UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
[X]
QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended March 31, 2013
or
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ____________ to _______________
Commission
File No. 000-14859
GARB
OIL & POWER CORPORATION
(Exact
name of registrant as specified in its charter)
| Utah |
|
87-0296694 |
| (State
or other jurisdiction of |
|
(I.R.S.
Employer |
| incorporation
or organization) |
|
Identification.
No.) |
| |
|
|
| 1185
Gooden Xing |
|
|
| Largo,
FL |
|
33778 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
| |
|
|
| Registrant’s
Telephone Number, Including Area Code: (888) 573-6622 |
Indicate
by checkmark 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 [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ]
No [X]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer [ ] |
Accelerated filer [ ] |
| Non-accelerated filer [ ] |
Smaller reporting company [X] |
| (Do not check if a smaller reporting
company) |
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes [ ] No [X]
The number
of shares of issuer’s common stock outstanding as of March 9, 2015: 47,497,578,456.
FORM
10-Q
FOR
THE THREE MONTHS ENDED MARCH 31, 2013
INDEX
USE
OF CERTAIN DEFINED TERMS
Except
as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “our
Company,” “the Company”, or “Garb” are to the combined business of Garb Oil & Power Corporation
and its consolidated subsidiaries.
In
addition, unless the context otherwise requires and for the purposes of this report only:
| |
● |
“Commission”
refers to the Securities and Exchange Commission; |
| |
|
|
| |
● |
“Exchange
Act” refers to the Securities Exchange Act of 1934, as amended; |
| |
|
|
| |
● |
“Securities
Act” refers to the Securities Act of 1933, as amended; |
| |
|
|
| |
● |
“former
management” refers to following individuals, who collectively represent all of the Company’s directors and executive
officers that resigned on August 21, 2013: |
| |
● |
John
Rossi is the Company’s former Chief Executive Officer, President, Director, Principal Financial Officer and Principal
Accounting Officer, |
| |
|
|
| |
● |
Igor
Plahuta is the Company’s former Chief Technology Officer and Director, |
| |
|
|
| |
● |
Alan
Fleming is the Company’s former Chief Operations Officer and Director; and |
| |
● |
“current
management” or “management of the Company” or “management” refers to the following individuals,
who represent the directors and executive officers of the Company as of the date of this quarter report on Form 10-Q, and
those officers and directors that were appointed on August 21, 2013, after former management resigned: |
| |
● |
Tammy
Taylor is the Company’s current Chief Executive Officer, President, Director and Principal Financial Officer, |
| |
|
|
| |
● |
M.
Aimee Coleman is current Corporate Secretary and Principal Accounting Officer. |
CAUTIONARY
STATEMENT RELATED TO FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements. The Securities and Exchange Commission encourages companies to disclose forward-looking
information so that investors can better understand a company’s future prospects and make informed investment decisions.
This quarterly report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking
statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance.
We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” “will”
and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include
statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome
of contingencies, such as legal proceedings, and financial results. A list of factors that could cause our actual results of operations
and financial condition to differ materially is set forth below:
| |
● |
Our
ability to continue as a going concern. |
| |
|
|
| |
● |
Our
ability to achieve profitability and history of losses. |
| |
|
|
| |
● |
Our
need for significant additional capital to fund our business plan. |
| |
|
|
| |
● |
Our
ability to attract customers to our products. |
| |
|
|
| |
● |
Economic
conditions that have an adverse effect on consumer and corporate spending. |
| |
|
|
| |
● |
Changes
in applicable Federal and State manufacturing laws and regulations that have an adverse effect on our operations. |
| |
|
|
| |
● |
The
market price for shares of our common stock has been and may continue to be highly volatile and the impact of penny stock
rules on the liquidity of our common stock. |
We
caution that the factors described herein and other factors could cause our actual results of operations and financial condition
to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue
reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such
statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.
New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess
the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements.
PART
I – FINANCIAL INFORMATION
Item
1. Financial Statements
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Balance Sheets
| | |
March 31, 2013 | | |
December 31, 2012 | |
| | |
(Unaudited) | | |
| |
| ASSETS | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash | |
$ | 4,698 | | |
$ | 3 | |
| Accounts receivable, net | |
| - | | |
| - | |
| Total current assets | |
| 4,698 | | |
| 3 | |
| Property and equipment, net | |
| - | | |
| 3,886 | |
| | |
| | | |
| | |
| Total assets | |
$ | 4,698 | | |
$ | 3,889 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 754,423 | | |
$ | 819,677 | |
| Related party payable | |
| 276,470 | | |
| 290,519 | |
| Notes payable | |
| 1,476,818 | | |
| 1,892,737 | |
| Accrued interest | |
| 1,364,478 | | |
| 1,420,243 | |
| Wage and payroll taxes payable | |
| 2,169,287 | | |
| 2,004,498 | |
| Income taxes payable | |
| 119,915 | | |
| 123,619 | |
| Total current liabilities | |
| 6,161,391 | | |
| 6,551,293 | |
| Deferred tax liabilities | |
| 15,756 | | |
| 16,243 | |
| Total long-term liabilities | |
| 15,756 | | |
| 16,243 | |
| | |
| | | |
| | |
| Total liabilities | |
| 6,177,147 | | |
| 6,567,536 | |
(Continued
next page)
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Balance Sheets
(Continued)
| | |
March
31, 2013 | | |
December
31, 2012 | |
| | |
(Unaudited) | | |
| |
| Stockholders’
Deficit: | |
| | | |
| | |
| Class A preferred as of March 31,
2013; ($.0001 par value) 1,000,000 shares authorized, 7 shares outstanding as of March 31, 2013 and 7 shares outstanding as
of December 31, 2012 | |
| - | | |
| - | |
| Class B preferred as of
March 31, 2013; ($2.50 par value) 10,000,000 shares authorized, 4,494,298 shares outstanding as of March 31, 2013 and 2,694,298
shares issued and outstanding as of December 31, 2012 | |
| 11,235,745 | | |
| 6,735,745 | |
| Common stock as of March 31, 2013;
(no par value) 50,000,000,000 shares authorized, 32,146,744,154 shares outstanding at March 31, 2013 and 45,483,744,154 shares
outstanding at December 31, 2012 | |
| (18,343,744 | ) | |
| (18,823,864 | ) |
| Preferred Class
A additional paid in capital | |
| 471,760 | | |
| 471,760 | |
| Preferred Class
B additional paid in capital | |
| 14,867,005 | | |
| 19,366,825 | |
| Accumulated other
comprehensive income | |
| 167,228 | | |
| 143,297 | |
| Accumulated
deficit | |
| (14,536,040 | ) | |
| (14,423,007 | ) |
| Total
Garb Oil & Power stockholders’ deficit | |
| (6,138,046 | ) | |
| (6,529,244 | ) |
| Non-controlling
interest | |
| (34,403 | ) | |
| (34,403 | ) |
| Total
stockholders’ deficit | |
| (6,172,449 | ) | |
| (6,563,647 | ) |
| Total
liabilities and stockholders’ deficit | |
$ | 4,698 | | |
$ | 3,889 | |
See
accompanying notes to the consolidated unaudited financial statements.
