferred~~the ~~tax~~twelve ~~assets~~months asended of June 30, 2010:. Net cash flow provided by

~~Deferred Valuation~~financing activities in the current period is attributable to proceeds from notes payable to related and non-

~~Tax~~related ~~Assets Allowance Balance~~parties offset by repayments on notes payable to a related party. We expect to continue to generate

~~Deferred~~positive ~~tax~~cash ~~assets~~flow atfrom ~~June~~financing ~~30,~~activities ~~2009~~as $Sonnen ~~23,283~~seeks $new ~~(23,283)~~rounds $of ~~-0-~~financing to finance litigation

~~Additions~~costs, ~~for~~regulatory ~~the~~compliance ~~year 359,830 (359,830) -0-~~ and daily operations.

~~Deferred tax assets at June 30, 2010 $ 383,113 $ (383,113) $ -0-~~12

~~F-14~~Our current assets are insufficient to meet our current obligations or to satisfy our cash needs over the

~~SONNEN~~next ~~CORPORATION~~twelve ~~AND~~months ~~SUBSIDIARY~~and as such Sonnen will require additional debt or equity financing. We had no

~~(Formerly~~commitments ~~known~~or asarrangements ~~Simple~~for ~~Tech~~financing at June 30, ~~Inc.)~~2011 though we are pursuing a number of

(Aprospective ~~DEVELOPMENT~~sources ~~STAGE~~that ~~ENTERPRISE)~~include shareholder loans, the sale of equity, the procurement of long term debt

~~NOTES~~or TOthe ~~CONSOLIDATED~~settlement ~~FINANCIAL~~of ~~STATEMENTS~~additional debt for equity. We face certain financial obstacles to attracting new

~~For~~financing ~~the~~due ~~years~~to ~~ended~~our ~~June~~historical ~~30,~~and ~~2010~~current record of net losses and ~~2009~~working capital deficits. Therefore,

~~NOTE~~despite 7our –efforts ~~INCOME~~we ~~TAXES~~can -provide ~~continued~~no assurance that we will be able to obtain the financing required to

~~The~~meet ~~following~~our isstated ~~reconciliation~~objectives ~~from~~or ~~the~~even ~~expected statutory federal income tax rate~~ to ~~the~~continue ~~Company’s~~as ~~actual~~a ~~income~~going ~~tax rate for the years ended June 30:~~concern.

~~2010 2009~~ Sonnen does not expect to pay cash dividends in the foreseeable future.

~~Expected~~Sonnen ~~income~~has ~~tax~~a ~~(benefit)~~defined atstock ~~Federal~~option ~~statutory~~plan ~~tax~~and ~~rate~~contractual ~~-34%~~commitments $with ~~(809,423)~~all $of (its ~~4,843)~~officers ~~Permanent~~and ~~differences 449,592 -0- Valuation allowance 359,830 4,843 ________~~ directors. ~~Income tax expense $ - 0 - . $ - 0 -~~

WeSonnen ~~currently~~has ~~have~~no ~~three~~current ~~years~~plans offor ~~tax~~any ~~returns~~significant ~~that~~purchase ~~are~~or ~~subject~~sale ~~to examination, based on their filing dates by taxing authorities. We currently have no uncertainty~~ of ~~the tax positions that we have taken and believe that we can defend them to~~ any ~~tax~~plant ~~jurisdiction~~or equipment.

~~NOTE~~Sonnen 8has –no ~~NOTES~~current ~~PAYABLE~~plans to make any changes in the number of employees.

OnOff ~~January~~Balance 5,Sheet 2010, the Company received an advance on an interest bearing promissory note of $100,000 from an unrelated entity. The note is due and payable on January 11, 2011, and bears an interest rate of 8% per annum. Interest of $3,911 for the year ended June 30, 2010 has been accrued.Arrangements

OnAs ~~February 17, 2010, the Company received an advance on an interest bearing promissory note~~ of $93,660 in cash and a payment made on behalf of the Company of $5,000 for a total of $98,660 from an unrelated entity. The note is due and payable on February 17, 2011, and bears an interest rate of 8% per annum. Interest of $2,916 for the year ended June 30, 2010 has been accrued. On May 6, 2010, the Company received another advance on an interest bearing promissory note of $35,000 in cash and a payment made on behalf of the Company of $5,000 for a total of $40,000 from the same unrelated entity. The note is due and payable on May 6, 2011, ~~and~~Sonnen ~~bears~~had anno ~~interest~~off-balance ~~rate~~sheet ofarrangements 8%that ~~per~~have ~~annum.~~or ~~Interest~~are ofreasonably ~~$489~~likely ~~for the year ended June 30, 2010 has been accrued.~~to

Onhave August 29, 2009, the Company received an advance on an interest bearing promissory note of $10,000 from an unrelated third party. The note was due and payable on February 28, 2010, and bears an interest rate of 1% per month. On November 17, 2009, we made a ~~principal~~current ~~payment~~or offuture ~~$5,000.~~effect ~~On March 1, 2010, the Company executed a new note for $5,000 to the same unrelated third party. The new note is due and payable~~ on ~~March~~our 1,financial ~~2011~~condition, ~~and~~changes ~~bears~~in anfinancial ~~interest rate of 8% per annum. Interest of $700 for the year ended June 30~~condition, ~~2010~~revenues ~~has been accrued.~~ or

~~F-15~~expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to

~~SONNEN CORPORATION AND SUBSIDIARY~~stockholders.

~~(Formerly~~Going ~~known as Simple Tech, Inc.)~~Concern

(ASonnen’s ~~DEVELOPMENT~~auditors ~~STAGE~~have ~~ENTERPRISE)~~expressed an opinion as to its ability to continue as a going concern as a result of

~~NOTES~~continuing TOnet ~~CONSOLIDATED~~operating ~~FINANCIAL~~losses. ~~STATEMENTS~~Our ability to continue as a going concern is dependent on realizing

~~For~~funding ~~the~~from ~~years~~inside ~~ended~~or ~~June~~outside ~~30,~~sources. ~~2010~~Management’s ~~and~~plan ~~2009~~to address Sonnen’s ability to continue as a

~~NOTE~~going 8concern –includes: ~~NOTES~~(i) ~~PAYABLE~~obtaining -funding ~~continued~~from the private placement of debt or equity; and (ii)

Onconverting ~~June~~debt ~~10,~~to ~~2010, the Company received an advance on an interest bearing promissory note of $5,983 for a payment made on behalf of the Company from an unrelated entity~~equity. ~~The~~Management ~~note~~believes isthat ~~due~~it ~~and~~will ~~payable~~be onable ~~June~~to ~~10,~~obtain ~~2011,~~funding ~~and~~to ~~bears~~enable anSonnen interest rate of 8% per annum. Interest of $27 for the year ended June 30, 2010 has been accrued. On June 18, 2010, the Company received another advance on an interest bearing promissory note of $10,000 in cash from the same unrelated entity. The note is due and payable on June 18, 2011, and bears an interest rate of 8% per annum. Interest of $27 for the year ended June 30, 2010 has been accrued. On June 30, 2010, the Company received an advance on an interest bearing promissory note of $5,300 for a payment made on behalf of the Company from the same unrelated entity. The note is due and payable on June 30, 2011, and bears an interest rate of 8% per annum. Interest of $-0- for the year ended June 30, 2010 has been accrued.to

~~Note~~remain 9a –going ~~Restatement~~concern ofthrough ~~Financial~~the ~~Statements~~methods discussed above, though there can be no assurances that

~~The~~such ~~Company’s~~methods ~~financial~~will ~~statements~~prove ~~for the year ended June 30, 2009 have been restated to reflect the correction of an error relating to accounts payable and accrued liabilities~~successful. The consolidated balance sheet has been restated to reflect the increase in accounts payable and accrued liabilities as of June 30, 2009 of $9,077, which includes $4,627 from the year ended June 30, 2008. The consolidated statement of operations has been restated to reflect an increase in losses. As a result, deficit accumulated during the development stage has been increased by $9,077 for the effects of the restatement for the year ended June 30, 2009, which includes $4,627 from the year ended June 30, 2008. The interim financial statements for the fiscal year ended June 30, 2010 reflect all prior period adjustments, however the financial statements for the year ended June 30, 2009 were not previously presented in total as restated and are included herein as “restated”.

~~The~~Forward ~~effect~~Looking ofStatements ~~this~~and ~~restatement~~Factors isThat asMay ~~follows:~~Affect Future Results and Financial Condition

~~For~~The statements contained in the ~~Year~~section ~~Ended~~titled “Results of Operations” and “Description of Business”,

~~June~~with 30the exception of historical facts, ~~2009~~are forward looking statements. A safe-harbor provision is not

Asapplicable ~~Previously As~~ to the forward looking statements made in this current report. Forward looking statements

~~Reported Restated~~reflect our current expectations and beliefs regarding our future results of operations, performance, and

~~Income~~achievements. ~~(loss)~~These ~~from~~statements ~~operations $ (9,820) $ (14,270)~~ are subject to risks and uncertainties and are based upon assumptions and

~~Net~~beliefs ~~comprehensive~~that ~~income~~may ~~(loss) $ (9~~or may not materialize. These statements include,~~795) $ (14~~ but are not limited to,~~245)~~ statements

~~Net Income (Loss) per share~~ concerning:

- our ~~basic~~anticipated ~~and~~financial ~~diluted a a~~ performance;

a uncertainties =related ~~Less~~to ~~than~~the ~~($0.01)~~research ~~per~~and ~~share~~development of the licensed technology;

~~F-16~~ our ability to generate revenues through sales to fund future operations;

~~SONNEN~~ our ~~CORPORATION~~ability ~~AND~~to ~~SUBSIDIARY~~raise additional capital to fund cash requirements for future operations;

~~(Formerly~~ the ~~known~~volatility asof ~~Simple~~the ~~Tech,~~stock ~~Inc.)~~market; and

(A general ~~DEVELOPMENT~~economic ~~STAGE ENTERPRISE)~~conditions.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~13

~~For~~We ~~the~~wish ~~years~~to ~~ended~~caution ~~June~~readers ~~30,~~that ~~2010~~our operating results are subject to various risks and ~~2009~~uncertainties that

~~NOTE~~could 10cause –our ~~STOCKHOLDERS'~~actual ~~EQUITY~~ results to differ materially from those discussed or anticipated. We also wish to

~~Common~~advise ~~Shares~~readers –not ~~Authorized~~to place any undue reliance on the forward looking statements contained in this report,

~~The~~which ~~Company~~reflect ~~has~~our ~~250,000,000~~beliefs ~~common shares authorized at a par value of $0.0001 per share~~ and ~~50,000,000~~expectations ~~shares~~only ofas preferred stock, par value $0.0001 per share. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of ~~more than 50% of~~ the ~~common~~date ~~stock could, if they choose to do so, elect all the directors~~ of ~~the~~this ~~Company~~report. AsWe ofassume ~~June 30, 2010, there are~~ no ~~classes~~obligation ~~of preferred stock designated and none are outstanding. As of June 30, 2010 and 2009, there are 67,893,000 and 63,808,000 shares issued and outstanding, respectively.~~to

~~Common~~update ~~Stock~~or ~~Issuances~~revise ~~and~~these ~~Warrant~~forward ~~Granted~~looking statements to reflect new events or circumstances or any changes

Inin ~~the~~our ~~year~~beliefs ~~ended~~or ~~June 30~~expectations, ~~2009,~~other ~~there~~that ~~were~~is norequired ~~share~~by ~~issuances~~law.

OnRecent ~~April~~Accounting 23, 2009, the Company effected a 10-to-1 forward split of its 6,380,800 issued and outstanding common shares, resulting in 63,808,000 common shares on a post split basis. All shares and per share amounts have been retroactively restated to reflect the 10-for-1 forward stock split.Pronouncements

OnPlease ~~July~~see ~~27,~~Note ~~2009,~~2 ~~the~~to ~~Company~~our ~~authorized~~financial ~~the~~statements ~~issuance of 3,360,000 shares of the Company’s common stock valued at a price of $0.20 per share~~ for anrecent ~~aggregate~~accounting ~~consideration of $672,000 to P~~pronouncements.~~T. Group in connection with the licensing agreement between the Company, its wholly owned subsidiary, and P.T. Group (see Note 5).~~

OnITEM ~~September 30, 2009, the Company authorized the issuance of 625,000 shares of the Company’s common stock to two entities at $0~~7A.80 per share for an aggregate consideration of $500,000. No commission was paid in connection with the issuance. Attached to the shares were warrants to purchase 312,500 shares of common stock at an exercise price of $1.20 per share to the above two entities. These warrants fully vested on the date of grant. The warrants may be exercised in cash or by certifies check, bank draft or money order and expire on September 30, 2011.

~~These~~QUANTITATIVE ~~warrants~~AND ~~have~~QUALITATIVE ~~been~~DISCLOSURES ~~valued~~ABOUT at $325,524 using the Black-Scholes model, as of September 30, 2009. The assumptions used in this valuation included: (a) risk-free interest rate of 0.95% per annum, (b) expected term of 720 days, (c) volatility 188% and (d) last trade price of $1.26. As of June 30, 2010, none of these warrants had been exercised and the value is reported in stockholders’ equity in the accompanying consolidated balance sheet.MARKET

On January 18, 2010, the Company entered into a five month consulting agreement for investment and financial services that calls for the consultant to be issued 100,000 shares of common stock valued at $101,000 as a signing fee. Additional payments will be negotiated as needed, and the agreement extends through May 18, 2010. As of June 30, 2010, this agreement was not renewed and we owe no further amounts.RISK

~~F-17~~Not required.

~~SONNEN~~ITEM ~~CORPORATION AND SUBSIDIARY~~8.

~~(Formerly~~FINANCIAL ~~known~~STATEMENTS asAND ~~Simple~~SUPPLEMENTARY ~~Tech, Inc.)~~DATA

(AOur ~~DEVELOPMENT~~audited ~~STAGE~~consolidated ~~ENTERPRISE)~~financial statements for the years ended June 30, 2011 and 2010 are attached

~~NOTES~~hereto TOas ~~CONSOLIDATED~~F-1 ~~FINANCIAL~~through ~~STATEMENTS~~F-24.

~~For the years ended June 30, 2010 and 2009~~14

~~NOTE~~SONNEN ~~11 – STOCK – BASED COMPENSATION~~CORPORATION

~~On August 31, 2009, the Company adopted the Company’s 2009, Stock Option Plan~~ (~~the~~A ~~“Plan”)~~Development inStage ~~an effort to promote the interests of the~~ Company ~~by providing eligible persons and companies with the opportunity to acquire or increase a proprietary interest in the Company through the grant of up to five million (5,000,000~~) non-statutory stock options (the “Options”) as an incentive for the eligible persons to continue their employment or service. On August 31, 2009, the Company authorized the grant of an aggregate of one million eight hundred thousand (1,800,000) Options with an exercise price of $1.00 per share pursuant to the Plan. This block of Options vest over a three year period through August 31, 2013, in equal increments of one-third of potentially exercisable Options each year or in full if involuntarily terminated.

OnJune ~~November 9~~30, ~~2009,~~2011 ~~the~~and ~~Company~~June ~~authorized the grant of an additional one hundred thousand (100~~30,~~000)~~ ~~Options with an exercise price of $1.25 per share pursuant to the Plan. This block of Options vest over a two year period through November 9,~~ 2010~~, in equal increments of one-half of potentially exercisable options each year or in full if involuntarily terminated.~~

On January 1, 2010, the Company authorized the grant of an additional one hundred thousand (100,000) Options with an exercise price of $1.25 per share pursuant to the Plan. This block of Options vest over a INDEX

three year period through January 1, 2010, in equal increments of 33.33% immediately upon signing of the agreement, and 33.33% will vest on the anniversary date of January 1, 2011, and the remaining 33.34% on the anniversary date of January 1, 2012, or in full if involuntarily terminated. Page

~~The~~Report ~~value~~ of ~~employee~~Independent ~~and~~Registered ~~non-employee~~Public ~~stock~~Accounting ~~Options granted since the Plan’s inception in August 2009 is estimated in blocks using the Black-Scholes model at the grant date, with the following assumptions:~~ Firm

	Aug. 31, 2009	Nov. 9, 2009	Jan. 1, 2010
Volatility	188.00%	188.00%	188.00%
Expected dividends	$ 0.00	$ 0.00	$ 0.00
Expected term in years	10	10	10
Risk-free rate	3.40%	3.49%	3.84%

F-2

~~The~~Report ~~risk-free~~of ~~interest~~Independent ~~rate~~Registered ~~assumption~~Public isAccounting ~~based upon U.S. Treasury Bond interest rates appropriate~~ Firm

~~for the terms of the Company’s granted Options. The dividend yield assumption is based on the Company’s history and expectation of dividend payments.~~F-3

~~F-18~~Consolidated Balance Sheets

~~SONNEN CORPORATION AND SUBSIDIARY~~F-4

~~(Formerly~~Consolidated ~~known~~Statements asof ~~Simple Tech, Inc.)~~Operations

~~(A DEVELOPMENT STAGE ENTERPRISE)~~F-5

~~NOTES~~Consolidated TOStatement ~~CONSOLIDATED~~of ~~FINANCIAL~~Stockholders’ ~~STATEMENTS~~Equity (Deficit)

~~For the years ended June 30, 2010 and 2009~~F-6

~~NOTE~~Consolidated 11Statements –of ~~STOCK~~Cash ~~– BASED COMPENSATION- continued~~Flows

~~A summary of the Options granted to employees and others under the Plan and changes since inception of the Plan is presented below:~~F-7

	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value
Balance at July 1, 2009	-	$	-	$	-
Options Granted	2,000,000		1.03		2,038,908
Options Exercised	-		1.00		-
Options Forfeited or Expired	-		1.00		-
Balance at June 30, 2010	2,000,000	$	1.03	$	2,038,908
Exercisable at June 30, 2010	150,000	$	1.07	$	162,571
Weighted average fair value of Options granted through June 30, 2010		$	1.02

Notes to Consolidated Financial Statements

~~The following table summarizes information about stock Options under the Plan that were outstanding at June 30, 2010:~~F-8

Outstanding Options								Options Exercisable
	Exercise Price	Number Outstanding at June 30, 2010	Weighted Average Remaining Contractual Life in Years		Weighted Average Exercise Price		Intrinsic Value	Number Exercisable at June 30, 2010		Weighted Average Exercise Price		Aggregate Intrinsic Value
$	1.00	1,800,000	10.00	$	1.00	$	1,813,493	-	$	-	$	-
$	1.25	200,000	10.00	$	1.25	$	225,416	150,000	$	1.08	$	162,571
		2,000,000	10.00	$	1.03	$	2,038,909	150,000	$	1.08	$	162,571

F-1

~~The~~REPORT ~~total~~OF ~~value~~INDEPENDENT ofREGISTERED ~~employee~~PUBLIC ~~and~~ACCOUNTING ~~non-employee stock Options granted during the year ended June 30, 2010 was $2,038,909.~~FIRM

~~During~~To the ~~year~~Board ~~ended~~of ~~June~~Directors ~~30, 2010, the Company recorded $645,321 in stock-based compensation which is included in salaries, payroll taxes,~~ and ~~expenses on the statements of operations.~~

AtStockholders ~~June 30, 2010 there was $1,393,588~~ of ~~total~~Sonnen ~~unrecognized compensation cost related to stock options granted under the Plan. That cost is expected to be recognized pro-rata according to the vesting schedules through January 1, 2012.~~Corporation

~~F-19~~We have audited the accompanying consolidated balance sheet of Sonnen Corporation and Subsidiary as

~~SONNEN CORPORATION AND SUBSIDIARY~~of June 30, 2011 and the related statements of operations, stockholders’ equity, and cash flows for the

year ended June 30, 2011 and for the period from November 16, 2006 (~~Formerly known as Simple Tech~~inception) to June 30, ~~Inc~~ 2011.)

~~(A DEVELOPMENT STAGE ENTERPRISE)~~Sonnen Corporation’s management is responsible for these financial statements. Our responsibility is to

~~NOTES~~express TOan ~~CONSOLIDATED~~opinion ~~FINANCIAL~~on ~~STATEMENTS~~these financial statements based on our audit.

~~For~~ We conducted our audit in accordance with the ~~years ended June 30, 2010 and 2009~~ standards of the Public Company Accounting Oversight

~~NOTE 12 – RELATED PARTY TRANSACTIONS~~Board (United States). Those standards require that we plan and perform the audit to obtain reasonable

~~Finder’s Fee Agreement~~assurance about whether the financial statements are free of material misstatement. The company is not

~~During~~required ~~the~~to ~~quarter ended March 31~~have, ~~2010,~~nor ~~the~~were ~~Company~~we ~~received~~engaged an advance from a related party of $30,000 in cash, and a $16,079 payment made on behalf of the Company, for a total of $46,079. During the quarter ended, March 31, 2010, the Company repaid $6,079, and offset the remaining $40,000 to ~~a $50~~perform,~~000~~ ~~receivable from the same party related to a finders’ fee for~~ an ~~introduction~~audit ~~earned by the Company. The net receivable~~ of ~~$10,000~~its ~~was~~internal ~~paid~~control inover ~~cash~~financial ~~and there is no receivable balance as of June 30, 2010~~reporting.

~~Related~~Our audit included ~~party~~consideration ~~advance~~of internal control over financial reporting as a basis for designing audit

~~On April 29~~procedures that are appropriate in the circumstances, ~~2010,~~ but not for the ~~Company received~~ purpose of expressing an ~~advance~~ opinion on ~~an interest bearing promissory note of $8,500 from a related entity. The note is due and payable on demand and bears no interest.~~

~~Consulting Agreements~~the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no

~~On October 1, 2009, the Company entered into a consulting agreement with Prosper Financial, Inc~~such opinion. An audit also includes examining, on a ~~company owned by the spouse of the Company’s President and Chief Executive Officer and 37% owner of the Company. The agreement calls for monthly payments of $2~~ test basis,~~500 for consulting services rendered and $1,200 per month in rental payments for~~ evidence supporting the ~~use of Prosper Financial, Inc.’s office space. The agreement extends through October 31, 2010. As of June 30, 2010, this related party had a balance due of $2,500,~~ amounts and ~~is reflected in accounts payable – related parties.~~

~~On August 1~~disclosures in the financial statements, ~~2009,~~ assessing the ~~Company entered into a consulting agreement with a director~~ accounting principles used and officer that calls for monthly compensation of $7,500 and extended through December 31, 2009. As of June 30, 2010, this related party had a balance due of $17,206, which is reflected in accounts payable – related parties. significant estimates

made by ~~On July 1~~management, ~~2009,~~ as well as evaluating the ~~Company entered into a consulting agreement with a shareholder, director and officer of the Company that calls for an annual base fee of $96,000 and extends through June 30, 2010~~ overall financial statement presentation. As of June 30, 20 10, this related party had a total balance due of $60,584, comprised of $49,350 due for consulting fees, and $11,234 for business expenses, all of which is reflected in accounts payable – related parties. We believe that

Onour ~~October~~audit 1,provides ~~2009, the Company entered into~~ a ~~consulting~~reasonable ~~agreement~~basis ~~with the Head of Research that calls~~ for ~~monthly~~our ~~compensation of $6,000 and extends through December 31, 2009~~opinion. ~~As of June 30, 2010, this related party had a balance due of $1,840, which is reflected in accounts payable – related parties.~~

~~F-20~~In our opinion, the financial statements referred to above present fairly, in all material respects, the

~~SONNEN CORPORATION AND SUBSIDIARY~~financial position of Sonnen Corporation and Subsidiary as of June 30, 2011, and the results of its

~~(Formerly known as Simple Tech~~operations and its cash flows for the year ended June 30, ~~Inc.)~~ 2011 and for the period from November 16,

2006 (~~A DEVELOPMENT STAGE ENTERPRISE~~inception) to June 30, 2011 in conformity with accounting principles generally accepted in the

~~NOTES~~United TOStates ~~CONSOLIDATED~~of ~~FINANCIAL STATEMENTS~~America.

~~For~~The ~~the~~accompanying ~~years~~financial ~~ended~~statements ~~June~~have ~~30,~~been ~~2010~~prepared ~~and~~assuming ~~2009~~that the Company will continue as a

~~NOTE 12 – RELATED PARTY TRANSACTIONS - continued~~going concern. As discussed in Note 1 to the financial statements, the Company’s significant operating

~~Employment Agreements~~losses raise substantial doubt about its ability to continue as a going concern. Management’s plans

Onregarding ~~January 1, 2010,~~ the ~~Company~~resolution ~~entered into various employment agreements with the Company’s President and Chief Executive Officer, Head~~ of ~~Research,~~this ~~Project~~issue ~~Manager, and Executive Assistant. All agreements~~ are ~~for~~also ~~one~~discussed ~~year.~~in ~~Total~~Note salaries for all employees subject to the employment agreements total $282,000 annually. Each agreement may be terminated by the Company immediately with cause or thirty days written notice by either party. The agreement for the Head of Research includes an option to purchase 100,000 shares of common stock at an exercise price of $1.~~25 per share that vests equally over three years.~~ The ~~details~~financial ofstatements ~~each~~do ~~agreement~~not ~~are contained in the table below:~~include

Position	Monthly Salary	Term	Stock Options Granted
President/ CEO	$ 7,500	1 yr.	-
Head of Research	$ 6,000	1 yr.	100,000
Project Manager	$ 8,000	1 yr.	-
Executive Assistant	$ 2,000	1 yr.	-

any adjustments that might result from the outcome of this uncertainty.

As/S/ of May 15, 2010, we terminated all of the above employment agreements, due to the above breach of contract suit discussed in Notes 5 and 10. As of June 30, 2010, we had accrued $13,283 for severance pay and payroll taxes for termination of the contract with our Head of Research.MartinelliMick

~~NOTE~~MartinelliMick ~~13 – COMMITMENTS AND CONTINGENCIES~~PLLC

~~Consulting~~Spokane, ~~Agreements~~Washington

OnMarch ~~January 18~~13, 2010, the Company entered into a five month consulting agreement for investment and financial services that calls for the consultant to be issued 100,000 shares of common stock valued at $101,000 as a signing fee. Additional payments will be negotiated as needed, and the agreement extends through May 18, 2010. As of June 30, 2010, this agreement was not renewed and we owe no further amounts.2013

~~Contingencies~~ F-2

OnREPORT ~~February~~OF 6,INDEPENDENT ~~2010,~~REGISTERED PTPUBLIC ~~Group~~ACCOUNTING notified the Company of a purported breach of contract terms including a breach of confidentiality, insufficient funding for research and development activities and failure to provide direct access to our patent attorneys. The licensing agreement allows for a ninety day period in which to cure purported breaches. The Company’s management and board of directors have reason to believe that PT Group may not be the rightful owner of the intellectual property licensed under the licensing agreement. (Note 6) FIRM*

~~F-21~~To the Board of Directors and

~~SONNEN~~Stockholders ~~CORPORATION~~of ~~AND~~Sonnen ~~SUBSIDIARY~~Corporation

~~(Formerly known~~ We have audited the accompanying balance sheet of Sonnen Corporation and Subsidiary as ~~Simple Tech~~ of June 30, ~~Inc.)~~

~~(A DEVELOPMENT STAGE ENTERPRISE)~~2010 and the related statements of income, stockholders’ equity, and cash flows for the year ended June

~~NOTES~~30, TO2010 ~~CONSOLIDATED~~and ~~FINANCIAL~~for ~~STATEMENTS~~the period from November 16, 2006 (inception) to June 30, 2010. Sonnen Corporation’s

~~For the years ended June 30, 2010 and 2009~~management is responsible for these financial statements. Our responsibility is to express an opinion on

~~NOTE~~these 13financial –statements ~~COMMITMENTS~~based ~~AND~~on ~~CONTINGENCIES~~our ~~- continued~~audit.