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
| | |
Three
Months Ended March 31, | |
| | |
2013 | | |
2012 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| OPERATING EXPENSES | |
| | | |
| | |
| Selling, general and administrative | |
$ | 369,531 | | |
$ | 808,233 | |
| Total Operating Expenses | |
| 369,531 | | |
| 808,233 | |
| | |
| | | |
| | |
| LOSS FROM OPERATIONS | |
| (369,531 | ) | |
| (808,233 | ) |
| | |
| | | |
| | |
| OTHER INCOME (EXPENSE) | |
| | | |
| | |
| Gain (loss) on extinguishment of debt | |
| 332,880 | | |
| (101,282 | ) |
| Gain on disposal of assets | |
| (3,886 | ) | |
| (2,621 | ) |
| Interest expense | |
| (72,496 | ) | |
| (183,721 | ) |
| Total Other Income (Expense) | |
| 256,498 | | |
| (287,624 | ) |
| LOSS BEFORE INCOME TAXES | |
| (113,033 | ) | |
| (1,095,857 | ) |
| PROVISION (BENEFIT) FOR INCOME TAXES | |
| - | | |
| - | |
| | |
| | | |
| | |
| LOSS BEFORE NON-CONTROLLING INTEREST | |
| (113,033 | ) | |
| (1,095,857 | ) |
| Net Income (loss) attributable to non-controlling interest | |
| - | | |
| - | |
| LOSS ATTRIBUTABLE TO GARB OIL & POWER | |
| (113,033 | ) | |
| (1,095,857 | ) |
| | |
| | | |
| | |
| OTHER COMPREHENSIVE INCOME (LOSS) | |
| | | |
| | |
| Foreign currency translation adjustment | |
| - | | |
| - | |
| | |
| | | |
| | |
| TOTAL COMPREHENSIVE LOSS | |
| (113,033 | ) | |
| (1,095,857 | ) |
| Comprehensive income (loss) attributable to non-controlling interest | |
| - | | |
| - | |
| COMPREHENSIVE LOSS ATTRIBUTABLE TO GARB OIL & POWER | |
$ | (113,033 | ) | |
$ | (1,095,857 | ) |
| | |
| | | |
| | |
| BASIC AND DILUTED LOSS PER COMMON SHARE ATTRIBUTABLE TO GARB OIL &
POWER SHAREHOLDERS | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| | |
| | | |
| | |
| WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING | |
| 36,308,155,265 | | |
| 2,528,222,105 | |
See accompanying
notes to the consolidated unaudited financial statements.
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Statements of Cash Flows
(Unaudited)
| | |
Three
Months Ended March 31, | |
| | |
2013 | | |
2012 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net loss | |
$ | (113,033 | ) | |
$ | (1,095,857 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Depreciation expense | |
| - | | |
| 28 | |
| Debt issued for services | |
| - | | |
| 40,000 | |
| Common stock issued for services | |
| 5,000 | | |
| 259,750 | |
| Preferred stock issued for services | |
| - | | |
| 204,705 | |
| (Gain) loss on extinguishment of debt | |
| (332,880 | ) | |
| 101,282 | |
| Amortization of debt discount | |
| 14,381 | | |
| 93,335 | |
| Disposition of Fixed Asset | |
| 3,886 | | |
| 2,621 | |
| Bad debt expense | |
| 3,535 | | |
| 54,719 | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (3,535 | ) | |
| (54,719 | ) |
| Accounts payable and accrued expenses | |
| 190,226 | | |
| 27,778 | |
| Accrued interest | |
| 58,115 | | |
| 90,386 | |
| Wages and payroll taxes payable | |
| 165,000 | | |
| 165,000 | |
| Income taxes payable | |
| - | | |
| - | |
| Net
cash used in operating activities | |
| (9,305 | ) | |
| (110,972 | ) |
(Continued
next page)
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Statements of Cash Flows
(Unaudited)
(Continued)
| | |
Three
Months Ended March 31, | |
| | |
2013 | | |
2012 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Cash flows from investing activities | |
| - | | |
| - | |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from notes payable | |
| 14,000 | | |
| 94,000 | |
| Payments on notes payable | |
| - | | |
| - | |
| Net cash provided by financing
activities | |
| 14,000 | | |
| 94,000 | |
| Net increase (decrease) in cash | |
| 4,695 | | |
| (16,972 | ) |
| Effect of exchange rate changes on cash | |
| - | | |
| - | |
| Cash at beginning of period | |
| 3 | | |
| 17,544 | |
| Cash at end of period | |
$ | 4,698 | | |
$ | 572 | |
| | |
| | | |
| | |
| Supplemental disclosures of cash flow information: | |
| | | |
| | |
| | |
| | | |
| | |
| Cash paid for: | |
| | | |
| | |
| Interest | |
$ | - | | |
$ | - | |
| Income taxes | |
$ | - | | |
$ | - | |
| | |
| | | |
| | |
| Non-cash financing activities: | |
| | | |
| | |
| Common shares issued for debt and accrued interest | |
$ | 436,300 | | |
$ | 118,000 | |
| Debt discount | |
$ | 14,000 | | |
$ | 88,615 | |
| Common shares issued for liabilities | |
$ | 250,000 | | |
$ | - | |
| Common shares issued for accrued compensation | |
$ | - | | |
$ | - | |
| Common shares exchanged for Class B preferred shares | |
$ | 180 | | |
$ | - | |
| Accrued interest reclassified to notes payable | |
$ | - | | |
$ | 11,250 | |
See
accompanying notes to the consolidated unaudited financial statements.
Garb
Oil & Power Corporation and Subsidiaries
Notes
to Consolidated Financial Statements
(Unaudited)
For
the Three and Three months ended March 31, 2013 and 2012
Forward
The
Notes to Consolidated Unaudited Financial Statements contain disclosures relating primarily to the fiscal periods stated above
for the Consolidated Unaudited Financial Statements. In addition, Notes containing select subsequent event disclosures have the
words “To Date” added to their title and Note 7 – Subsequent Events makes this reference. Subsequent Notes to
Consolidated Unaudited Financial Statements will fully disclose for the fiscal period to which they apply.
“Former
management” refers to prior Company management who were managing the Company until August 21, 2013. “Current management”
refers to current Company management who have managed the Company since August 21, 2013.
Note
1 – Organization, Nature of Business, and Basis of Presentation
Organization
and Nature of Business to Date
Garb
Oil & Power Corporation (the “Company” or “Garb”) was incorporated in the State of Utah in 1972 under
the name Autumn Day, Inc. The Company changed its name to Energy Corporation International in 1978 and to Garb-Oil Corporation
of America in 1981, which marked the start of the Company’s development state in the energy and recycling industries. The
Company changed its name to Garb Oil & Power Corporation in 1985 and then to Garb Corporation in May 2013. In February 2014,
the Company changed its name back to Garb Oil & Power Corporation.
On
October 27, 2009, the Company entered into an agreement to purchase Resource Protection Systems GmBH, a company organized and
currently active under the laws of Germany (“RPS”). The purchase was for all outstanding shares, as well as for specified
RPS assets and liabilities. The RPS specified assets were not transferred to the Company and therefore the purchase was not fully
consummated. On January 15, 2010, RPS purchased 80% of the issued and outstanding stock of Newview S.L., a company organized under
the laws of Spain (“Newview”). The Company, RPS and Newview were considered entities under common control.
Effective
August 21, 2013, all of the Company’s former executive officers and directors resigned and therefore the Company, RPS and
Newview were no longer considered to be entities under common control. Also effective August 21, 2013, following the resignation
of the Company’s former management, Ms. Tammy Taylor was appointed as the Company’s Chief Executive Officer, President
and Principal Financial Officer, and Ms. M. Aimee Coleman was appointed as the Company’s Corporate Secretary and Principal
Accounting Officer. Ms. Taylor was also appointed as the Company’s sole director.
On
January 24, 2014 the Company signed a letter of intent (the “LOI”) and a collaborative effort agreement (the “CE
Agreement”) with Shredderhotline.com Company (“Shredderhotline”) and Dan Scott Burda, Shredderhotline’s
President/Owner. In general, the CE Agreement provided that the two ranking executive officers of both companies’ will collaborate
on future sales and operations within a newly formed wholly owned subsidiary of the Company, Garb Global Services, Inc. (“Garb
Global”). On November 18, 2014, the Company and Shredderhotline mutually determined that their business interests had diverged
and the Company and Shredderhotline released one another from their rights and obligations under the LOI and CE Agreement both
dated January 24, 2014. Garb Global will continue as an operating subsidiary of the Company.
Basis
of Presentation
The
unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do
not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be
read in conjunction with the December 31, 2012 audited financial statements and the accompanying notes thereto included in our
Form 10-K. While management believes the procedures followed in preparing these unaudited financial statements are reasonable,
the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished
by the Company later in the year.
These
consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion
of management, are necessary to present fairly the operations and cash flows for the periods presented.
Note
2 – Going Concern
The
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the ordinary course of business. As shown in the consolidated financial statements,
the Company has incurred a net loss of $(113,033) for the three months ended March 31, 2013 and has a net accumulated deficit
of $(14,536,040). These factors, among others, raise substantial doubt about the Company’s ability to continue as a going
concern for a reasonable period of time. The consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent
upon its ability to generate sufficient cash flows to meet its obligations on a timely basis, to obtain additional financing as
may be required, and its ability to continue its implementation of operations. Management is continuing its efforts to obtain
the necessary financing as may be required to generate sufficient cash flows for current and future operations. Management is
pursuing avenues of generating cash or revenues during the next twelve months. The Company is also attempting to interest purchasers,
or potential purchasers, of shredders, recycling equipment and new tires, and establishing manufacturing plants. The Company also
continues to pursue financing to build and operate its own waste refinement and recycling industrial manufacturing plants.
There
is no assurance that the Company will be able to obtain additional cash flow from operations or to obtain additional financing.
If these are not available to the Company, the Company may not be able to continue operations. While management remains confident
that transactions will proceed, no assurances can be expressed as to the Company’s continuing viability in the absence of
revenues. Current funding has come from operations and sales and the Company is currently in negotiations with several investment
sources for equity investment in the company, which if successful, will satisfy long-term operations and capital expenditures.
There are no guarantees that such negotiations will be successful.
Note
3 – Property and Equipment
The
major classes of equipment as of March 31, 2013 and the year ended December 31, 2012 are as follows:
| | |
| | |
| | |
Estimated |
| | |
| | |
| | |
Service Lives |
| | |
March
31, 2013 | | |
December
31, 2012 | | |
in
Years |
| Office equipment & furniture | |
$ | - | | |
$ | 34,452 | | |
3-7 |
| | |
| | | |
| | | |
|
| Total property and equipment | |
| - | | |
| 34,452 | | |
|
| | |
| | | |
| | | |
|
| Less accumulated depreciation | |
| - | | |
| (30,566 | ) | |
|
| | |
| | | |
| | | |
|
| Property and equipment, net | |
$ | - | | |
$ | 3,886 | | |
|
Note
4 – Related Party Transactions
In
February 2013, Igor Plahuta converted the 12,000,000,000 shares of Common Stock received during June 2012 to 1,200,000 shares
of Class B Preferred Stock using a stated conversion rate of $0.0001.
In
February 2013, Alan Fleming converted the 6,000,000,000 shares of Common Stock received during June 2012 to 600,000 shares of
Class B Preferred Stock using a stated conversion rate of $0.0001.
Related
party payable consisted of the following at March 31, 2013:
| | |
March 31, 2013 | |
| | |
| |
| Accounts payable to a related parties, due on demand, no interest, unsecured | |
$ | 50,556 | |
| | |
| | |
| Accounts payable to a related party, due on demand, plus interest at 10%
per annum, unsecured | |
| 225,914 | |
| | |
| | |
| Total | |
$ | 276,470 | |
As
of March 31, 2013, accounts receivable related to cash received by management without supportive cash receipts was $251,800. As
of March 31, 2013, allowances for bad debt was $251,800, resulting in net accounts receivable from related party balances as of
March 31, 2013 as $0.
Note
5 – Notes Payable
January
3, 2002 Note
A
$10,000 unsecured promissory note was entered into on January 3, 2002, is due August 1, 2006, plus interest of 12% and is in default.
The balance of the Note as of March 31, 2013 and December 31, 2012 was $10,000, net of debt discounts of $0.
January
1, 2003 Note
A
$68,493 unsecured promissory note was entered into on January 1, 2003, is due on demand and plus interest of 12%. The balance
of the Note as of March 31, 2013 and December 31, 2012 was $68,493, net of debt discounts of $0.
January
1, 2003 Note
A
$165,000 unsecured promissory note was entered into on January 1, 2003, is due on demand and plus interest of 12%. The balance
of the Note as of March 31, 2013 and December 31, 2012 was $165,000, net of debt discounts of $0.
January
21, 2003 Note
A
$20,000 unsecured promissory note was entered into on January 21, 2003, is due on demand and plus interest of 10%. The balance
of the Note as of March 31, 2013 and December 31, 2012 was $20,000, net of debt discounts of $0.
June
24, 2006 Note
A
$53,000 promissory note was entered into on June 24, 2006 secured by sales contract and officer guarantee, is due on demand, plus
interest of 12% and plus a $5,000 default interest penalty per week. The balance of the Note as of March 31, 2013 and December
31, 2012 was $53,000, both net of debt discounts of $0.
July
5, 2006 Note
A
$2,250 unsecured promissory note was entered into on July 5, 2006, was due September 5, 2006, plus interest of 5% per month and
is in default. The balance of the Note as of March 31, 2013 and December 31, 2012 was $2,250, net of debt discounts of $0.
July
5, 2006 Note
A
$2,750 unsecured promissory note was entered into on July 5, 2006, was due September 5, 2006, plus interest of 5% per month and
is in default. The balance of the Note as of March 31, 2013 and December 31, 2012 was $2,750, net of debt discounts of $0.
October
11, 2007 Note
A
$129,327 unsecured promissory note was entered into on October 11, 2007, is due on demand, plus interest of 18% from October 7,
2005 through January 6, 2006 then $500 per week through April 1, 2009, then $5,000 per month. During the year ended December 31,
2012, the Company issued a total of 15,250,000,000 shares of common stock at an average conversion price of $.000001, or $15,250
as repayment to the original debt holder for principal and accrued interest. During the three months ended March 31, 2013 the
original debt holder assigned $6,000 worth of note’s accrued interest. During the year ended December 31, 2012 the original
debt holder assigned $49,000 worth of note’s principle and accrued interest. The balance of the October 11, 2007 Note owed
to the original debt holder as of the three months ended March 31, 2013 and the year ended December 31, 2012 was $327, net of
debt discounts of $0.
During
the year ended December 31, 2012, the Company issued a total of 6,350,000,000 shares of common stock at an average conversion
price of $.000006, or $35,750, as repayment for a portion of the year ended December 31, 2012 Assigned October 11, 2007 Note.
The Assigned October 11, 2007 Notes balances total $13,250 as of March 31, 2013 and $0 as of December 31, 2012, net of debt discounts
of $0.
December
31, 2009 Note
A
$6,000 unsecured promissory note was entered into on December 31, 2009, is due on demand and plus interest of 36%. The balance
of the Note as of March 31, 2013 and December 31, 2012 was $6,000, net of debt discounts of $0.
December
31, 2009 Note
A
$7,500 unsecured promissory note was entered into on December 31, 2009, is due on demand and plus interest of 10%. The balance
of the Note as of March 31, 2013 and December 31, 2012 was $7,500, net of debt discounts of $0.
December
31, 2009 Note
A
$3,000 unsecured promissory note was entered into on December 31, 2009, is due on demand and plus interest of 36%. The balance
of the Note as of March 31, 2013 and December 31, 2012 was $3,000, net of debt discounts of $0.
June
23, 2010 Note
On
June 23, 2010 the Company converted $43,217 of accounts payable into an unsecured promissory note. The note bears interest at
6% per annum and is due on demand. The balance of the June 22, 2010 Note as of March 31, 2013 and December 31, 2012 was $43,217,
net of debt discounts of $0.
June
29, 2010 Note
On
June 29, 2010 the Company issued an unsecured promissory note to a professional services provider for $300,000 related to consulting
services rendered. The note bears interest at 18% per annum and has a maturity date of July 1, 2010. The note agreement contains
a 10% penalty clause if the Company fails to make payment at the maturity date. On July 2, 2010 the Company was in default of
the note and recorded penalties of $30,296 to interest expense. During the year ended December 31, 2011, the professional services
provider (“Assignor”) entered into $309,250 worth of certain assignment of debt agreements with several investors
(“Assignees”) pursuant to which the Assignor granted, transferred and set over until the Assignees its right, title
and interest in the June 29, 2010 Note including, without limitation, all rights, interest terms, benefits and advantages of the
Assignor to be derived here from and burdens, obligations and liabilities to be derived thereunder. The balance of the June 29,
2010 Note owed to the professional services provider as of March 31, 2013 and as of December 31, 2012 was $21,046, net of debt
discounts of $0.
During
the year ended December 31, 2012, the Company issued a total of 324,285,714 shares of common stock at an average conversion price
of $.00012, or $39,000, as repayment for several of the year ended December 31, 2011 Assigned June 29, 2010 Note. The Assigned
June 29, 2010 Notes balances as of March 31, 2013 and as of December 31, 2012 was $57,000, net of debt discounts of $0.