~~On March 8, 2010, Sonnen filed a complaint~~ We conducted our audit in ~~the Circuit Court of the 11th Judicial Court In and For Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection~~ accordance with ~~a breach of~~ the ~~licensing agreement dated July 27, 2009. The complaint seeks: (i) money damages for fraud that stem from reliance on PT Group's claim~~ standards of ownership over certain proprietary information, PT Group’s misrepresentation of efforts credited to prior research and development and PT Group’s failure to provide sufficient technical information on which to prepare patents to secure the technology, (ii) the return of Sonnen shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief sought to prohibit Mr. Leonard’s use of confidential information to which he is not entitled, and (iv) reasonable attorney’s fees. Sonnen expects to succeed on the merits of its claims. Public Company Accounting Oversight

~~NOTE 14– SUBSEQUENT EVENTS~~Board (United States). Those standards require that we plan and perform the audit to obtain reasonable

~~In accordance with Accounting Standards Codification (ASC) topic 855-10 “Subsequent Events”,~~ assurance about whether the ~~Company has evaluated subsequent events up to the date which the~~ financial statements ~~were available to be issued~~ are free of material misstatement. The ~~Company has determined that there were no such events that warrant disclosure or recognition in the financial statements.~~ company is not

~~F-22~~required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

~~ITEM~~Our audit included 9.consideration ~~CHANGES~~of INinternal ~~AND~~control over financial ~~DISAGREEMENTS~~reporting ~~WITH~~as ~~ACCOUNTANTS~~a ONbasis for ~~ACCOUNTING~~designing ~~AND FINANCIAL DISCLOSURE~~audit

~~There have not been any changes~~ procedures that are appropriate in ~~or disagreements with accountants~~ the circumstances, but not for the purpose of expressing an opinion on ~~accounting and financial disclosure or any other matter.~~

~~ITEM 9A~~the effectiveness of the company’s internal control over financial reporting. ~~CONTROLS AND PROCEDURES~~ Accordingly, we express no

~~Evaluation of Disclosure Controls~~ such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and ~~Procedures~~

~~In connection with~~ disclosures in the ~~preparation of this annual report, an evaluation was carried out by Sonnen’s management, with the participation of the chief executive officer and the chief~~ financial ~~officer~~ statements, of assessing the ~~effectiveness of Sonnen’s disclosure controls~~ accounting principles used and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of June 30, 2010. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures. significant estimates

~~Based~~made by ~~on that evaluation, Sonnen’s~~ management ~~concluded~~, as of well as evaluating the end of the period covered by this report, that Sonnen’s disclosure controls and procedures were ineffective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and such information was accumulated and communicated to management, including the chief executive officer and the chief overall financial ~~officer, to allow timely decisions regarding required disclosures~~ statement presentation. We believe that

~~Management’s~~our ~~Report~~audit onprovides ~~Internal~~a ~~Control~~reasonable ~~over~~basis ~~Financial~~for ~~Reporting~~our opinion.

~~The management of Sonnen is responsible for establishing and maintaining adequate internal control over financial reporting. Sonnen’s internal control over financial reporting is a process~~In our opinion, ~~under~~ the ~~supervision of the chief executive officer and the chief~~ financial ~~officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Sonnen’s financial~~ statements ~~for external purposes~~ referred to above present fairly, in ~~accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:~~ all material respects, the

~~Pertain to the maintenance~~ financial position of ~~records that in reasonable detail accurately~~ Sonnen Corporation and ~~fairly reflect the transactions~~ Subsidiary as of June 30, 2010, and ~~dispositions~~ the results of ~~Sonnen’s assets;~~ its

~~Provide reasonable assurance that transactions are recorded as necessary to permit preparation of~~ operations and its cash flows for the ~~financial statements in accordance with generally accepted accounting principles~~ year ended June 30, 2010 and ~~that receipts and expenditures are being made only in accordance with authorizations of management and~~ for the ~~board of directors; and~~ period from November 16,

~~Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition~~2006 (inception) to June 30, ~~use, or disposition of Sonnen’s assets that could have a material effect on~~ 2010 in conformity with accounting principles generally accepted in the ~~financial statements.~~

20United States of America.

~~Due~~The toaccompanying ~~its inherent limitations, internal control over~~ financial ~~reporting~~statements ~~may~~have ~~not~~been ~~prevent~~prepared orassuming ~~detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk~~ that ~~controls may become inadequate because of changes in conditions or that~~ the ~~degree~~Company ofwill ~~compliance~~continue ~~with~~as ~~the policies or procedures may deteriorate.~~a

Sonnen’s management conducted an assessment of the effectiveness of our internal control over financial reporting as of June 30, 2010, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment identified material weaknesses in internal control over financial reportinggoing concern. ~~A material weakness is a control deficiency, or a combination of deficiencies~~ As discussed in internal control over financial reporting that creates a reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis. Since Note 3 to the ~~assessment of the effectiveness of our internal control over~~ financial ~~reporting did identify material weaknesses~~ statements, ~~management considers its internal control over financial reporting to be ineffective.~~ the Company’s significant operating

~~The matters involving internal control over financial reporting that our management considered~~ losses raise substantial doubt about its ability to ~~be material weaknesses under were:~~ continue as a going concern. Management’s plans

~~· Procedures~~regarding ~~for Equity Valuation. Management has not established with appropriate rigor~~ the ~~procedures~~resolution ~~surrounding~~of ~~certain~~this ~~accounting~~issue ~~judgments~~are ~~made~~also bydiscussed ~~management~~ in ~~the~~Note ~~preparation of financial statements, including accounting for stock options or warrants and accounting for non-cash equity transactions~~3. The ~~insufficiency of accounting procedures led to the identification by the auditors of required material adjustments to Sonnen’s~~ financial statements. do not include

~~Management~~any ~~believes~~adjustments that ~~the~~might material weakness set forth above did not have an effect on our financial results. However, management believes that ineffective controls over period end financial disclosure and reporting processes could result infrom athe ~~material~~outcome ~~misstatement~~of inthis ~~our financial statements in future periods~~uncertainty.

~~This annual report does not include an attestation report of Sonnen'~~/s/ ~~registered~~BehlerMick ~~public accounting firm regarding internal control over financial reporting as management's report is not subject to attestation by Sonnen's registered public accounting firm.~~ PS

~~Management’s~~BehlerMick ~~Remediation Initiatives~~ PS

~~Sonnen~~Spokane, plans to increase its reliance on qualified accounting personnel on an outsource basis to ensure that accurate assumptions and interpretations of GAAP accounting rules and practices are uniformly applied to its accounting reconciliation going forward in order to remediate the identified material weakness and enhance its internal controls over financial reporting.Washington

~~Changes~~October in11, ~~Internal Controls over Financial Reporting~~2010

During the period ended June 30, 2010, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.___________________________________________

~~ITEM~~* This ~~9B.~~is ~~OTHER~~a ~~INFORMATION~~copy of auditor’s report dated October 11, 2010 previously issued on the Company’s Form 10-K for the fiscal year

~~None~~ended June 30, 2010. The predecessor auditor has not reissued its report because the firm has ceased its operations. PCAOB

21Section 9508 – Reports on Audited Financial Statements; Auditing Interpretations of Section 508 and the Division of Corp Fin –

~~PART~~Reporting ~~III~~Manual 4820 Accountant’s Inability to Reissue Reports [AU 9508, Interpretation 15, Regulation C, Rule 437]

~~ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE~~F-3

~~Directors~~SONNEN ~~and~~CORPORATION ~~Executive~~AND ~~Officers~~SUBSIDIARY

~~The~~(A ~~following~~DEVELOPMENT ~~table~~STAGE ~~sets forth the name, age and position of each director and executive officer of the Sonnen:~~ENTERPRISE)

Name	Age	Year Appointed	Position(s) and Office(s)
Robert Miller	56	2009	President, chief executive officer and director.
Costas Takkas	52	2009	Chief financial officer, principal accounting officer and director
Aviad Krief *	28	2006	Director

CONSOLIDATED BALANCE SHEETS

*June ~~Resigned on August~~ 30, ~~2009~~

~~Robert Miller was appointed as a member of the board of directors on~~ June 1630, ~~2009, and as president and chief executive officer on July 27, 2009.~~

From 2002 to present, Mr. Miller has been a consultant to Prosper Financial, Inc., a management company that provides financial and corporate consulting services to start-up companies. Since 2007 Mr. Miller has been a director of LifeSpan BioSciences, Inc., a provider of reagents and services for proteomics and pathology. LifeSpan’s catalogue of antibodies is used for research applications including immunoblotting, immunohistochemistry, immunofluorescence, and fluorescence-activated cell sorting. Mr. Miller’s prior experience includes being (i) the founder and chairman of Crystallex International Corporation, a Canadian based gold producer, (ii) a director and financier of ZMAX Corporation, a “y2k” company, (iii) the founder and director of Nanovation Technologies Inc, a developer of fiber-optic products, and (iv) the principle financier and consultant to Asiamerica Equities Inc., a merchant bank that was based in Hong Kong. Since December of 2009 Mr. Miller has also served as an officer and director of Abakan Inc., a company invested in the development of advanced nanocomposite ceramic-metallic (cermet) coatings.2011

~~Costas Takkas was appointed as a member of the board of directors on July 27, 2009, and as chief financial officer and principal accounting officer on July 27, 2009.~~ 2010

Mr. Takkas, a practicing Chartered Accountant, brings to Sonnen over 25 years of financial experience and expertise. He has acted as a director and officer of numerous development-stage public companies involved with projects in the technology, mining, construction, gaming, drug development and medical equipment industries. Mr. Takkas is a member of the Institute of Chartered Accountants in England & Wales (ACA) and graduated with a B.Sc. (Honors) in Physics and an Associate Royal College of Science (ARCS) from the Imperial College of Science and Technology, University of London in 1978. Mr. Takkas is not a director of any reporting corporations other than Sonnen.ASSETS

22CURRENT ASSETS

~~Term~~Cash ofand ~~Office~~cash equivalents

Our directors are appointed for one year terms to hold office until the next annual meeting of our shareholders or until removed from office in accordance with our bylaws. Our executive officers are appointed by our board of directors and hold office pursuant to employment agreements or until removed by the board.$

~~Family Relationships~~159 $

~~There are no family relationships between or among the directors or executive officers.~~840

~~Involvement~~Prepaid inexpenses ~~Certain~~(Note ~~Legal Proceedings~~3)

~~During the past five years, none of the following occurred with respect to a present or former director, executive officer, or employee: (~~1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.099

~~Compliance with Section 16(A) of the Exchange Act~~8,332

~~Based~~Total ~~solely~~Current upon a review of Forms 3, 4 and 5 furnished to Sonnen, we are not aware of any persons who, during the period ended June 30, 2010, failed to file, on a timely basis, reports required by Section 16(a) of the Securities Exchange Act of 1934:Assets

~~Code of Ethics~~1,258

~~Sonnen has not adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the Securities Exchange Act of 1934. The Code of Ethics applies to directors and senior officers~~9, ~~such as the principal executive officer, principal financial officer, controller, and persons performing similar functions. Sonnen expects to adopt a Code of Ethics in the near future.~~172

23OTHER ASSETS

~~Board~~Office offurniture ~~Directors~~and ~~Committees~~equipment, net (Note 2)

The board of directors has not established an audit committee. An audit committee typically reviews, acts on and reports to the board of directors with respect to various auditing and accounting matters, including the recommendations and performance of independent auditors, the scope of the annual audits, fees to be paid to the independent auditors, and internal accounting and financial control policies and procedures. Certain stock exchanges currently require companies to adopt a formal written charter that establishes an audit committee that specifies the scope of an audit committee’s responsibilities and the means by which it carries out those responsibilities. In order to be listed on any of these exchanges, the Sonnen will be required to establish an audit committee. The board of directors has not established a compensation committee. We intend to establish both an audit and compensation committee over the next twelve months.-

~~Director Compensation~~1,427

~~Directors~~Total ~~currently~~Other ~~are reimbursed for out-of-pocket costs incurred in attending meetings but are not compensated for their service as directors. Sonnen may compensate directors in the future.~~Assets

~~Compensation Committee Deliberations and Insider Participation~~-

Deliberations were conducted within the current period in connection with Sonnen’s intent to enter into an employment agreement with its president and chief executive officer. An employment agreement was executed with Mr. Miller on January 1, 2010 for a renewable one year term that included a salary of $90,000 per annum terminable at the option of Sonnen immediately with cause or on thirty days written notice. The agreement with Sonnen’s chief executive officer was terminated on May 15, 2010 in response to the civil complaint filed against the purported owners of the licensed technology. Sonnen’s chief executive officer currently serves without executive compensation.427

~~ITEM~~Total ~~11. EXECUTIVE COMPENSATION~~Assets

~~Compensation Discussion and Analysis~~$

~~Since Sonnen has had limited operations~~1, little compensation was paid as of the annual periods ended June 30, 2010, 2009, and 2008 to retain the services of its current and former executive officers. Nonetheless, Sonnen did enter into an employment agreement with its current chief executive officer and a consulting agreement with its current chief financial officer though the employment agreement was terminated as of the end of the current period. Our chief executive officer now serves without executive compensation and will continue to do so until such time as Sonnen moves forward with its plan of operation. 258 $

The amounts we deem appropriate to compensate executive officers may change with a return to full operations in accordance with market forces though we have no specific formula to determine future compensation. Executive compensation will include salaries or consulting fees10, options and other compensatory elements for our executive officers and any future executive employees. Decisions as to executive compensation will be based on the type of operations, the scale of those operations and available capital resources. 599

24LIABILITIES AND STOCKHOLDERS' (DEFICIT)

~~Tables~~CURRENT LIABILITIES

~~The~~Accounts following table provides summary information for the fiscal years ended June 30, 2010, 2009, and 2008 concerning cash and non-cash compensation paid or accrued by Sonnen to or on behalf of (i) the chief executive officer and (ii) any other employee to receive compensation in excess of $100,000.payable

Executive’s Summary Compensation Table
Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation ($)	All Other Compensation ($)	Total ($)
Robert Miller: CEO, and director1	2010 2009 2008	31,5004 - -	- - -	- - -	503,7549 - -	- - -	- - -	82,0565 - -	617,310 - -
Aviad Krief: director and former CEO, CFO, PAO2	2010 2009 2008	- - -	- - -	- - -	- - -	- - -	- - -	- - $10,0003	- - 10,000
Costas Takkas: former CFO, PAO and director6	2010 2009 2008	- - -	- - -	- - -	503,7548 - -	- - -	- - -	107,7847 - -	611,538 - -

~~(1) Robert Miller was appointed as president and chief executive officer on July 27~~131, ~~2009, on the resignation of Aviad Kreif.~~505 $

~~(2) Aviad Krief resigned as chief executive officer~~96, ~~chief financial officer and principal accounting officer on July 27, 2009. He resigned as a director on August 30, 2009.~~491

~~(3) Aviad~~Accounts ~~Krief~~payable ~~was~~- ~~paid~~related ~~for consulting services.~~parties

~~(4) Robert Miller’s employment agreement was terminated effective May 15~~319, ~~2010.~~379