September
29, 2010 Note
On
September 29, 2010 the Company issued an unsecured promissory note to a professional services provider for $150,000 related to
consulting services rendered. The note bears interest at 18% per annum and has a maturity date of September 30, 2010. The note
agreement contains a 10% penalty clause if the Company fails to make payment at the maturity date. On October 1, 2010 the Company
was in default of the note and recorded penalties of $15,074 to interest expense. During the year ended December 31, 2012, the
professional services provider (“Assignor”) entered into $165,074 plus accrued interest worth of certain assignment
of debt agreements with several investors (“Assignees”) pursuant to which the Assignor granted, transferred and set
over until the Assignees its right, title and interest in all of the September 29, 2010 Note including, without limitation, all
rights, interest terms, benefits and advantages of the Assignor to be derived here from and burdens, obligations and liabilities
to be derived thereunder. The Company did not pay cash or issue shares of common stock during the three months ended March 31,
2013 and the year ended December 31, 2012 to the professional services provider on the September 29, 2010 Note. The balance of
the September 29, 2010 Note as of March 31, 2013 and as of December 31, 2012 was $0, both net of debt discounts of $0.
During
the year ended December 31, 2012, the Company issued a total of 1,950,000,000 shares of common stock at an average conversion
price of $.000097, or $190,000, as repayment in full of the year ended December 31, 2012 Assigned June 29, 2010 Note. The Assigned
September 29, 2010 Notes balances total $0 as of March 31, 2013 and as of December 31, 2012, both net of debt discounts of $0.
October
15, 2010 Note 1
On
October 15, 2010 the Company issued an unsecured promissory note to a professional services provider to settle $23,000 worth of
accounts payable. The note bears interest at 15% per annum and had a maturity date of October 15, 2011. The balance of the October
15, 2010 Note 1 as of December 31, 2010 was $23,000. During the year ended December 31, 2011, the professional services provider
(“Assignor”) entered into a $23,000 debt agreement with an investor (“Assignee”) pursuant to which the
Assignor granted, transferred and set over until the Assignees its right, title and interest in the October 15 Note 1 including,
without limitation, all rights, interest terms, benefits and advantages of the Assignor to be derived here from and burdens, obligations
and liabilities to be derived thereunder plus $2,000 in additional principal recorded as interest expense. The Company did not
pay cash or issue shares of common stock during the three months ended March 31, 2013 and the year ended December 31, 2012 to
the professional services provider on the October 15, 2010 Note 1. The balance of the June October 15, 2010 Note 1 owed to the
professional services provider as of March 31, 2013 and as of December 31, 2012 was $0, both net of debt discounts of $0.
The
Assigned October 15, 2010 Note 1’s outstanding $25,000 principal and accrued interest was consolidated into the June 16,
2012 Note. The Assigned October 15, 2010 Note 1 assigned balance totals $0 as of March 31, 2013 and as of December 31, 2012, both
net of debt discounts of $0.
October
15, 2010 Note 2
On
October 15, 2010 the Company issued an unsecured promissory note to a professional services provider to settle $24,000 worth of
accounts payable. The note bears interest at 15% per annum and had a maturity date of October 15, 2011. The balance of the October
15, 2010 Note 2 as of December 31, 2010 was $24,000. During the year ended December 31, 2011, the professional services provider
(“Assignor”) entered into a $24,000 debt agreement with an investor (“Assignee”) pursuant to which the
Assignor granted, transferred and set over until the Assignees its right, title and interest in the October 15 Note 2 including,
without limitation, all rights, interest terms, benefits and advantages of the Assignor to be derived here from and burdens, obligations
and liabilities to be derived thereunder plus $1,000 in additional principal recorded as interest expense. The Company did not
pay cash or issue shares of common stock during the three months ended March 31, 2013 and the year ended December 31, 2012 to
the professional services provider on the October 15, 2010 Note 2. The balance of the October 15, 2010 Note 2 owed to the professional
services provider as of March 31, 2013 and as of December 31, 2012 was $0, both net of debt discounts of $0.
The
Assigned October 15, 2010 Note 2’s outstanding $25,000 principal and accrued interest was consolidated into the June 16,
2012 Note. The Assigned October 15, 2010 Note 2 assigned balance total as of March 31, 2013 and the year ended December 31, 2012
was $0, both net of debt discounts of $0.
December
14, 2010 Note
On
December 14, 2010 the Company borrowed $9,902 from Evolution Capital (“Evolution”) pursuant to a convertible promissory
note. The note bears interest at 24%, has a maturity date of May 14, 2011 and requires the Company to repay 110% of the amount
borrowed. The Note also has a 36% default interest rate should the Note go into default. Evolution has the right to immediately
convert the Note before the maturity date, into shares of the Company’s common stock at a discount of 65% of the average
of the lowest 5 days’ trading prices of Common Stock of the 10 days prior to the conversion date. Since the note was immediately
convertible into a variable number of shares based on a fixed monetary value the Company followed the guidance in ASC 480-10-25-14.
This requires the note to be classified as a liability and reported at its full fair value, which is the fixed monetary value
of shares into which the debt is convertible. The excess of the amount recognized as a liability for the convertible debt over
the proceeds received upon issuance, $18,389, was recognized as interest expense on the date of issuance and resulted in a balance
at its full fair value of $28,291, net of debt discounts of $0.
During
the year ended December 31, 2012, Evolution (as the “Assignor”) entered into $6,000 worth of certain assignment of
debt agreements with a investor (“Assignee”) pursuant to which the Assignor granted, transferred and set over until
the Assignees its right, title and interest in the December 14, 2010 Note including, without limitation, all rights, interest
terms, benefits and advantages of the Assignor to be derived here from and burdens, obligations and liabilities to be derived
thereunder. The Company did not pay cash or issue shares of common stock during the three months ended March 31, 2013 and the
year ended December 31, 2012 to Evolution on the December 14, 2010 Note. The December 14, 2010 Note’s outstanding $3,902
principal plus accrued interest was consolidated into the June 16, 2012 Note. The December 14, 2010 Note balance as of the three
months ended March 31, 2013 and the year ended December 31, 2012 owed to Evolution was $0, net of debt discounts of $0.
During
the year ended December 31, 2012, the Company issued a total of 24,489,795 shares of common stock at an average conversion price
of $.0002, or $6,000, as repayment in full of the year ended December 31, 2012 Assigned December 14, 2010 Note. The year ended
December 31, 2012 Assigned December 14, 2010 Note balance total $0 as of the three months ended March 31, 2013 and the year ended
December 31, 2012.
December
29, 2010 Note
On
December 29, 2010 the Company issued an unsecured promissory note to a professional services provider for $50,000 related to consulting
services rendered. The note bears interest at 18% per annum and has a maturity date of December 31, 2010. The note agreement contains
a 10% penalty clause if the Company fails to make payment at the maturity date. On December 31, 2010 the Company was in default
of the Note and recorded penalties of $5,049 to interest expense. The balance of the December 29, 2010 Note as of March 31, 2013
and December 31, 2012 was $55,049, net of debt discounts of $0.
January
24, 2011 Note
On
January 24, 2011 the Company issued an unsecured promissory note to a professional services provider for $615 related to consulting
services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of July 24, 2011 and has a 36% default
interest rate should the note go into default. On July 25, 2011 the Company defaulted on the note and the note interest per annum
increased to 36%. The note’s outstanding $615 principal plus accrued interest was consolidated into the June 16, 2012 Note.
The balance of the January 24, 2011 Note as of the three months ended March 31, 2013 and the year ended December 31, 2012 was
$0, both net of debt discounts of $0.
February
2, 2011 Note
On
February 2, 2011 the Company issued an unsecured promissory note to a professional services provider for $500, related to consulting
services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of August 2, 2011 and has a 36% default
interest rate should the note go into default. On August 3, 2011 the Company defaulted on the note and the note interest per annum
increased to 36%. The note’s outstanding $500 principal plus accrued interest was consolidated into the June 16, 2012 Note.
The balance of the February 2, 2011 Note as of the three months ended March 31, 2013 and the year ended December 31, 2012 was
$0, both net of debt discounts of $0.
February
24, 2011 Note
On
February 24, 2011 the Company issued an unsecured promissory note to a professional services provider for $40,000, related to
consulting services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of August 24, 2011 and
has a 36% default interest rate should the note go into default. On August 25, 2011 the Company defaulted on the note and the
note interest per annum increased to 36%. During the year ended December 31, 2012, the Company issued a total of 220,000,000 shares
of common stock at an average conversion price of $.00011, or $24,000 as partial repayment of the note. The note’s remaining
outstanding $16,000 principal and accrued interest was assigned and consolidated into the June 16, 2012 Note. The balance of the
February 24, 2011 Note as of the three months ended March 31, 2013 and the year ended December 31, 2012 was $0, both net of debt
discounts of $0.