~~(5) Prosper Financial~~82, ~~Inc., an entity related to Robert Miller, was paid for consulting services and the use of office space.~~131

~~(6) Costas~~Accrued ~~Takkas was appointed as chief financial officer, principal accounting officer and director on July 27, 2009.~~payroll

~~(7) Costas Takkas was paid for consulting services for $96~~13,~~000 and reimbursed for medical expenses for $11,784.~~283

~~(8) Costas Takkas was granted 500~~13,~~000 options that vest in equal increments over three years to purchase shares of common stock at $1.00 per share on or before August 31, 2019. None of the options had vested as of June 30, 2010.~~283

~~(9) Robert~~Notes ~~Miller~~payable is- arelated ~~beneficial~~parties ~~owner of 500,000 options held by Prosper Financial, Inc.~~(including accrued

~~The~~interest ~~following~~of ~~table~~$93 ~~provides~~– ~~summary information for the fiscal year ended~~ June 30 ~~2010 concerning unexercised options~~, ~~stock~~2011 ~~that has not vested,~~ and ~~equity~~$0 ~~incentive~~– ~~plan awards by Sonnen to or on behalf of (i) the chief executive officer and (ii) any other employee to receive compensation in excess of $100,000:~~June

2530, 2010)

Outstanding Equity Awards at Fiscal Year-End
	Option awards					Stock awards
NName	Number of securities underlying unexercised options (#) exercisable	Number of securities underlying unexercised options (#) unexercisable	Equity incentive plan awards: number of securities underlying unexercised unearned options (#)	Option exercise price ($)	Option expiration date	Number of shares or units of stock that have not vested (#)	Market value of shares or units of stock that have not vested (#)	Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)	E EEquity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)
Robert Miller1	80	8500,000	--	01.00	August 31, 2019	--	--	--	--
Costas Takkas	50	5 500,000	--	01.00	August 31, 2019	--	--	--	--

11,693

~~(1) Robert Miller is a beneficial owner of 500~~8,~~000 options held by Prosper Financial, Inc.~~500

~~Executive~~Notes ~~compensation~~payable ~~paid~~(including ~~to or~~ accrued tointerest our chief executive officer for the year ended June 30, 2010 was $617,310 as compared to $0 for the year ended June 30, 2009 and $10,000 for the year ended June 30, 2008. The increase in executive compensation over the comparative periods is in connection with the appointment of our chief executive officer and his efforts to advance Sonnen’s business plan. Executive compensation paid to our chief executive officer in the current period was comprised of a salary and consulting fees of $72,750, in addition to consulting fees and lease payments of $40,806 (paid to a related party). Executive compensation also included beneficial ownership of 500,000 options valued at $503,754 to purchase shares of Sonnen’s common stock held by a related party that vest over three years with an exercise price of $1.00 exercisable until August 31, 2019. As of June 30, 2010 none of the options had vested. Further, due to a suspension of research and development operations our chief executive officer’s employment agreement was terminated on May 15, 2010. We expect to enter into a new employment agreement with our chief executive officer on a return to research and development activities.

~~Executive compensation paid or accrued to our chief financial officer and principal accounting officer for the year ended June 30, 2010 was~~ $~~107~~16,~~784~~655- ~~as compared to $0 for the year ended~~ June 30, ~~2009~~2011 and $~~0 for the year ended June 30~~4,664 ~~2008.~~- The increase in compensation over the comparative periods is in connection with the appointment of our chief financial officer and principal accounting officer and his efforts to advance Sonnen’s business plan. Executive compensation paid to our chief financial officer and principal accounting officer in the current period was comprised of consulting fees of $96,000, medical expenses reimbursement and 500,000 stock options to purchase shares of Sonnen’s common stock held by a related party that vest over three years with an exercise price of $1.00 exercisable until August 31, 2019. As of June 30, 2010 none of the options had vested. We expect compensation for our chief financial officer and principal accounting officer to remain relatively consistent with that amount paid or accrued within the year ended June 30, 2010.)

26167,763

~~Employment Contracts and Termination of Employment and Change in Control Arrangements~~272,012

~~Sonnen~~Loans ~~had~~from anshareholder ~~employment~~(including ~~agreement~~accrued with one of its executive officers over the current period and has a consulting agreement with another of its executive officers. Neither the employment agreement, which has since terminated, nor the consulting agreement provides for any arrangement or plan pursuant to which Sonnen is obligated to provide pension, retirement or similar benefits to these executive officers. Further, we do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers. Nevertheless, the consulting agreement does provide for the grant of stock options and additional options may be granted at the discretion of our board of directors in the future. interest

~~ITEM~~of ~~12.~~$15,604 ~~SECURITY~~- ~~OWNERSHIP~~June OF30, ~~CERTAIN~~2011and ~~BENEFICIAL~~$3,405 ~~OWNERS~~– ~~AND~~June ~~MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~30,

~~The following table sets forth certain information concerning the ownership of Sonnen’s 67,893,000 shares of common stock issued and outstanding as of October 12,~~ 2010 ~~with respect to: (i~~) ~~all directors; (ii) each person known by us to be the beneficial owner of more than five percent of our common stock; and (iii) our directors and executive officers as a group.~~

Title of Class	Name and Address of Beneficial Ownership	Amount and nature of Beneficial Ownership1	Percent of Class
Common Stock	Robert Miller 4801 Alhambra Circle Coral Gables, Florida 33146	25,000,0002	37%
Common Stock	Costas Takkas 105 Marbel Drive P.O. Box 1436 GT Grand Cayman, Cayman Islands British West Indies	16,000,0003	23%
Common Stock	All Executive Officers and Directors as a Group	41,000,000	60%

166,264

(1) Beneficial ownership is determined in accordance with Commission rules and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible preferred stock currently exercisable or convertible, or exercisable or convertible within sixty (60) days, would be counted as outstanding for computing the percentage of the person holding such options or warrants but not counted as outstanding for computing the percentage of any other person. -

~~(2) Robert~~Total ~~Miller~~Current is a beneficial owner of 25,000,000 shares held by Ms. Maria Maz, to whom Mr. Miller is married and 500,000 options held by Prosper Financial, Inc., an entity owned by Ms. Maz, that vest in equal increments over three years to purchase shares of common stock at $1.00 per share on or before August 31, 2019. Liabilities

~~(3) Costas Takkas was granted 500~~809,~~000 options that vest in equal increments over three years to purchase shares of common stock at $1.00 per share on or before August 31, 2019.~~ 887

~~Changes in Control~~473,417

~~None.~~COMMITMENTS AND CONTINGENCIES (Note 11)

27-

~~ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE~~-

~~None~~STOCKHOLDERS' of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (~~including spouse, parents, children, siblings, and in-laws~~DEFICIT) of(Note any of the foregoing persons has any material interest, direct or indirect, in any transaction in the period covered by this report or in any presently proposed transaction which, in either case, has or will materially affect us, except as follows:8)

OnPreferred ~~January 1~~stock, ~~2010, Robert Miller, an officer and director of Sonnen, entered into an employment agreement in connection with his service as chief executive officer~~$0.0001 ~~The~~par ~~employment agreement provided for a salary~~value, ~~the future grant of stock options~~50, ~~a provision for the payment of a bonus and entitlement to any benefits~~000,000 ~~including health insurance that might be offered by Sonnen.~~shares

~~On October 1~~authorized, ~~2009,~~none ~~Sonnen~~issued ~~entered into a consulting agreement with Prosper Financial, Inc., a company owned by the spouse of its chief executive officer~~ and ~~one of its directors. The agreement calls for monthly payments of $2,500 for consulting services rendered and $1,200 per month in rental payments for the use of office space.~~ outstanding

On July 27, 2009, Costas Takkas, an officer and director of Sonnen, entered into a consulting agreement with us in connection with his appointment as chief financial officer and principal accounting officer. The consulting agreement provides for a monthly fee that graduates over the term of the agreement, the grant of stock options that vest over time, a provision for the payment of a bonus and entitlement to any benefits, including health insurance that might be offered by Sonnen. -

~~On September 12, 2009, Costas Takkas, an officer and director of Sonnen, purchased of 16,000,000 shares of our common stock from a former director.~~-

OnCommon ~~June 16~~stock, ~~2009,~~par ~~Ms.~~value ~~Maria Maz~~$0.0001, ~~to whom Robert Miller~~250, ~~an officer and director of the Sonnen, is married, purchased 25,~~000,000 shares ~~of our common stock from a former director.~~

~~Director~~authorized, ~~Independence~~ 67,893,000 issued and outstanding

~~Our common stock is listed on the OTCQB inter-dealer quotation system~~6, which does not have director independence requirements. For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Accordingly, we had no independent directors as of June 30, 2010.789

286,789

~~ITEM~~Paid-in ~~14. PRINCIPAL ACCOUNTANT FEES AND SERVICES~~capital

~~The following is a summary of the fees billed to us by BehlerMick PC and Dohan + Company CPA’s for professional services rendered for the past two fiscal years:~~2,841,575

Fee Category	Fiscal 2010 Fees ($)	Fiscal 2009 Fees ($)
Audit Fees	0	19,750
Audit-Related Fees	0	0
Tax Fees	0	0
All Other Fees	0	0

1,981,071

~~Audit~~Accumulated ~~Fees~~deficit ~~consist~~during ~~of fees billed for professional services rendered for~~ the ~~audit~~development of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by BehlerMick PC and Dohan + Company CPA’s in connection with statutory and regulatory filings or engagements.stage

~~Audit Committee Pre-Approval~~ (3,656,993)

~~Sonnen did not have a standing audit committee at the time its respective auditors were engaged. Therefore~~(2, ~~all services provided to Sonnen by BehlerMick PC and Dohan + Company CPA’s~~450, ~~as detailed above, were pre-approved by Sonnen’s board of directors. BehlerMick PC and Dohan + Company CPA’s performed all work only with their permanent full time employees.~~ 678)

~~PART~~Total IVStockholders' (Deficit)

~~ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES~~(808,629)

(a462,818) ~~Financial Statements~~

~~The~~Total ~~following~~Liabilities ~~documents are filed under “Item 8. Financial Statements~~ and ~~Supplementary~~Stockholders' ~~Data,” pages F-1 through F-22, and are included as part of this Form 10-K:~~ (Deficit)

~~Financial Statements of Sonnen for the years ended June 30, 2010 and 2009:~~$

~~Report of Independent Registered Public Accounting Firm~~1,258 $

~~Report of Independent Registered Public Accounting Firm~~10,599

~~Consolidated~~See ~~Balance~~accompanying ~~Sheets~~notes to consolidated financial statements

~~Consolidated Statements of Loss~~F-4

~~Consolidated~~SONNEN ~~Statements~~CORPORATION ofAND ~~Changes in Stockholders’ Equity (Deficit)~~SUBSIDIARY

~~Consolidated~~(A ~~Statements~~DEVELOPMENT ofSTAGE ~~Cash Flows~~ENTERPRISE)

~~Notes~~CONSOLIDATED toSTATEMENTS ~~Consolidated~~OF ~~Financial Statements~~OPERATIONS

~~(b) Exhibits~~Cumulative

~~The~~amounts ~~exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page 31 of this Form 10-K, and are incorporated herein by this reference.~~from

~~(c)~~development ~~Financial Statement Schedules~~stage

We are not filing any financial statement schedules as part of this Form 10-K because such schedules are either not applicable or the required information is included in the financial statements or notes thereto. activities

29For the years ended

~~SIGNATURES~~(November 16, 2006

~~Pursuant~~June ~~to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934~~30, ~~the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~

Sonnen Corporation	Date
/s/ Robert Miller By: Robert Miller Its: President, Chief Executive Officer and Director	October 12, 2010
/s/ Costas Takkas By: Costas Takkas Its: Chief Financial Officer, Principal Accounting Officer and Director	October 12, 2010

through

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 2011

	Date
/s/ Robert Miller Robert Miller President, Chief Executive Officer and Director	October 12, 2010
/s/ Costas Takkas Costas Takkas Chief Financial Officer, Principal Accounting Officer and Director	October 12, 2010

2010

June 30, 2011)

~~INDEX TO EXHIBITS~~REVENUES

~~Exhibit Description~~$

~~3.1(i)* Articles of Incorporation, incorporated by reference to the Company’s Form SB~~-~~2 filed with the Commission on August 6, 2007.~~ $

~~3.1(ii)* Amendment to the Articles of Incorporation, incorporated by reference to the Company’s Definitive 14C filed with the Commission on October 14, 2009.~~- $

~~3.2* Bylaws, incorporated by reference to the Company’s Form SB~~-~~2 filed with the Commission on August 6, 2007.~~

~~10(i)* Licensing~~GENERAL ~~Agreement~~& ~~between~~ADMINISTRATIVE ~~the Company, the Company’s wholly owned subsidiary, and P.T. Group, Ltd., dated July 27, 2009, incorporated by reference to the Company’s Form 10-K filed with the Commission on August 3, 2009.~~ EXPENSES

~~10(ii)* Consulting~~General ~~Agreement between the Company~~ and ~~Costas Takkas, dated July 27, 2009, incorporated by reference to the Company’s Form 10-K filed with the Commission on August 3, 2009.~~administrative

~~10(iii)* Employment Agreement between the Company and Paul Leonard dated July 27~~7, ~~2009, incorporated by reference to the Company’s Form 10-K filed with the Commission on August 3, 2009.~~940

~~10(iv)* Employment Agreement between the Company and David Greenbaum dated August 1~~83, ~~2009, incorporated by reference to the Company’s Form 10-Q filed with the Commission on November 23, 2009.~~155

~~10(v)* Consulting Agreement between the Company and Carol Laws dated August 1~~96, ~~2009, incorporated by reference to the Company’s Form 10-Q filed with the Commission on November 23, 2009.~~053

~~10(vi)* Consulting~~Professional ~~Agreement between the Company and Backend Technologies, LLC dated August 5, 2009, incorporated by reference to the Company’s Form 10-Q filed with the Commission on November 23, 2009.~~fees

~~10(vii)* Employment Agreement between the Company and Robert H. Miller dated January 1~~102, ~~2010, incorporated by reference to the Company’ Form 10-Q filed with the Commission on November 23, 2010.~~508

~~21* Subsidiaries of the Company~~188, ~~incorporated by reference to the Company’s Form 10-K filed with the Commission on August 3, 2009.~~243

~~31(i) Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~ 352,476

~~31(ii) Certification~~Consulting ~~of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~ fees

~~32(i) Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes~~-~~Oxley Act of 2002.~~

~~32(ii) Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~179,727

31179,727

Consulting and professional fees - related parties

208,000

290,250

498,250

Stock based compensation

101,000

Compensation and related taxes and benefits

860,504

735,287

1,595,791

Transfer fees

1,255

4,868

9,304

Depreciation

618

426

1,044

Research & development

107

167,560

167,666

Total General & Administrative Expenses

1,180,932

1,750,516

3,001,311

Loss before other income (expense)

(1,180,932)

(1,750,516)

(3,001,311)

Interest income/ (expense)

(24,574)

(8,139)

(31,322)

Loss on foreign currency exchange

(1,551)

Loss on disposal of assets

(809)

Impairment loss on asset

(672,000)

Other income

50,000

Loss before provision for income taxes

(1,206,315)

(2,380,655)

(3,656,993)

Provision for income taxes

NET LOSS

$ (1,206,315) $

(2,380,655) $

(3,656,993)

NET LOSS PER SHARE - BASIC AND DILUTED

(0.02) $

(0.04)

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING - BASIC AND DILUTED

67,893,000

67,161,027

See accompanying notes to consolidated financial statements

F-5

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

Deficit

Accumulated

Additional

During the

Total

Common Stock

Paid-in

Development

Stockholders'

Amount

Capital

Stage

Equity (Deficit)

Inception, November 16, 2006

- $

Common stock issued to founders

(November 16, 2006, at $0.0001 per share)

50,000,000

5,000

(4,500)

500

Private placement closed June 28, 2007, at

$0.05 per share

13,808,000

1,381

67,659

69,040

Net loss for the year of inception

(6,039)

Balance, June 30, 2007

63,808,000

6,381

63,159

(6,309)

63,501

Net loss for the year

(49,738)

Balance, June 30, 2008

63,808,000

6,381

63,159

(55,777)

13,763

Net loss for the year

(14,245)

Balance, June 30, 2009

63,808,000

6,381

63,159

(70,022)

(482)

Shares issued for license agreement at $0.20 per share

3,360,000

336

671,664

672,000

Shares issued September 30, 2009 for cash

at $0.80 per share

625,000

499,938

500,000

Share issued January 18, 2010 for services

performed at $0.75 per share

100,000

100,990

101,000

Stock options expense

645,321

Net loss for the year

(2,380,655)

Balance, June 30, 2010

67,893,000

6,789

1,981,071

(2,450,678)

(462,817)

Stock options expense

860,504

Net loss for the year

(1,206,315)

Balance, June 30, 2011

67,893,000 $

6,789 $

2,841,575 $

(3,656,993) $

(808),629

See accompanying notes to consolidated financial statements

F-6

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cumulative

amounts from

development

stage

For the years ended

activities

June 30,

(November 16,

2006 through

2011

2010

June 30, 2011)

CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES

Net (loss) from development stage activities

(1,206,315) $

(2,380,655) $

(3,656,993)

Adjustments to reconcile net loss to net cash

provided (used) by development stage activities:

Depreciation

618

426

1,044

Stock options vested

860,504

645,321

1,505,825

Stock issued for services

101,000

Loss on disposal of assets

809

Impairment loss on asset

672,000

Changes in operating assets and liabilities:

Increase in prepaid expenses

7,233

(8,332)

(1,099)

Increase in accounts payable

35,014

124,370

319,379

Increase in accounts payable - related parties

237,249

82,130

Increase in accrued liabilities

13,283

Increase in accrued interest

24,107

8,070

32,177

Total adjustments

1,165,534

1,638,267

2,813,284

NET CASH USED BY DEVELOPMENT STAGE ACTIVITIES

(40,781)

(742,388)

(843,709)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

(1,853)

NET CASH USED BY INVESTING ACTIVITIES

(1,853)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from notes payable, net

37,000

243,660

280,660

Proceeds from notes payable - related parties

7,100

38,500

45,600

Repayments to notes payable - related party

(46,079)

(50,079)

Proceeds from sale of common stock, net of offering costs

500,000

569,540

NET CASH PROVIDED BY FINANCING ACTIVITIES

40,100

736,081

845,721

NET INCREASE IN CASH AND CASH EQUIVALENTS

(681)

(8,160)

159

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

840

9,000

CASH AND CASH EQUIVALENTS, END OF PERIOD

159 $

840 $

159

Supplemental Disclosures:

Cash paid for income taxes

- $

Cash paid for interest

- $

Non-cash Disclosures:

Payments made by related party on behalf of the Company:

Increase in notes payable - related parties

- $

21,079 $

21,079

Decrease in accounts payable - related parties

- $

(11,079) $

(11,079)

Increase in prepaid expenses

- $

(10,000) $

(10,000)

- $

To apply balance owed to a related party to accounts receivable:

Decrease in accounts receivable - related party

- $

40,000 $

40,000

Repayments of note payable - related party

(40,000) $

(40,000)

- $

Stock issued for licensing agreement rights

- $

672,000 $

672,000

See accompanying notes to consolidated financial statements

F-7

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES

HISTORY, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Sonnen Corporation was incorporated in the state of Nevada on November 16, 2006 as “Simple Tech,

Inc.” Sonnen Corporation and its wholly-owned subsidiary, Sonnen One, Inc., are referred to herein as the

“Company,” “We,” “Us,” “Our”, is in the development stage as defined under FASB ASC 915-10,

"Development Stage Entities". By June 2009, the Company had been unable to realize its original

business objective. In July 2009, the Company entered into a licensing agreement to research, develop

and market products that rely upon a novel process for energy generation consisting of specific materials

and proprietary material combinations.

On November 3, 2009, the Company amended its articles of incorporation to change its name from

“Simple Tech, Inc.” to “Sonnen Corporation” and to decrease the number of its authorized common stock

from one billion five hundred million (1,500,000,000) shares (par value $0.0001) to two hundred fifty

million (250,000,000) shares (par value $0.0001) without affecting the number of issued and outstanding

shares. The Company’s subsidiary changed its name from “Sonnen Corporation” to “Sonnen One, Inc.”

The Company’s year-end is June 30.

On November 9, 2009, the Company formed a Scientific Advisory Board to support it with research,

development, and commercialization efforts through advice, counsel, and direct participation utilizing the

industry expertise and professional and academic backgrounds of its Scientific Advisory Board members

pursuant to a licensing agreement entered into on July 27, 2009. (Note 4)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development Stage Enterprise

At June 30, 2011, the Company’s business operations had not fully developed and it is highly dependent

upon procuring additional funding and therefore is considered a development stage enterprise.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Sonnen Corporation and

Sonnen One, Inc., its wholly-owned subsidiary. All material intercompany accounts and transactions

between the companies for the periods presented have been eliminated in consolidation.

F-8

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES - continued

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will

continue as a going concern. The Company has a cumulative net loss for the period from inception

(November 16, 2006) through June 30, 2011 of $3,656,993, a working capital deficit of $808,629 and for

the year ended June 30, 2011 negative cash flows from development stage activities of $40,781. These

conditions raise substantial doubt about the Company's ability to continue as a going concern. The

Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain

additional debt and/or equity financing as may be required and ultimately to attain profitability. The

consolidated financial statements do not include any adjustments that might result from the outcome of

this uncertainty.

Cash Equivalents

We consider all highly liquid investments with the original maturities of three months or less to be cash

equivalents.

Furniture and Computer Equipment

Furniture and computer equipment are stated at cost less accumulated depreciation. Maintenance and

repairs are charged to operations as incurred. Depreciation is based on the straight-line method over the

estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost

and accumulated depreciation are removed from the accounts, and any resulting gain or loss is

reflected in operations in the period realized. Accelerated depreciation methods are generally used for

income tax purposes.

Depreciation

Depreciation in the past was computed on the straight-line method net of salvage value with useful lives

as follows:

Computer equipment

3 years

F-9

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES - continued

Income Taxes

The Company accounts for income taxes under the liability method required by ASC 740, “Income

Taxes”, which requires the recognition of deferred tax liabilities and assets for the expected future tax

consequences of events that have been included in the financial statements or tax returns Under this

method, deferred income taxes are recognized for the tax consequences in future years of differences

between the tax bases of assets and liabilities and their financial reporting amounts at each period end

based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are

expected to affect taxable income. Valuation allowances are established, when necessary, to reduce

deferred tax assets to the amount expected to be realized. The provision for income taxes represents the

tax payable for the period and the change during the period in deferred tax assets and liabilities. Tax

returns are subject to examination by taxing authorities and returns for fiscal years 2007 – 2010 are still

open.

Earnings (loss) Per Common Share

The Company computes net loss per share in accordance with FASB ASC 260-10, "Earnings per Share".

FASB ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of

the statement of operations. Basic EPS is computed by dividing net loss available to common

stockholders (numerator) by the weighted average number of shares outstanding (denominator)

during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during

the period. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. The only

potentially dilutive common shares outstanding are stock options from inception (Note 9).

Reclassifications

Certain amounts in the June 30, 2010 financial statements have been reclassified to conform to the June

30, 2011 presentation. These reclassifications had no effect upon net income, accumulated deficits, or

losses per share as previously stated.

Fair Value of Financial Instruments

In January 2008, the Company adopted FASB ASC 820, Fair Value Measurements and Disclosures

(“ASC 820”) (Formerly referenced as SFAS No. 157, Fair Value Measurements), to value its financial

assets and liabilities. The adoption of ASC 820 did not have a significant impact on the Company’s

results of operations, financial position or cash flows. ASC 820 defines fair value, establishes a

framework for measuring fair value under GAAP and expands disclosures about fair value

measurements. ASC 820 defines fair value as the exchange price that would be paid by an external party

for an asset or liability (exit price).

ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of

observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels

of inputs may be used to measure fair value:

F-10

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES - continued

Fair Value of Financial Instruments - continued

Level 1 – Active market provides unadjusted quoted prices for identical assets or liabilities that the

company has the ability to access;

Level 2 – Quoted prices for similar assets or liabilities in active markets or quoted prices for identical

or similar assets or liabilities in inactive markets. Level 2 inputs include those other than quoted

prices that are observable for the asset or liability and that are derived principally from, or

corroborated by, observable market data by correlation of other means. If the asset or liability has a

specified term the Level 2 input must be observable for substantially the full term of the asset or

liability; and

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value

measurement.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent

information available to management as of June 30, 2011. The Company uses the market approach to

measure fair value for its Level 1 financial assets and liabilities. The market approach uses prices and

other relevant information generated by market transactions involving identical or comparable assets or

liabilities.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair

values. These financial instruments which include cash, accounts receivable, accounts payable, and notes

payable are valued using Level 1 inputs and are immediately available without market risk to

principal. Fair values were assumed to approximate carrying values for these financial instruments since

they are short term in nature and their carrying amounts approximate fair values or they are receivable or

payable on demand. The carrying value of note payable to stockholder approximates its fair value

because the interest rates associated with the instrument approximates current interest rates charged on

similar current borrowings. The Company does not have other financial assets that would be

characterized as Level 2 or Level 3 assets.

FASB ASC 480-10, disclosures about fair value of financial instruments, defines the fair value of a

financial instrument as the amount at which the instrument could be exchanged in a current transaction

between willing parties. The carrying values of the Company’s financial instruments consist of cash and

accounts payable at fair market value.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States of America requires management to make estimates and assumptions that affect the

reported amounts of assets, the disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting periods. Actual

results could differ from those estimates and assumptions.

F-11

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES - continued

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been

paid during the periods shown.

Foreign Currency Translation

The financial statements are presented in United States dollars. In accordance with Statement of

Financial Accounting Standards ASC Topic 820, “Foreign Currency Translation”, since the functional

currency of the Company is U.S. dollars; the foreign currency financial statements of the Company’s

subsidiaries are re-measured into U.S. dollars. Monetary assets and liabilities are re-measured using the

foreign exchange rate that prevailed at the balance sheet date. Revenue and expenses are translated at

weighted average rates of exchange during the year and stockholders’ equity accounts and furniture and

equipment are translated by using historical exchange rates. Any re-measurement gain or loss incurred is

reported in the income statement.

General Accounting Policy for Contingencies

Certain conditions may exist which may result in a loss to the Company, but which will only be resolved

when one or more future events occur or fail to occur. The Company’s management and its legal counsel

assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In

assessing loss contingencies related to legal proceedings that are pending against the Company, or

unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the

perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the

amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and

the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s

financial statements. If the assessment indicates that a potentially material loss contingency is not

probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent

liability, together with an estimate of the range of possible loss if determinable and material, would be

disclosed.

Loss contingencies considered remote are generally not disclosed unless they arise from guarantees, in

which case the guarantees would be disclosed.

As of June 30, 2011 and 2010, the Company’s management believes that there are no outstanding legal

proceedings which would have a material adverse effect on the financial position of the Company (see

Notes 4 and 11).

F-12

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 1 – NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recently Issued Accounting Standards

The Company has reviewed all recently issued accounting standards and unless discussed below, the

Company has deemed that it expects no effect from the standard.

In May 2011, the FASB issued ASU No. 2011-04 which relates to fair value measurement (FASB ASC

Topic 820), which amends current guidance to achieve common fair value measurement and disclosure

requirements in U.S. GAAP and International Financial Reporting Standards. The amendments generally

represent clarification of FASB ASC Topic 820, but also include instances where a particular principle or

requirement for measuring fair value or disclosing information about fair value measurements has

changed. The guidance also expands the disclosures for fair value measurements that are estimated using

significant unobservable (Level 3) inputs. This guidance is effective during interim and annual periods

beginning after December 15, 2011 and is to be applied prospectively. The adoption of this standard will

not materially impact the Company's financial statement statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-5, Presentation of Comprehensive

Income. This standard requires presentation of the items of net income and other comprehensive income

in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but

consecutive, statements of net income and other comprehensive income. The new requirements are

effective for fiscal years beginning after December 15, 2011. Early adoption is permitted and full

retrospective application is required. The Company does not expect a significant impact on the

Company's financial positions as a result of adoption of these new requirements.

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2011 and 2010:

June 30, 2011

June 30, 2010

Computer equipment and software

- $

1,853

Less: Accumulated depreciation

(426)

Total property and equipment, net

- $

1,427

In the period ended December 31, 2009, the Company purchased two laptop computers and a scanner for

our offices that will be depreciated over three years on a straight line basis. Depreciation expense for the

years ended June 30, 2011 and 2010, was $618 and $426, respectively.