March
29, 2011 Note
On
March 29, 2011 the Company issued an unsecured promissory note to a professional services provider for $50,000 related to consulting
services rendered. The note bears interest at 12% per annum, has a maturity date of March 31, 2011 and has an 18% default interest
rate should the note go into default. The note agreement contains a 10% penalty clause if the Company fails to make payment at
the maturity date. On April 1, 2011 the Company was in default of the March 29, 2011 Note and recorded penalties of $5,000 to
interest expense and the note interest per annum increased to 18%. During the three months ended March 31, 2013, the Company issued
a total of 500,000,000 shares of common stock at an average conversion price of $0.0001, or $50,000 as full repayment of the March
29, 2011 Note. The balance of the March 29, 2011 Note as of March 31, 2013 was $0 and as of December 31, 2012 was $50,000, both
net of debt discounts of $0.
March
31, 2011 Note
On
March 31, 2011 the Company issued an unsecured promissory note to a professional services provider for $75,000 related to consulting
services rendered. The note bears interest at 18% per annum and has a maturity date of September 30, 2011. The note agreement
contains a 10% penalty clause if the Company fails to make payment at the maturity date. On October 1, 2011 the Company was in
default of the March 31, 2011 Note and recorded penalties of $7,500 to interest expense. During the three months ended March 31,
2013, the Company issued a total of 750,000,000 shares of common stock at an average conversion price of $0.0001, or $75,000 as
full repayment of the March 31, 2011 Note. The balance of the March 31, 2011 Note as of March 31, 2013 was $0 and as of December
31, 2012 was $75,000, both net of debt discounts of $0.
April
1, 2011 Note 1
On
April 1, 2011 the Company issued an unsecured promissory note to a professional services provider for $1,336 related to consulting
services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of October 1, 2011 and has a 36% default
interest rate should the note go into default. On October 2, 2011 the Company defaulted on the note and the note interest per
annum increased to 36%. The note’s outstanding $1,336 principal plus accrued interest was consolidated into the June 16,
2012 Note. The balance of the April 1, 2011 Note 1 as of the three months ended March 31, 2013 and the year ended December 31,
2012 was $0, both net of debt discounts of $0.
April
1, 2011 Note 2
On
April 1, 2011 the Company issued an unsecured promissory note to a professional services provider for $50,000, related to consulting
services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of October 1, 2011 and has a 36% default
interest rate should the note go into default. On October 2, 2011 the Company defaulted on the note and the note interest per
annum increased to 36%. The note’s outstanding $50,000 principal and accrued interest was assigned and consolidated into
the June 16, 2012 Note. The balance of the April 1, 2011 Note 2 as of March 31, 2013 and as of December 31, 2012 was $0, both
net of debt discounts of $0.
April
20, 2011 Note
On
April 20, 2011 the Company issued an unsecured promissory note to a professional services provider for $4,000 related to consulting
services rendered. The note bears interest at 20% per annum and has a maturity date of October 20, 2011. The note agreement contains
a change in the interest rate to 36% of the Company fails to make payment at the maturity date. On October 21, 2011 the note began
accruing interest at the 36% default interest rate. During the three months ended March 31, 2013, the Company issued a total of
40,000,000 shares of common stock at an average conversion price of $0.0001, or $4,000 as full repayment of the April 20, 2011
Note. The balance of the April 20, 2011 Note as of the three months ended March 31, 2013 and the year ended as of December 31,
2012 was $0 and $4,000, respectively, both net of debt discounts of $0.
May
12, 2011 Note
On
May 12, 2011 the Company issued an unsecured promissory note to a professional services provider for $100,000, related to consulting
services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of November 4, 2011 and has a 36%
default interest rate should the note go into default. On November 5, 2011 the Company defaulted on the note and the note interest
per annum increased to 36%. The note’s outstanding $100,000 principal plus accrued interest was consolidated into the June
16, 2012 Note. The balance of the May 12, 2011 Note as of the three months ended March 31, 2013 and the year ended as of December
31, 2012 was $0, both net of debt discounts of $0.
June
24, 2011 Note
On
June 24, 2011 the Company issued an unsecured convertible note in the principal amount of $20,000 in exchange for $20,000 in cash
consideration. The note bears interest at 9.90% per annum, has a maturity date of June 24, 2012 and has a 20% default interest
rate should the note go into default. During the year ended December 31, 2012, the Company issued a total of 449,689,800 shares
of common stock at an average conversion price of $.00005, or $22,484 as repayment in full of the note principal ($20,000) and
accrued interest ($2,484). The balance of the June 24, 2011 Note as of the three months ended March 31, 2013 and the year ended
as of December 31, 2012 was $0, both net of debt discounts of $0.
June
30, 2011 Note
On
June 30, 2011 the Company issued an unsecured promissory note to a professional services provider for $75,000 related to consulting
services rendered. The note bears interest at 18% per annum and has a maturity date of December 31, 2011. The note agreement contains
a 10% penalty clause if the Company fails to make payment at the maturity date. On December 30, 2011 the Company recognized being
in default of the June 30, 2011 Note and recorded penalties of $7,500 to interest expense. During the three months ended March
31, 2013, the Company issued a total of 750,000,000 shares of common stock at an average conversion price of $0.0001, or $75,000
as full repayment of the June 30, 2011 Note. The balance of the June 30, 2011 Note as of the three months ended March 31, 2013
and the year ended as of December 31, 2012 was $0, both net of debt discounts of $0.
July
1, 2011 Note 1
On
July 1, 2011 the Company issued an unsecured convertible note to a professional services provider for $10,500 related to consulting
services rendered. The note bears interest at 20% per annum and has a maturity date of January 1, 2012. During the year ended
December 31, 2011, the professional services provider (“Assignor”) entered into a certain assignment of the July 1,
2011 Note with an investor (“Assignee”) pursuant to which the Assignor granted, transferred and set over until the
Assignee its right, title and interest in the July 1, 2011 Note including, without limitation, all rights, interest terms, benefits
and advantages of the Assignor to be derived here from and burdens, obligations and liabilities to be derived thereunder. On January
2, 2012 the Company defaulted on the note and the note interest per annum increased to 20%. The note’s outstanding Assigned
$10,500 principal plus accrued interest was consolidated into the June 16, 2012 Note. The balance of the Assigned July 1, 2011
Note 1 owed to the Assignee as of the three months ended March 31, 2013 and the year ended as of December 31, 2012 was $0, both
net of debt discounts of $0.
July
1, 2011 Note 2
On
July 1, 2011 the Company issued an unsecured convertible note to a professional services provider for $30,000, related to consulting
services rendered. The note bears interest at 10% fixed rate per annum, has a maturity date of January 1, 2012 and has a 36% default
interest rate should the note go into default. On January 2, 2012 the Company defaulted on the note and the note interest per
annum increased to 36%. The note’s outstanding $30,000 principal and accrued interest was assigned and consolidated into
the June 16, 2012 Note. The balance of the July 1, 2011 Note 2 as of the three months ended March 31, 2013 and the year ended
as of December 31, 2012 was $0, both net of debt discounts of $0.
July
26, 2011 Note
On
July 26, 2011 the Company issued an unsecured convertible note in the principal amount of $12,300 in exchange for $12,300 in cash
consideration. The note bears interest at 10% per annum and has a maturity date of January 26, 2012. The note agreement contains
a change in the interest rate to 36% of the Company fails to make payment at the maturity date. On January 27, 2012 the Company
defaulted on the note and the note interest per annum increased to 36%. During the three months ended March 31, 2013, the Company
issued a total of 123,000,000 shares of common stock at an average conversion price of $0.0001, or $12,300 as full repayment of
the July 26, 2011 Note. The balance of the July 26, 2011 Note as of the three months ended March 31, 2013 and the year ended as
of December 31, 2012 was $0, both net of debt discounts of $0.
August
26, 2011 Note
On
August 26, 2011 the Company issued an unsecured convertible note in the principal amount of $30,000 in exchange for $30,000 in
cash consideration. The note bears interest at 9.9% per annum, has a maturity date of August 26, 2012 and has a 20% default interest
rate should the note go into default. On August 27, 2012 the Company defaulted on the note and the note interest per annum increased
to 20%. The balance of the August 26, 2011 Note as of March 31, 2013 and December 31, 2012 was $30,000, both net of debt discounts
of $0.
September
19, 2011 Note
On
September 19, 2011 the Company issued an unsecured convertible note in the principal amount of $30,000 in exchange for $30,000
in cash consideration. The note bears interest at 9.9% per annum, has a maturity date of September 19, 2012 and has a 20% default
interest rate should the note go into default. On September 20, 2012 the Company defaulted on the note and the note interest per
annum increased to 20%. The balance of the September 19, 2011 Note as of March 31, 2013 and December 31, 2012 was $30,000, both
net of debt discounts of $0.
September
22, 2011 Note
On
September 22, 2011 the Company issued an unsecured convertible note in the principal amount of $20,000 in exchange for $20,000
in cash consideration. The note bears interest at 8% per annum and has a maturity date of September 22, 2012. On September 23,
2012 the Company defaulted on the note. The balance of the September 22, 2011 Note as of March 31, 2013 and December 31, 2012
was $20,000, net of debt discounts of $0.
September
30, 2011 Note
On
September 30, 2011 the Company issued an unsecured promissory note to a professional services provider for $75,000 related to
consulting services rendered. The note bears interest at 10% per annum and has a maturity date of March 31, 2012. On April 1,
2012 the Company defaulted on the note. During the three months ended March 31, 2013, the Company issued a total of 750,000,000
shares of common stock at an average conversion price of $0.0001, or $75,000 as full repayment of the September 30, 2011 Note.
The balance of the September 30 Note as of March 31, 2013 was $0 and as of December 31, 2012 was $75,000, both net of debt discounts
of $0.
October
1, 2011 Note
On
October 1, 2011 the Company issued an unsecured promissory note to a professional services provider for $40,700 related to consulting
services rendered. The note bears interest at 10% per annum and has a maturity date of April 1, 2012. The balance of the October
1, 2011 Note as of March 31, 2013 and December 31, 2012 was $40,700, net of debt discounts of $0.
October
7, 2011 Note
On
October 7, 2011 the Company issued an unsecured promissory note in the principal amount of $25,000 in exchange for $25,000 in
cash consideration. The note bears interest at 10% fixed interest per annum and has a maturity date of April 7, 2012. The note
agreement contains a change in the interest rate to 36% of the Company fails to make payment at the maturity date. On April 8,
2012 the Company defaulted on the note and the note interest per annum increased to 36%. The note’s outstanding $25,000
principal plus accrued interest was consolidated into the June 16, 2012 Note. The balance of the October 7, 2011 Note as of the
three months ended March 31, 2013 and the year ended as of December 31, 2012 was $0, both net of debt discounts of $0.
October
31, 2011 Note
On
October 31, 2011 the Company issued an unsecured promissory note in the principal amount of $25,000 in exchange for $25,000 in
cash consideration. The note bears interest at 10% per annum and has a maturity date of April 30, 2012. On May 1, 2012 the Company
defaulted on the note. During the three months ended March 31, 2013, the Company issued a total of 250,000,000 shares of common
stock at an average conversion price of $0.0001, or $25,000 as full repayment of the October 31, 2011 Note. The balance of the
October 31, 2011 Note as of March 31, 2013 was $0 and as of December 31, 2012 was $25,000, both net of debt discounts of $0.
November
2, 2011 Note
On
November 2, 2011 the Company issued an unsecured convertible note in the principal amount of $33,000 in exchange for $33,000 in
cash consideration. The note bears interest at 8% per annum and has a maturity date of November 2, 2012. The balance of the November
2, 2011 Note as of March 31, 2013 and December 31, 2012 was $33,000, both net of debt discounts of $0.
December
13, 2011 Note
On
December 13, 2011 the Company issued an unsecured convertible note to a professional services provider for $7,000 related to consulting
services rendered. The note bears interest at 12% per annum, has a maturity date of June 13, 2012 and has a 24% default interest
rate should the note go into default. On June 14, 2012 the Company defaulted on the note and the note interest per annum increased
to 24%. The note’s outstanding $7,000 principal plus accrued interest was consolidated into the June 16, 2012 Note. The
balance of the December 13, 2011 Note as of the three months ended March 31, 2013 and the year ended as of December 31, 2012 was
$0, both net of debt discounts of $0.
December
30, 2011 Note 1
On
December 30, 2011 the Company issued an unsecured promissory note to a professional services provider for $75,000 related to consulting
services rendered. The note bears interest at 10% per annum and has a maturity date of June 30, 2012. On July 1, 2012 the Company
defaulted on the note. During the three months ended March 31, 2013, the Company issued a total of 750,000,000 shares of common
stock at an average conversion price of $0.0001, or $75,000 as full repayment of the December 30, 2011 Note 1. The balance of
the December 30, 2011 Note 1 as of March 31, 2013 was $0 and as of December 31, 2012 was $75,000, both net of debt discounts of
$0.
December
30, 2011 Note 2
On
December 30, 2011 the Company issued an unsecured promissory note in the principal amount of $25,000 in exchange for $25,000 in
cash consideration. The note bears interest at 10% per annum and has a maturity date of June 30, 2012. On July 1, 2012 the Company
defaulted on the note. During the three months ended March 31, 2013, the Company issued a total of 250,000,000 shares of common
stock at an average conversion price of $0.0001, or $25,000 as full repayment of the December 30, 2011 Note 2. The balance of
the December 30, 2011 Note 2 as of March 31, 2013 was $0 and as of December 31, 2012 was $25,000, both net of debt discounts of
$0.
January
13, 2012 Note
On
January 13, 2012 the Company borrowed $25,000 pursuant to an unsecured convertible note. The note bears interest at 12% per annum
and has a maturity date of July 13, 2012. The note agreement contains a change in the interest rate to 24% default interest rate
should the note go into default. The note’s outstanding $25,000 principal and accrued interest was consolidated into the
June 16, 2012 Note. The balance of the January 13, 2012 Note as of the three months ended March 31, 2013 and the year ended as
of December 31, 2012 was $0, both net of debt discounts of $0.
January
24, 2012 Note
On
January 24, 2012 the Company borrowed $16,500 pursuant to an unsecured convertible note. The note bears interest at 7% per annum
and has a maturity date of September 24, 2013. The note agreement contains a change in the interest rate to 20% default interest
rate should the note go into default. On September 25, 2013 the Company defaulted on the note and the note interest per annum
increased to 20%. The balance of the January 24, 2012 Note as of March 31, 2013 was $11,075, net of debt discounts of $5,425 and
as of December 31, 2012 was $9,266, net of debt discounts of $7,234.
February
15, 2012 Note
On
February 15, 2012 the Company borrowed $22,500 pursuant to an unsecured promissory note. The note bears interest at 12% per annum
and has a maturity date of August 15, 2012. The note agreement contains a change in the interest rate to 24% default interest
rate should the note go into default. The note’s outstanding $22,500 principal and accrued interest was assigned and consolidated
into the June 16, 2012 Note. The balance of the February 15, 2012 Note for the three months ended March 31, 2013 and the year
ended December 31, 2012 was $0, both net of debt discounts of $0.
February
20, 2012 Note
On
February 20, 2012 the Company issued an unsecured convertible note to a professional services provider for $40,000 related to
consulting services rendered. The note bears interest at 12% per annum and has a maturity date of August 20, 2012. The note agreement
contains a change in the interest rate to 24% default interest rate should the note go into default. The note’s outstanding
$40,000 principal and accrued interest was assigned and consolidated into the June 16, 2012 Note. The balance of the February
20, 2012 Note for the three months ended March 31, 2013 and the year ended December 31, 2012 was $0, net of debt discounts of
$0.
February
28, 2012 Note
On
February 28, 2012 the Company borrowed $20,000 pursuant to an unsecured promissory note. The note bears interest at 10% per annum
and has a maturity date of August 28, 2012. On August 29, 2012 the Company defaulted on the note. During the three months ended
March 31, 2013, the Company issued a total of 200,000,000 shares of common stock at an average conversion price of $0.0001, or
$20,000 as full repayment of the February 28, 2012 Note. The balance of the February 28, 2012 Note as of March 31, 2013 was $0
and as of December 31, 2012 was $20,000, both net of debt discounts of $0.