In June 2011, the Company disposed of the above assets for no consideration and recorded a loss on

disposal of assets of $809, which is reflected in our Consolidated Statement of Operations.

F-13

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 3 – PREPAID EXPENSES

Prepaid expenses comprise of the following at June 30, 2011:

2011

Haynes and Boone, LLP

Prepayment retainer for legal fees

1,099

Total

1,099

Prepaid expenses comprise of the following at June 30, 2010:

2010

Hall, Lamb and Hall

Prepayment retainer for legal fees $

4,875

W.L. MacDonald Corp.

Prepayment retainer for legal fees

2,358

Haynes and Boone, LLP Prepayment retainer for legal fees

1,099

Total

8,332

NOTE 4 – LICENSING AGREEMENT

The Company entered into a licensing agreement (the “Agreement”) with PT Group, Limited (“PT

Group”), an unrelated entity, on July 27, 2009, that grants the Company an exclusive, non-transferable

license to use PT Group’s intellectual property of a certain technology and licensed products to be used in

achieving the Company’s business objectives. The terms of the agreement would have continued until the

expiry of protections afforded for the intellectual property, provided that the Company was not in breach

or default of any of the terms or conditions contained in the Agreement. During the term of the licensing

agreement, the PT Group retained sole and beneficial propriety of the intellectual property including any

improvements made to any licensed products or future products, regardless of the source.

In exchange for use of the license, the PT Group was issued common shares equal to 5% of the issued and

outstanding common shares, 3,360,000 shares of the Company at a value of $0.20 per share on the

execution date, which was estimated to be $672,000. Additionally, upon the Company cumulatively

raising $50 million in equity financing, the Company guaranteed that PT Group would own no less than

2.5% of the issued and outstanding shares of its common shares.

F-14

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 4 – LICENSING AGREEMENT- continued

Breach of Contract Claim

On February 6, 2010, PT Group notified the Company of a purported breach of contract terms, including

a breach of confidentiality, insufficient funding for research and development activities and failure to

provide direct access to our patent attorneys. The license agreement allowed for a ninety day period in

which to cure purported breaches. During the quarter ended March 31, 2010, the Company learned that

PT Group was not the rightful owner of the license and had no rights to grant the license to the Company.

Since PT Group has not remedied the breach in accordance with the Agreement, the Company filed a

legal complaint. (Note 11)

As a result of this discovery, the Company impaired the entire $672,000 book value of the license

agreement.

NOTE 5 – INCOME TAXES

The net operating loss carry-forward and permanent differences are the components of deferred tax

assets for income tax purposes as of June 30, 2011. Approximately $1,467,602 was reduced to zero after

considering the valuation allowance of $1,467,602, since there is no assurance of future taxable income.

The net operating loss carry-forward as of June 30, 2011 expires as follows:

Expiring Year

Amount

2027

6,039

2028

48,195

2029

14,245

2030

1,058,324

2031

340,799

Total

1,467,602

These loss carryovers could be limited under the Internal Revenue Code should a significant change in

ownership occur.

F-15

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 5 – INCOME TAXES

The following is an analysis of deferred tax assets as of June 30, 2011:

Deferred Tax Assets

Valuation Allowance

Balance

Deferred tax assets at June 30, 2010 $

383,113 $

(383,113) $

Additions for the year

115,871

(115,871)

Deferred tax assets at June 30, 2011 $

498,985 $

(498,985) $

The following is reconciliation from the expected statutory federal income tax rate to the Company’s

actual income tax rate for the years ended June 30:

2011

2010

Expected income tax (benefit) at Federal statutory tax rate –34%

$ (408,515) $ (809,423)

Permanent differences

292,644

449,592

Valuation allowance

115,871

359,830

Income tax expense

- $

We currently have three years of tax returns that are subject to examination, based on their filing dates

by taxing authorities. We currently have no uncertainty of the tax positions that we have taken and

believe that we can defend them to any tax jurisdiction.

NOTE 6 – NOTES PAYABLE

On January 5, 2010, the Company received an advance on an interest bearing promissory note of

$100,000 from an unrelated entity. The note is due and payable on January 11, 2011, and bears an interest

rate of 8% per annum. Interest of $8,111 and $3,911 for the years ended June 30, 2011 and 2010,

respectively, has been accrued and is outstanding as of June 30, 2011. Subsequent to year end, this note

was extended to December 12, 2014.

On August 29, 2009, the Company received an advance on an interest bearing promissory note of $10,000

from an unrelated third party. The note was due and payable on February 28, 2010, and bears an interest

rate of 1% per month. On November 17, 2009, we made a principal payment of $5,000. On March 1,

2010, the Company executed a new note for $5,000 to the same unrelated third party. The new note is due

and payable on March 1, 2011, and bears an interest rate of 8% per annum. Interest of $406 and $700 for

the years ended June 30, 2011 and 2010, respectively, has been accrued and is outstanding as of June 30,

2011. Subsequent to year end, this note was extended to January 3, 2015.

F-16

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 6 – NOTES PAYABLE - continued

On June 10, 2010, the Company received an advance on an interest bearing promissory note of $5,983 for

a payment made on behalf of the Company from an unrelated entity. The note is due and payable on June

10, 2011, and bears an interest rate of 8% per annum. Interest of $485 and $27 for the years ended June

30, 2011 and 2010, respectively, has been accrued and is outstanding as of June 30, 2011.On June 18,

2010, the Company received another advance on an interest bearing promissory note of $10,000 in cash

from the same unrelated entity. The note is due and payable on June 18, 2011, and bears an interest rate of

8% per annum. Interest of $811 and $27 for the years ended June 30, 2011 and 2010, respectively, has

been accrued and is outstanding as of June 30, 2011. On June 30, 2010, the Company received an advance

on an interest bearing promissory note of $5,300 for a payment made on behalf of the Company from the

same unrelated entity. The note is due and payable on June 30, 2011, and bears an interest rate of 8% per

annum. Interest of $430 and $-0- for the years ended June 30, 2011 and 2010, respectively, has been

accrued and is outstanding as of June 30, 2011. Subsequent to year end, each of these notes were

extended to January 3, 2015.

On September 20, 2010, the Company received an advance on an interest bearing promissory note of

$25,000 from an unrelated entity. The note is due and payable on September 20, 2011, and bears an

interest rate of 8% per annum. Interest of $1,572 for the year ended June 30, 2011 has been accrued and is

outstanding. Subsequent to year end, this note was extended to January 3, 2015.

NOTE 7 – LOANS FROM SHAREHOLDERS

On February 17, 2010, the Company received an advance on an interest bearing promissory note of

$93,660 in cash and a payment made on behalf of the Company of $5,000 for a total of $98,660 from an

unrelated shareholder. The note is due and payable on February 17, 2011, and bears an interest rate of 8%

per annum. Interest of $8,002 and $2,916 for the years ended June 30, 2011 and 2010, respectively, has

been accrued and is outstanding as of June 30, 2011. On May 6, 2010, the Company received another

advance on an interest bearing promissory note of $35,000 in cash and a payment made on behalf of the

Company of $5,000 for a total of $40,000 from the same shareholder. The note is due and payable on

May 6, 2011, and bears an interest rate of 8% per annum. Interest of $3,244 and $489 for the years ended

June 30, 2011 and 2010, respectively, has been accrued and is outstanding as of June 30, 2011. On July 8,

2010, the Company received another advance on an interest bearing promissory note of $12,000 from the

same shareholder. The note is due and payable on July 8, 2011, and bears an interest rate of 8% per

annum. Interest of $952 for the year ended June 30, 2011 has been accrued and is outstanding.

Subsequent to year end, each of these notes was extended to January 3, 2015.

F-17

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 8 – STOCKHOLDERS' EQUITY

Common Shares – Authorized

The Company has 250,000,000 common shares authorized at a par value of $0.0001 per share and

50,000,000 shares of preferred stock, par value $0.0001 per share. All common stock shares have equal

voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and,

therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all the

directors of the Company. As of June 30, 2011 and 2010, there are no classes of preferred stock

designated and none are outstanding. As of June 30, 2011 and 2010, there are 67,893,000 shares issued

and outstanding.

Common Stock Issuances and Warrants Granted

On July 27, 2009, the Company authorized the issuance of 3,360,000 shares of the Company’s common

stock valued at a price of $0.20 per share for an aggregate consideration of $672,000 to P.T. Group in

connection with the licensing agreement between the Company, its wholly owned subsidiary, and P.T.

Group (see Note 4 and 11).

On September 30, 2009, the Company authorized the issuance of 625,000 shares of the Company’s

common stock to two entities at $0.80 per share for an aggregate consideration of $500,000. No

commission was paid in connection with the issuance. Attached to the shares were warrants to purchase

312,500 shares of common stock at an exercise price of $1.20 per share to the above two entities. These

warrants fully vested on the date of grant. The warrants may be exercised in cash or by certifies check,

bank draft or money order and expire on September 30, 2011. Subsequent to year end, these warrants

expired on September 30, 2011 without being exercised.

On January 18, 2010, the Company entered into a five month consulting agreement for investment and

financial services that called for the consultant to be issued 100,000 shares of common stock valued at

$101,000 as a signing fee. Additional payments were to be negotiated as needed, and the agreement

extended through May 18, 2010. As of June 30, 2010, this agreement was not renewed and we owe no

further amounts.

During the year ended June 30, 2011, there have been no share issuances.

F-18

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 9 – STOCK BASED COMPENSATION

On August 31, 2009, the Company adopted the Company’s 2009, Stock Option Plan (the “Plan”) in an

effort to promote the interests of the Company by providing eligible persons and companies with the

opportunity to acquire or increase a proprietary interest in the Company through the grant of up to five

million (5,000,000) non-statutory stock options (the “Options”) as an incentive for the eligible persons to

continue their employment or service.

On August 31, 2009, the Company authorized the grant of an aggregate of one million eight hundred

thousand (1,800,000) Options with an exercise price of $1.00 per share pursuant to the Plan. This block of

Options vest over a three year period through August 31, 2012, in equal increments of one-third of

potentially exercisable Options each year or in full if involuntarily terminated. Option expense of

$503,698 was recognized during the year ended June 30, 2010 for the vested portion of these options.

During the year ended June 30, 2011, the Company recognized option expense of $839,556 in connection

with the above options.

On November 9, 2009, the Company authorized the grant of an additional one hundred thousand

(100,000) Options with an exercise price of $1.25 per share pursuant to the Plan. This block of Options

vest over a two year period through November 9, 2010, in equal increments of one-half of potentially

exercisable Options each year on the anniversary of the grant. Option expense of $20,948 and $41,896

was recognized during the years ended June 30, 2011 and 2010, respectively, for the vested portion of

these options. In July 2010, 50,000 options of this grant were forfeited upon the termination of the

consultant.

On January 1, 2010, the Company authorized the grant of an additional one hundred thousand (100,000)

Options with an exercise price of $1.25 per share pursuant to the Plan. This block of Options vest over a

two year period through January 1, 2010, in equal increments of 33.33% immediately upon signing of the

agreement, and 33.33% will vest on the anniversary date of January 1, 2011, and the remaining 33.34%

on the anniversary date of January 1, 2012, or in full if involuntarily terminated. Option expense of

$99,727 was recognized during the year ended June 30, 2010 for the vested portion of these options.

During the year ended June 30, 2011, there have been no additional grants of stock options under the

plan.

F-19

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 9 – STOCK BASED COMPENSATION - continued

A summary of the Options granted to employees and others under the Plan and changes since inception of

the Plan is presented below:

Number of

Weighted

Aggregate

Options

Average

Intrinsic Value

Exercise

Price

Balance at July 1, 2009

- $

Options Granted

2,000,000

1.03

2,038,908

Options Exercised

1.00

Options Forfeited or Expired

1.00

Balance at June 30, 2010

2,000,000 $

1.03 $

2,038,908

Exercisable at June 30, 2010

150,000 $

1.07 $

162,571

Weighted average fair value of Options

granted through June 30, 2010

1.02

Number of

Weighted

Aggregate

Options

Average

Intrinsic Value

Exercise

Price

Balance at July 1, 2010

2,000,000 $

1.03 $

2,038,908

Options Granted

Options Exercised

Options Forfeited or Expired

(50,000) $

1.25

(62,844)

Balance at June 30, 2011

1,950,000 $

1.01 $

1,976,064

Exercisable at June 30, 2011

1,149,960 $

1.01 $

1,170,027

Weighted average fair value of Options

granted through June 30, 2011

1.01

F-20

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 9 – STOCK BASED COMPENSATION - continued

The following table summarizes information about stock Options under the Plan that were outstanding at

June 30, 2011:

Outstanding Options

Weighted

Average

Number

Remaining

Weighted

Outstanding

Contractual

Average

Exercise

at June 30,

Life in

Exercise

Intrinsic

Price

2011

Years

Price

Value

1.00

1,800,000

8.25 $

1.00 $ 1,813,493

1.25

150,000

8.40 $

1.25 $

162,572

1,950,000

8.32 $

1.01 $ 1,976,064

Options Exercisable

Number

Weighted

Exercisable

Average

Aggregate

Exercise

at June 30,

Exercise

Intrinsic

Price

2011

Price

Value

1.00

999,960 $

1.00 $

1,007,455

1.25

150,000 $

1.25 $

162,572

1,149,960 $

1.01 $

1,170,027

The total value of employee and non-employee stock Options granted during the years ended June 30,

2011 and 2010 was $-0- and $2,038,909, respectively.

During the years ended June 30, 2011 and 2010, the Company recorded $860,504 and $645,321,

respectively, in stock-based compensation which is included in salaries, payroll taxes, and expenses on

the statements of operations.

At June 30, 2011 there was $470,239 of total unrecognized compensation cost related to stock options

granted under the Plan. That cost is expected to be recognized pro-rata according to the vesting schedules

through January 1, 2012.

F-21

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 10 – RELATED PARTY TRANSACTIONS

Notes payable – related parties

On April 29, 2010, the Company received an advance on a non-interest bearing promissory note of

$8,500 from a related entity. The note is due and payable on demand. On July 15, 2010, the Company

repaid $4,000 of the balance of this note. The remaining balance of $4,500 is outstanding as of June 30,

2011 for which the Company has not yet received a demand.