March
7, 2012 Note
On
March 7, 2012 the Company borrowed $10,000 pursuant to an unsecured convertible note. The note bears interest at 7% per annum
and has a maturity date of January 24, 2013. The note agreement contains a change in the interest rate to 20% default interest
rate should the note go into default. On January 25, 2013 the Company defaulted on the note and the note interest per annum increased
to 20%. The balance of the March 7, 2012 Note for the three months ended March 31, 2013 was $9,443, net of debt discounts of $557
and the year ended December 31, 2012 was $9,257, net of debt discounts of $743.
May
16, 2012 Note
On
May 16, 2012 the Company borrowed $20,000 pursuant to an unsecured convertible note. The note bears interest at 15% per annum
and has a maturity date of February 16, 2013. The note agreement contains a change in the interest rate to $500 per day default
interest rate (or the highest rate allowed by law) should the note go into default. The balance of the May 16, 2012 Note for the
three months ended March 31, 2013 was $18,297, net of debt discounts of $1,703 and the year ended December 31, 2012 was $17,729,
net of debt discounts of $2,271.
May
23, 2012 Note
On
May 23, 2012 the Company borrowed $15,000 pursuant to an unsecured convertible note. The note bears interest at 15% per annum
and has a maturity date of May 23, 2013. The note agreement contains a change in the interest rate to $500 per day default interest
rate (or the highest rate allowed by law) should the note go into default. The balance of the May 23, 2012 Note for the three
months ended March 31, 2013 was $10,592, net of debt discounts of $4,408 and the year ended December 31, 2012 was $9,123, net
of debt discounts of $5,877.
June
16, 2012 Note
On
June 16, 2012 the Company issued a $700,000 unsecured convertible note in exchange for consolidating the unsecured notes’
outstanding principal and accrued interest that are identified below. The principal total of the notes consolidated into the June
16, 2012 Note was $544,787 with the Company recognizing the additional $155,213 principal as consulting services expense. The
note bears interest at 6% per annum and has a maturity date of June 16, 2014. The note agreement contains a change in the interest
rate to 20% default interest rate should the note go into default. The balance of the June 16, 2012 Note for the three months
ended March 31, 2013 and the year ended December 31, 2012 was $700,000, both net of debt discounts of $0.
Notes
consolidated into the June 16, 2012 Note
June
29, 2010 Note for consulting services, an assignee – $19,000 remaining assigned principal plus accrued interest
June
29, 2010 Note for consulting services, an assignee – $12,500 remaining assigned principal plus accrued interest
October
15, 2010 Note 1 for consulting services, an assignee – $25,000 assigned principal plus accrued interest
October
15, 2010 Note 2 for consulting services, an assignee – $25,000 assigned principal plus accrued interest
December
14, 2010 Note for cash received – $3,902 remaining principal plus accrued interest
January
24, 2011 Note for consulting services – $615 principal plus accrued interest
February
2, 2011 Note for consulting services – $500 principal plus accrued interest
February
24, 2011 Note for consulting services, an assignee – $16,000 remaining assigned principal plus accrued interest
April
1, 2011 Note 1 for consulting services – $1,336 principal plus accrued interest
April
1, 2011 Note 2 for consulting services, an assignee – $50,000 assigned principal plus accrued interest
May
12, 2011 Note for consulting services – $100,000 principal plus accrued interest
July
1, 2011 Note 1 for consulting services, an assignee – $10,500 assigned principal plus accrued interest
July
1, 2011 Note 2 for consulting services, an assignee – $30,000 assigned principal plus accrued interest
October
7, 2011 Note for cash received – $25,000 principal plus accrued interest
December
13, 2011 Note for consulting services – $7,000 principal plus accrued interest
January
13, 2012 Note for cash received – $25,000 principal plus accrued interest
February
15, 2012 Note for consulting services, an assignee – $22,500 assigned principal plus accrued interest
February
20, 2012 Note for consulting services, an assignee – $40,000 assigned principal plus accrued interest
July
2, 2012 Note
On
July 2, 2012 the Company borrowed $15,000 pursuant to an unsecured convertible note. The note bears interest at 15% per annum
and has a maturity date of July 2, 2013. The note agreement contains a change in the interest rate to $500 per day default interest
rate (or the highest rate allowed by law) should the note go into default. The balance of the July 2, 2012 Note for the three
months ended March 31, 2013 was $9,360, net of debt discounts of $5,640 and the year ended December 31, 2012 was $7,479, net of
debt discounts of $7,521.
March
12, 2013 Note
On
March 12, 2013 the Company borrowed $14,000 pursuant to an unsecured convertible note. The note bears interest at 10% per annum
and has a maturity date of March 12, 2014. The note agreement contains a change in the interest rate to 20% default interest rate
should the note go into default. The balance of the March 12, 2013 Note as of March 31, 2013 was $8,670, net of debt discounts
of $5,530.
Note
6 – Capital Stock
Common
Stock
Common
Shares Issued for Services
During
the three months ended March 31, 2013, the Company issued a total of 50,000,000 shares of common stock at a per share purchase
price of $0.0001, or $5,000. The Company issued these shares as payment for various outside services received including consulting
and marketing related services and recorded the value in general and administrative expenses during the three months ended March
31, 2013.
Common
Shares Issued for Debt and Accrued Interest
During
the three months ended March 31, 2013, the Company issued a total of 4,363,000,000 shares of common stock at an average price
of $0.0001 or $436,300 in the aggregate, as discussed in Note 5.
Common
Shares Issued for Liabilities
During
the three months ended March 31, 2013, the Company issued a total of 250,000,000 shares of common stock at an average price of
$0.0001 or $25,000 in the aggregate and was valued at the market price on the respective date of issuance.
Common
Stock converted to Class B Preferred Stock
During
the three months ended March 31, 2013, 18,000,000,000 shares of Common Stock were converted to 1,800,000 shares of Class B Preferred
Stock at the conversion rate of $0.0001 or $180.
Stock
Options/Stock-Based Compensation and Warrants
Changes
in stock options for the three months ended March 31, 2013 consisted of the following:
| | |
Number of
shares | | |
Weighted Average
Exercise Price | | |
Remaining Contractual
Term (in years) | | |
Intrinsic
Value | |
| Beginning balance January 1, 2012 | |
| 100,500,000 | | |
$ | 0.01 | | |
| 1.84 | | |
| | |
| Granted | |
| - | | |
$ | - | | |
| - | | |
| | |
| Exercised | |
| - | | |
$ | - | | |
| - | | |
| | |
| Forfeited/expired | |
| - | | |
$ | - | | |
| - | | |
| | |
| Outstanding at March 31, 2013 | |
| 100,500,000 | | |
$ | 0.01 | | |
| 1.59 | | |
| | |
| Exercisable | |
| 100,500,000 | | |
$ | 0.01 | | |
| 1.59 | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average fair value of options granted during three months ended March 31, 2013 | |
| | | |
$ | - | | |
| | | |
| | |
The
following table summarizes information about stock options outstanding at March 31, 2013:
| | |
Options Outstanding | |
Options Exercisable |
| Range of Exercise Prices | |
Number Outstanding | |
Weighted Average Remaining Contractual Life (in
years) | | |
Weighted Average Exercise Price | | |
Number Exercisable | |
Weighted Average Exercise Price | |
| $0.01-$1.00 | |
100,500,000 | |
| 1.59 | | |
$ | 0.01 | | |
100,500,000 | |
$ | 0.01 | |
Note
7 – Subsequent Events
Subsequent
New Debt
April
17, 2013 Note
On
April 17, 2013 the Company borrowed $3,000 pursuant to an unsecured promissory note. The note bears interest at 10% per annum
and has a maturity date of June 15, 2013.
April
27, 2013 Note
On
April 27, 2013 the Company borrowed $700 pursuant to an unsecured promissory note. The note bears interest at 10% per annum and
has a maturity date of August 25, 2013.
May
19, 2014 Note
On
May 19, 2014 the Company entered into a $60,000 unsecured convertible note for $50,000 cash to be borrowed during the year ended
December 31, 2014 plus a total of $10,000 in loan fees the Company recorded as an administrative expense as cash was borrowed.
The note bears interest at 8% per annum and has a maturity date of September 10, 2015. The note agreement contains a change in
the interest rate to 20% default interest rate should the note go into default and required 300,000,000 shares of Company’s
common stock to be reserved, but was cancelled on October 8, 2014.