On May 2, 2011, the Company received an advance on an interest bearing promissory note of $7,100

from a related entity. The note is due and payable on June 2, 2012, and bears an interest rate of 8% per

annum. Interest of $93 for the year ended June 30, 2011 has been accrued and is outstanding. Subsequent

to year end, this note was extended to January 3, 2015.

Consulting Agreements

On October 1, 2009, the Company entered into a consulting agreement with Prosper Financial, Inc., a

company owned by the spouse of the Company’s President and Chief Executive Officer and 37% owner

of the Company. The agreement calls for monthly payments of $2,500 for consulting services rendered

and $1,200 per month in rental payments for the use of Prosper Financial, Inc.’s office space. The

agreement extends through October 31, 2010, and was extended after that on a month to month basis for

the consulting services. As of June 30, 2011 and 2010, this related party had a balance due of $ 26,064

and $2,500, respectively, and is reflected in accounts payable – related parties.

On August 1, 2009, the Company entered into a consulting agreement with a director and officer that calls

for monthly compensation of $7,500 and extended through December 31, 2009, after which became a

month to month basis. As of June 30, 2011 and 2010, this related party had a balance due of $101,706 and

$17,206, respectively, which is reflected in accounts payable – related parties.

On July 1, 2009, the Company entered into a consulting agreement with a shareholder, director and

officer of the Company that calls for an annual base fee of $96,000 and extends through June 30, 2010,

after which was continued on a month to month basis. As of June 30, 2011, this related party had a total

balance due of $150,969, comprised of $137,350 due for consulting fees, and $13,619 for business

expenses, all of which is reflected in accounts payable – related parties. As of June 30, 2010, this related

party had a total balance due of $60,584, comprised of $49,350 due for consulting fees, and $11,234 for

business expenses, all of which is reflected in accounts payable – related parties.

On October 1, 2009, the Company entered into a consulting agreement with the former Head of Research

that calls for monthly compensation of $6,000 and extends through December 31, 2009, this contract was

not renewed or extended. As of June 30, 2011 and 2010, this related party had a balance due of $1,840,

which is reflected in accounts payable – related parties.

F-22

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 10 – RELATED PARTY TRANSACTIONS - continued

Consulting Agreements - continued

On October 1, 2009, the Company entered into an agreement with a consultant to provide bookkeeping

services, the monthly compensation is $5,000 and extended through October 1, 2010, in addition, the

consultant shall be entitled to 100,000 incentive stock options upon signing, and extended through

October 1, 2010. On April 1, 2010, we entered into a new agreement with the same consultant, the

monthly compensation was amended to be $2,500 per month, all other terms remained the same, and

extended through April 1, 2011, this contract was not renewed or extended. As of June 30, 2011 and

2010, this related party had a balance due of $25,000 and $2,500, respectively, which is reflected in

accounts payable – related parties.

On December 1, 2009, the Company entered into a consulting agreement with the son of our current

president to provide business consulting services that called for monthly compensation of $2,000 that

extended through November 30, 2010, this contract was not renewed or extended. As of June 30, 2011

and 2010, this related party had a balance due of $9,000, which is reflected in accounts payable – related

parties.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

Contingencies

On February 6, 2010, PT Group notified the Company of a purported breach of contract terms including a

breach of confidentiality, insufficient funding for research and development activities and failure to

provide direct access to our patent attorneys. The licensing agreement allows for a ninety day period in

which to cure purported breaches. The Company’s management and board of directors have reason to

believe that PT Group may not be the rightful owner of the intellectual property licensed under the

licensing agreement. (Note 4)

On March 8, 2010, the Company filed a complaint in the Circuit Court of the 11^th Judicial Court In and

For Miami-Dade County, Florida against Paul R. Leonard and PT Group in connection with a breach of

the licensing agreement dated July 27, 2009. The complaint seeks: (i) damages for fraud that stem from

reliance on PT Group's claim of ownership over certain proprietary information, (ii) the return of

Company shares issued to PT Group as compensation for the rights licensed, (iii) injunctive relief sought

to prohibit Mr. Leonard’s use of confidential information to which he is not entitled, and (iv) reasonable

attorney’s fees. Mr. Leonard responded to the complaint in an answer dated November 19, 2012 asserting

that had no knowledge of the subject matter of the suit. The Company has been unable to serve PT Group

to date. Should the relief sought be adjudicated, Sonnen expects to succeed on the merits of its claims.

F-23

SONNEN CORPORATION AND SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended June 30, 2011 and 2010

NOTE 12– SUBSEQUENT EVENTS

In accordance with Accounting Standards Codification (ASC) topic 855-10 “Subsequent Events”, the

Company has evaluated subsequent events through the date which the financial statements were available

to be issued. The Company has determined that there were no such events that warrant disclosure or

recognition in the financial statements, other than these below:

Note payables extensions

Subsequent to year end, all of the Company’s notes payable’s due dates were extended as discussed above

in Note 8.

Stock options

On December 31, 2012, all outstanding vested options had expired in accordance with the terms of their

respective stock option agreements or rescinded by mutual agreement between the Company and the

respective holders.

F-24

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

There have not been any changes in or disagreements with accountants on accounting and financial

disclosure or any other matter.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this annual report, an evaluation was carried out by Sonnen’s

management, with the participation of the chief executive officer and the chief financial officer, of the

effectiveness of Sonnen’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the

Securities Exchange Act of 1934 (“Exchange Act”)) as of June 30, 2011. Disclosure controls and

procedures are designed to ensure that information required to be disclosed in reports filed or submitted

under the Exchange Act is recorded, processed, summarized, and reported within the time periods

specified in the Commission’s rules and forms, and that such information is accumulated and

communicated to management, including the chief executive officer and the chief financial officer, to

allow timely decisions regarding required disclosures.

Based on that evaluation, Sonnen’s management concluded, as of the end of the period covered by this

report, that Sonnen’s disclosure controls and procedures were ineffective in recording, processing,

summarizing, and reporting information required to be disclosed, within the time periods specified in the

Commission’s rules and forms, and such information was not accumulated and communicated to

management, including the chief executive officer and the chief financial officer, to allow timely

decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

The management of Sonnen is responsible for establishing and maintaining adequate internal control over

financial reporting. Sonnen’s internal control over financial reporting is a process, under the supervision

of the chief executive officer and the chief financial officer, designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of Sonnen’s financial statements for

external purposes in accordance with United States generally accepted accounting principles (GAAP).

Internal control over financial reporting includes those policies and procedures that:

 Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of Sonnen’s assets;

 Provide reasonable assurance that transactions are recorded as necessary to permit preparation of

the financial statements in accordance with generally accepted accounting principles, and that

receipts and expenditures are being made only in accordance with authorizations of management

and the board of directors; and

 Provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use, or disposition of Sonnen’s assets that could have a material effect on the

financial statements.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk

that controls may become inadequate because of changes in conditions or that the degree of compliance

with the policies or procedures may deteriorate.

Sonnen’s management conducted an assessment of the effectiveness of our internal control over financial

reporting as of June 30, 2011, based on criteria established in Internal Control – Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission, which assessment

identified material weaknesses in internal control over financial reporting. A material weakness is a

control deficiency, or a combination of deficiencies in internal control over financial reporting that creates

a reasonable possibility that a material misstatement in annual or interim financial statements will not be

prevented or detected on a timely basis. Since the assessment of the effectiveness of our internal control

over financial reporting did identify material weaknesses, management considers its internal control over

financial reporting to be ineffective.

Sonnen identified the following material weakness:

Lack of Appropriate Independent Oversight. The board of directors was not providing an appropriate

level of oversight of Sonnen’s consolidated financial reporting and procedures for internal control over

financial reporting as of June 30, 2011 since there no independent directors who might provide an

appropriate level of oversight including challenging management’s accounting for and reporting of

transactions. Our lack of appropriate independent oversight over the period was a material weakness due

to the interested nature of those individuals who comprise our board of directors. Our lack of appropriate

independent oversight has been a material weakness since the annual period ended June 30, 2009 through

the annual period of this report. While this control deficiency did not result in any audit adjustments to

our 2011 or 2010 interim or annual financial statements, it could have resulted in material misstatements

that might have been prevented or detected by independent oversight. Accordingly we determined that

this control deficiency as of June 30, 2011 constituted a material weakness.

Sufficiency of Accounting Resources. Sonnen has no dedicated accounting personnel to prepare its

financial statements, including the consolidation of Sonnen and its subsidiaries in a timely manner

contemporaneously with the periods reported. Rather, Sonnen relies on independent engagements to

compile accounting information. The insufficiency of our accounting resources has been a material

weakness since the annual period ended June 30, 2009 through the annual period of this report. While this

control deficiency did not result in any audit adjustments to our 2011 or 2010 interim or annual financial

statements, it did result in certain delays in the consolidation of Sonnen and its subsidiaries for periodic

reporting purposes. Accordingly, we determined that this control deficiency as of June 30, 2011

constituted a material weakness.

Remediation Initiatives

Since the end of the reporting period management has determined to appoint additional directors to

Sonnen’s board of directors and to engage an independent accountant on a consistent basis to ensure its

capability to remain current in its periodic reporting obligations. The appointment of independent

directors and the engagement of an accountant on an ongoing basis remain subject to Sonnen’s ability to

secure sufficient financial resources to complete these objectives.

This annual report does not include an attestation report of our independent registered public accounting

firm regarding internal control over financial reporting. We were not required to have, nor have we,

engaged our independent registered public accounting firm to perform an audit of internal control over

financial reporting pursuant to the rules of the Commission that permit us to provide only management’s

report in this annual report.

Changes in Internal Controls over Financial Reporting

During the period ended June 30, 2011, there has been no change in internal control over financial

reporting that has materially affected, or is reasonably likely to materially affect our internal control over

financial reporting.

Subsequent to the period and to the date of this filing, there has been no change in internal control over

financial reporting that has materially affected, or is reasonably likely to materially affect our internal

control over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the name, age and position of each director and executive officer of the

Sonnen:

Name

Age

Year Appointed Position(s) and Office(s)

Robert Miller

2009

President, chief executive officer and

director.

Costas Takkas

2009

Chief financial officer, principal

accounting officer and director

Business Experience

The following is a brief account of the business experience of our directors, executive officers, and other

significant employees, including their background occupations and employment over the past five years.

We also provide the responsibilities and qualifications of our executive officers and other significant

employees and the qualifications of our directors. Except as otherwise noted, none of the following

referenced organizations are affiliates of Sonnen.

Robert Miller was appointed as a member of the board of directors on June 16, 2009, and as president and

chief executive officer on July 27, 2009.

Background:

From 2007 until the present Mr. Miller has been a director (and was an early investor) of Lifespan

Biosciences Inc., a company commercializing proprietary antibodies, providing immune histochemistry

services and developing localization databases. Since 2009 he has served as an officer and director of

Sonnen Corporation, a company involved in the research and development of a novel process for energy

generation consisting of specific materials and proprietary material combinations. (Mr. Miller is

the beneficial owner of more than five percent of Sonnen’s common stock.) From 2002 to present, Mr.

Miller has been a consultant to Prosper Financial, Inc., a management company that provides financial

and corporate consulting services to start-up companies. Between 1998 and 2000 he was a director and

financier of Zmax Corporation, a "y2k" company. From 1997 to 2002 Mr. Miller was the president of

Stamford International whose principal subsidiary, Nanovation Technologies Inc., was a developer of

nano-sized fiber-optic products and he served as director of Nanovation between 1998 and 2001. In 1992

Mr. Miller was the founder and president of Crystallex International Corporation and he served as the

company’s Chairman between 1992 and 1996. Between 1988 and 1992 he was the principal financier and

consultant to Asiamerica Equities Inc., a NASDAQ listed merchant bank.

Officer and Director Responsibilities and Qualifications:

Mr. Miller is responsible for the overall management of Sonnen and is involved in many of its day-to-day

operations. He is Sonnen’s primary leader, communicator and fundraiser.

Mr. Miller has worked as officer and director of many early-stage companies for almost three decades and

has participated as the principal investor in over 50 business ventures. He has founded corporations, listed

numerous companies on the NASDAQ and the Toronto Stock Exchange, worked full-time with and as a

consultant to numerous startups.

Other Public Company Directorships in the Last Five Years:

Mr. Miller has been a director of Abakan, Inc. since 2009.

Costas Takkas was appointed as a member of the board of directors on July 27, 2009, and as chief

financial officer and principal accounting officer on July 27, 2009.

Background:

Mr. Takkas brings to Sonnen over 25 years of financial experience and expertise. He has acted as a

director and officer of numerous development-stage public companies involved with projects in the

technology, mining, construction, gaming, drug development and medical equipment industries. Mr.

Takkas is a member of the Institute of Chartered Accountants in England & Wales (ACA).

Officer and Director Responsibilities and Qualifications:

Mr. Costas is responsible for those functions typically associated with a chief financial officer and is

involved in the day to day operation of Sonnen.

Mr. Costas graduated with a B.Sc. (Honors) in Physics and an Associate Royal College of Science

(ARCS) from the Imperial College of Science and Technology, University of London in 1978.

Other Public Company Directorships in the Last Five Years:

None.

Term of Office

Our directors are appointed for one year terms to hold office until the next annual meeting of our

shareholders or until removed from office in accordance with our bylaws. Our executive officers are

appointed by our board of directors and hold office pursuant to employment agreements or until removed

by the board.

Family Relationships

There are no family relationships between or among the directors or executive officers.

Involvement in Certain Legal Proceedings

During the past ten years there are no events that occurred related to an involvement in legal proceedings

that are material to an evaluation of the ability or integrity of any of the Company’s directors, persons

nominated to become directors or executive officers.

Compliance with Section 16(A) of the Exchange Act

Based solely upon a review of Forms 3, 4 and 5 furnished to Sonnen, we are not aware of any persons

who, during the period ended June 30, 2011, failed to file, on a timely basis, reports required by Section

16(a) of the Securities Exchange Act of 1934.

Code of Ethics

Sonnen has not adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the

Securities Exchange Act of 1934. The Code of Ethics applies to directors and senior officers, such as the

principal executive officer, principal financial officer, controller, and persons performing similar

functions. Sonnen expects to adopt a Code of Ethics in the near future.

Board of Directors Committees

The board of directors has not established an audit committee. An audit committee typically reviews, acts

on and reports to the board of directors with respect to various auditing and accounting matters, including

the recommendations and performance of independent auditors, the scope of the annual audits, fees to be

paid to the independent auditors, and internal accounting and financial control policies and procedures.

Certain stock exchanges currently require companies to adopt a formal written charter that establishes an

audit committee that specifies the scope of an audit committee’s responsibilities and the means by which

it carries out those responsibilities. In order to be listed on any of these exchanges, the Sonnen will be

required to establish an audit committee. The board of directors has not established a compensation

committee. We intend to establish both an audit and compensation committee at such time as sufficient

independent directors join our board of directors.

Director Compensation

Directors currently are reimbursed for out-of-pocket costs incurred in attending meetings but are not

compensated for their service as directors. Sonnen may compensate directors in the future.

ITEM 11.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Sonnen currently has no agreement for services rendered with its chief executive officer as an

employment agreement dated January 1, 2010 was terminated by mutual agreement on May 15, 2010.

Since then our chief executive officer has served without compensation. He expects to continue to serve

without compensation until such time as Sonnen is able to normalize operations upon which he expects to

enter into a new employment agreement that will include a salary, stock options and other compensatory

elements. Our board of directors does not believe that operating without an employment agreement with

its chief executive officer is appropriate for a development stage company though such arrangement will

remain in place until future financings include sufficient funding to ensure adequate compensation for

Sonnen’s officers.

Sonnen currently has no agreement for services rendered with its chief financial officer and principal

accounting officer as an employment agreement dated July 1, 2009 was terminated by mutual agreement

on May 15, 2010. Since then our chief financial officer has served without compensation. Like our chief

executive officer, he expects to continue to serve without compensation until such time as Sonnen is able

to normalize operations upon which he expects to enter into a new employment agreement that will

include a salary, stock options and other compensatory elements. Our board of directors does not believe

that operating without an employment agreement with its chief financial officer is appropriate for a

development stage company though such arrangement will remain in place until future financings include

sufficient funding to ensure adequate compensation for Sonnen’s officers.

Executive compensation paid to or accrued to our chief executive officer for the year ended June 30, 2011

was $0 as compared to $617,310 for the year ended June 30, 2010 and $0 for the year ended June 30,

2009. The volatility in executive compensation over the comparative periods can be attributed to

termination of our chief executive’s employment agreement toward the end of our fiscal year 2010 and

the contemporaneous suspension of research and development activities. Executive compensation paid to

our chief executive officer in the 2010 period was comprised of salary of $31,500, related consulting fees

and lease payments of $82,056 and the beneficial ownership of 500,000 stock options valued at $503,754.

Executive compensation paid to or accrued to our chief financial officer for the year ended June 30, 2011

was $0 as compared to $611,538 for the year ended June 30, 2010 and $0 for the year ended June 30,

2009. The volatility in executive compensation over the comparative periods can be attributed to

termination of our chief financial officer’s employment agreement toward the end of our fiscal year 2010

and the contemporaneous suspension of research and development activities. Executive compensation

paid to our chief financial officer in the 2010 period was comprised of consulting fees of $96,000 and

reimbursement for medical expenses of $11,784 and the beneficial ownership of 500,000 stock options

valued at $503,754.

Tables

The following table provides summary information for the fiscal years ended June 30, 2010, 2009, and

2008 concerning cash and non-cash compensation paid or accrued by Sonnen to or on behalf of (i) the

chief executive officer and (ii) any other employee to receive compensation in excess of $100,000.

Executive’s Summary Compensation Table

Name and

Year

Salary

Bonus

Stock

Option

Non-Equity

Change in

All Other

Total

Principal

($)

Awards

Incentive Plan Pension Value

Compensation

($)

Position

($)

Compensation

and

($)

Nonqualified

Deferred

Compensation

($)

Robert Miller:

2011

CEO, and

2010

31,500¹

503,754³

82,056²

617,310

director

2009

Costas Takkas: 2011

former CFO,

2010

503,754⁴

107,784⁵

611,538

PAO and

2009

director⁶

(1) Robert Miller’s employment agreement was terminated effective May 15, 2010.

(2) Prosper Financial, Inc., an entity related to Robert Miller, was paid for consulting services and the use of office space.

(3) Robert Miller was the beneficial owner of 500,000 options held by Prosper Financial, Inc. which have since been cancelled.

(4) Costas Takkas was the direct owner of 500,000 options which have since been cancelled.

(5) Costas Takkas was paid for consulting services amounting to $96,000 and reimbursed for medical expenses of $11,784.

2009 Stock Option Plan

Our board of directors adopted and approved our 2009 Stock option Plan (“Plan”) on August 31, 2009,

which provides for the granting and issuance of up to 5 million shares of our common stock. As of June

30, 2011, we had granted options to purchase 2,000,000 shares of common stock of which 1,800,000

had an exercise prices of $1.00, and 200,000 had an exercise price of $1.25, all of which vest over three

years in equal increments. At June 30, 2011, 3,000,000 options remained available for future grant.

Our board of directors administers our Plan, however, they may delegate this authority to a committee

formed to perform the administration function of the Plan. The board of directors or a committee of the

board has the authority to construe and interpret provisions of the Plan as well as to determine the terms

of an award. Our board of directors may amend or modify Plan at any time. However, no amendment or

modification shall adversely affect the rights and obligations with respect to outstanding awards unless

the holder consents to that amendment or modification.

The Plan permits us to grant non-statutory stock options to our employees, directors and consultants.

The options issued under this Plan are intended to be non-statutory stock options exempt from Code

Section 409A. The duration of a stock option granted under our Plan cannot exceed ten years. The

exercise price of an incentive stock option cannot be less than 100% of the fair market value of the

common stock on the date of grant.

The Plan administrator determines the term of stock options granted under our Plan, up to a maximum

of ten years, except in the case of certain events, as described below. Unless the terms of an optionee's

stock option agreement provide otherwise, if an optionee's relationship with us ceases for any reason

other than disability or death, the optionee may exercise any vested options for a period of ninety days

following the cessation of service. If an optionee's service relationship with us ceases due to disability or

death the optionee or a beneficiary may exercise any vested options for a period of 12 months in the

event of disability or death.

Unless the Plan administrator provides otherwise, options generally are not transferable except by will,

the laws of descent and distribution, or pursuant to a domestic relations order. An optionee may

designate a beneficiary, however, who may exercise the option following the optionee's death.

Long Term Incentive Plan Awards

Sonnen has no long-term incentive plans.

Termination of Employment and Change in Control Arrangements

Sonnen has no agreement that provides for payment to any executive officer at, following, or in

connection with resignation, retirement or other termination, or a change in control, or a change in our

executive officers’ responsibilities following a change in control.

The following table provides summary information for the fiscal year ended June 30, 2011 concerning

unexercised options, stock that has not vested, and equity incentive plan awards by Sonnen to or on behalf

of (i) the chief executive officer and (ii) any other employee to receive compensation in excess of

$100,000:

Outstanding Equity Awards at Fiscal Year-End

Option awards

Stock awards

Equity

incentive

Equity

plan

incentive

awards:

plan awards:

plan

Market

number of

market or

awards:

Number value of

unearned

payout value

Number of

number of

of shares

shares,

of unearned

securities

or units

units or

shares, units

underlying

of stock

other

or other

unexercised

Option

that have

that

rights that

options

unearned

exercise

Option

not

have not

(#)

options

price

expiration

vested

Name

exercisable unexercisable

(#)

($)

date

(#)

($)

Robert

Miller₁

166,667

500,000

333,333

1.00

August

31, 2019

Costas

Takkas

166,667

500,000

333,333

1.00

August

31, 2019

(1) Robert Miller is a beneficial owner of 500,000 options held by Prosper Financial, Inc.

The following table provides summary information for the year ended December 31, 2011 concerning

cash and non-cash compensation paid or accrued by Sonnen to or on behalf of its directors.

Name

Fees earned

Stock

Option

Non-equity

Non-qualified

All other

Total

or paid in

awards

Awards

incentive plan

deferred

compensation

cash

compensation

Robert

Miller

Costas

Takkas

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information concerning the ownership of Sonnen’s 67,893,000

shares of common stock issued and outstanding as of February 22, 2013 with respect to: (i) all directors;

(ii) each person known by us to be the beneficial owner of more than five percent of our common stock;

and (iii) our directors and executive officers as a group.

Title of Class Name and Address of Beneficial Amount and nature

Percent of Class

Ownership

of Beneficial

Ownership¹

Common

Robert Miller

Stock

4801 Alhambra Circle

25,000,000²

37%

Coral Gables, Florida 33146

Costas Takkas

Common

105 Marbel Drive

Stock

P.O. Box 1436 GT

16,000,000³

23%

Grand Cayman, Cayman Islands

British West Indies

Common

All Executive Officers and

Stock

Directors as a Group

41,000,000

60%

(1) Beneficial ownership is determined in accordance with Commission rules and generally includes voting or

investment power with respect to securities. Shares of common stock subject to options, warrants and convertible

preferred stock currently exercisable or convertible, or exercisable or convertible within sixty (60) days, would be

counted as outstanding for computing the percentage of the person holding such options or warrants but not

counted as outstanding for computing the percentage of any other person.

(2) Robert Miller is a beneficial owner of 25,000,000 shares held by Ms. Maria Maz, to whom Mr. Miller is married

and 500,000 options held by Prosper Financial, Inc., an entity owned by Ms. Maz, that vest in equal increments

over three years to purchase shares of common stock at $1.00 per share on or before August 31, 2019.

(3) Costas Takkas was granted 500,000 options that vest in equal increments over three years to purchase shares of

common stock at $1.00 per share on or before August 31, 2019.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

None of our directors or executive officers, nor any proposed nominee for election as a director, nor any

person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights

attached to all of our outstanding shares, nor any members of the immediate family (including spouse,

parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or

indirect, in any transaction in the period covered by this report or in any presently proposed transaction

which, in either case, has or will materially affect us.

Director Independence

Our common stock is listed on the OTC Link inter-dealer quotation system, which does not have director

independence requirements. For purposes of determining director independence, we have applied the

definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not

considered to be independent if he or she is also an executive officer or employee of the corporation.

Accordingly, we had no independent directors as of June 30, 2011.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Matinelli Mick PLLC (“Martinelli”) and Behler Mick PS (“Behler”) have provided audits of our annual

financial statements and a review of our quarterly financial statements for the periods ended June 30,

2011 and June 30, 2010 respectively. The following is an aggregate of fees billed during each of the last

fiscal years for professional services rendered by each of our principal accountants.

Martinelli Mick Fees and Services

2011

Audit fees

Audit-related fees

Tax fees

All other fees

Total fees paid or accrued to our principal accountants

Behler Mick PS

2010

Audit fees

19,054

Audit-related fees

Tax fees

All other fees

Total fees paid or accrued to our principal accountants

19,054

Audit Committee Pre-Approval

Sonnen did not have a standing audit committee at the time its respective auditors were engaged.

Therefore, all services provided to Sonnen by Martinelli and Behler, as detailed above, were pre-approved

by Sonnen’s board of directors. Martinelli and Behler performed all work only with their permanent full

time employees.

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements

The following documents are filed under “Item 8. Financial Statements and Supplementary Data,” pages

F-1 through F-24, and are included as part of this Form 10-K:

Financial Statements of Sonnen for the years ended June 30, 2011 and 2010:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Loss

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(b) Exhibits

The exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on

page 28 of this Form 10-K, and are incorporated herein by this reference.

(c) Financial Statement Schedules

We are not filing any financial statement schedules as part of this Form 10-K because such schedules are

either not applicable or the required information is included in the financial statements or notes thereto.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant

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

Sonnen Corporation

Date

/s/ Robert Miller

March 19, 2013

By: Robert Miller

Its: President, Chief Executive Officer and Director

/s/ Costas Takkas

March 19, 2013

By: Costas Takkas

Its: Chief Financial Officer, Principal Accounting Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by

the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date

/s/ Robert Miller

March 19, 2013

Robert Miller

President, Chief Executive Officer and Director

/s/ Costas Takkas

March 19, 2013

Costas Takkas

Chief Financial Officer, Principal Accounting Officer and Director

INDEX TO EXHIBITS

Exhibit

Description

3.1.1*

Articles of Incorporation, incorporated by reference to the Company’s Form SB-2 filed with the Commission

on August 6, 2007.

3.1.2*

Amendment to the Articles of Incorporation, incorporated by reference to the Company’s Definitive 14C

filed with the Commission on October 14, 2009.

3.2*

Bylaws, incorporated by reference to the Company’s Form SB-2 filed with the Commission on August 6,

2007.

10.1*

Licensing Agreement between the Company, the Company’s wholly owned subsidiary, and P.T. Group, Ltd.,

dated July 27, 2009, incorporated by reference to the Company’s Form 10-K filed with the Commission on

August 3, 2009.

10.2*

Consulting Agreement between the Company and Costas Takkas, dated July 27, 2009, incorporated by

reference to the Company’s Form 10-K filed with the Commission on August 3, 2009.

10.3*

Employment Agreement between the Company and Paul Leonard dated July 27, 2009, incorporated by

reference to the Company’s Form 10-K filed with the Commission on August 3, 2009.

10.4*

Employment Agreement between the Company and David Greenbaum dated August 1, 2009, incorporated by

reference to the Company’s Form 10-Q filed with the Commission on November 23, 2009.

10.5*

Consulting Agreement between the Company and Carol Laws dated August 1, 2009, incorporated by

reference to the Company’s Form 10-Q filed with the Commission on November 23, 2009.

10.6*

Consulting Agreement between the Company and Backend Technologies, LLC dated August 5, 2009,

incorporated by reference to the Company’s Form 10-Q filed with the Commission on November 23, 2009.

10.7*

Employment Agreement between the Company and Robert H. Miller dated January 1, 2010, incorporated by

reference to the Company’ Form 10-Q filed with the Commission on November 23, 2010.

21*

Subsidiaries of the Company, incorporated by reference to the Company’s Form 10-K filed with the

Commission on August 3, 2009.

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act as adopted pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act as adopted pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (attached).

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (attached).

101. INS

XBRL Instance Document^†

101. PRE

XBRL Taxonomy Extension Presentation Linkbase^†

101. LAB

XBRL Taxonomy Extension Label Linkbase^†

101. DEF

XBRL Taxonomy Extension Label Linkbase^†

101. CAL

XBRL Taxonomy Extension Label Linkbase^†

101. SCH

XBRL Taxonomy Extension Schema^†

Incorporated by reference to previous filings of Allied.

^†

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not

“filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the

Securities Act of

1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934,

and otherwise is not subject to liability under these

sections.

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