During
the nine months ended June 30, 2014 the Company borrowed $10,000 cash and incurred $2,000 in loan fees. During the Six Months
Ended June 30, 2014 the Company borrowed $5,000 cash and incurred $1,000 in loan fees. During the nine months ended December 31,
2014 the Company borrowed $35,000 cash and incurred $7,000 in loan fees.
August
13, 2014 Note
On
August 13, 2014 the Company borrowed $33,000 pursuant to a discounted unsecured convertible note amount of $46,500. The Company
recorded the $13,500 discount as an administrative expense. The note bears interest at 12% per annum and has a maturity date of
February 13, 2015. The note agreement required 3,000,000,000 shares of Company’s common stock to be reserved, but was cancelled
on September 23, 2014.
September
10, 2014 Note
On
September 10, 2014 the Company entered into a $29,000 unsecured convertible note for $25,000 cash plus $4,000 in loan fees the
Company recorded as an administrative expense. The note bears interest at 8% per annum and has a maturity date of September 10,
2015. The note agreement contains a change in the interest rate to 20% default interest rate should the note go into default.
January
30, 2015 Note
On
January 30, 2015 the Company borrowed $4,200 pursuant to a discounted unsecured convertible note amount of $5,040. The Company
recorded the $840 discount as an administrative expense. The note bears interest at 8% per annum and has a maturity date of January
30, 2016. The note agreement contains a change in the interest rate to 18% default interest rate should the note go into default
and requires the Company to reserve 100,000,000 shares of the Company’s common stock.
Subsequent
New Debt - Related Parties
September
26, 2013 Note
On
September 26, 2013 the Company issued an unsecured promissory note to Corporate Business Advisors, Inc. for $150,000 as part of
a non-cash select assets and liabilities purchase agreement. The note bears no interest and has a maturity date of August 31,
2014.
December
17, 2014 Note
On
December 17, 2014 the Company entered into a $25,000 unsecured convertible note with Corporate Business Advisors, Inc. for $24,500
in total cash loans to date plus $500 in documentation fees the Company recorded as an administrative expense. The note bears
interest at 18% per annum and has a maturity date of February 17, 2015.
Subsequent
Sales of Unregistered Securities
| Date | |
Purchaser | |
Shares | | |
Price
per share | | |
Amount
$ | | |
Consideration | |
Class/Series |
| April
5, 2013 | |
Unaffiliated
party | |
| 689,344,200 | | |
$ | 0.0000 | | |
$ | 34,467.00 | | |
Conversion
of Company debt | |
Common
stock |
| April
5, 2013 | |
Unaffiliated
party | |
| 685,438,400 | | |
$ | 0.0001 | | |
$ | 34,271.92 | | |
Conversion
of Company debt | |
Common
stock |
| April
5, 2013 | |
Unaffiliated
party | |
| 355,188,400 | | |
$ | 0.0001 | | |
$ | 17,759.42 | | |
Conversion
of Company debt | |
Common
stock |
| June
24, 2013 | |
Officer
at time of issuance | |
| 850,000,000 | | |
$ | 0.0010 | | |
$ | 810,000.00 | | |
Conversion
of accrued salary | |
Common
stock |
| June
24, 2013 | |
Officer
at time of issuance | |
| 866,000,000 | | |
$ | 0.0010 | | |
$ | 826,000.00 | | |
Conversion
of accrued salary | |
Common
stock |
| June
24, 2013 | |
Officer
at time of issuance | |
| 572,500,000 | | |
$ | 0.0010 | | |
$ | 552,507.00 | | |
Conversion
of accrued salary | |
Common
stock |
| December
31, 2013 | |
Officer
of Company | |
| 600,000,000 | | |
$ | 0.0001 | | |
$ | 60,000.00 | | |
Services | |
Common
stock |
| December
31, 2013 | |
Officer
of Company | |
| 600,000,000 | | |
$ | 0.0001 | | |
$ | 60,000.00 | | |
Services | |
Common
stock |
| December
31, 2013 | |
Affiliate
of Company | |
| 600,000,000 | | |
$ | 0.0001 | | |
$ | 60,000.00 | | |
Services | |
Common
stock |
| December
31, 2013 | |
Officer
of Company | |
| 2 | | |
$ | 67,394.00 | | |
$ | 134,788.00 | | |
Services | |
Series
A Preferred stock |
| December
31, 2013 | |
Officer
of Company | |
| 1 | | |
$ | 67,394.00 | | |
$ | 67,394.00 | | |
Services | |
Series
A Preferred stock |
| December
31, 2013 | |
Affiliate
of Company | |
| 12 | | |
$ | 67,394.00 | | |
$ | 808,728.00 | | |
Services | |
Series
A Preferred stock |
Subsequent
Sales of Unregistered Securities (Continued)
| Date | |
Purchaser | |
Shares | | |
Price
per share | | |
Amount
$ | | |
Consideration | |
Class/Series |
| January
31, 2014 | |
Affiliate
of Company | |
| 3,796,521,515 | | |
$ | 0.00003 | | |
$ | 113,895.65 | | |
Direct
investment pursuant to the terms of a Securities Purchase Agreement | |
Restricted
Common stock |
| January
31, 2014 | |
Affiliate
of Company | |
| 2 | | |
$ | 1,670.00 | | |
$ | 3,340.00 | | |
Direct
investment pursuant to the terms of a Securities Purchase Agreement | |
Series
A Preferred stock |
| January
31, 2014 | |
Affiliate
of Company | |
| 441,930 | | |
$ | 0.75 | | |
$ | 331,447.50 | | |
Direct
investment pursuant to the terms of a Securities Purchase Agreement | |
Series
B Preferred stock |
| March
25, 2014 | |
Unaffiliated
party | |
| 100,000,000 | | |
$ | 0.0001 | | |
$ | 10,000.00 | | |
Services | |
Common
stock |
| March
31, 2014 | |
Affiliate
of Company | |
| 266,666,667 | | |
$ | 0.00007 | | |
$ | 20,000.00 | | |
Direct
investment pursuant to the terms of a Securities Purchase Agreement | |
Restricted
Common stock |
| April
14, 2014 | |
Affiliate
of Company | |
| 1,750,000,000 | | |
$ | 0.002 | | |
$ | 4,142,300.16 | | |
Conversion
of 700,000 shares of Series B Preferred stock | |
Common
stock |
| May
16, 2014 | |
Unaffiliated
party | |
| 860,000,000 | | |
$ | 0.0001 | | |
$ | 86,000.00 | | |
Services | |
Common
stock |
| June
16, 2014 | |
Unaffiliated
party | |
| 1,428,571,429 | | |
$ | 0.00007 | | |
$ | 100,000.00 | | |
Conversion
of Company debt | |
Common
stock |
| September
23, 2014 | |
Assignee
of debtor | |
| 3,167,500,000 | | |
$ | 0.00002 | | |
$ | 55,082.83 | | |
Conversion
of accrued other liabilities | |
Common
stock |
| October
8, 2014 | |
Unaffiliated
party | |
| 183,690 | | |
$ | 1.00 | | |
$ | 183,690.00 | | |
Conversion
of 1,836,896,308 shares of Common stock | |
Series
B Preferred stock |
Subsequent
Other Material Agreements
On
January 24, 2014, the Company signed a letter of intent (the “LOI”) and a collaborative effort agreement (the “CE
Agreement”) with Shredderhotline.com Company (“Shredderhotline”) and Dan Scott Burda, Shredderhotline’s
President/Owner. The LOI includes a stock purchase equal to 10% of each stock classes’ authorized shares at the time of
execution in exchange for $448,683 in total cash and other assets to the Company. The cash portion is $44,868. The shares by stock
class issued February 4, 2014 was two restricted shares of the Company’s Class A preferred stock, 441,930 restricted shares
of the Company’s Class B preferred stock and 3,796,521,515 restricted shares of the Company’s common stock. In general,
the CE Agreement is a long-term collaboration with the intent of the Company receiving over time all of Shredderhotline’s
assets, including complete customer database, shredder patents and recycle plant designs. In addition, the CE Agreement provides
that the two ranking executive officers of both companies will collaborate on future sales and operations within a newly formed
wholly owned subsidiary of the Company, Garb Global Services, Inc. (“Garb Global”).
On
November 18, 2014, the Company and Shredderhotline mutually determined that their business interests had diverged and the Company
and Shredderhotline released one another from their rights and obligations under the letter of intent and collaborative effort
agreements, both dated January 24, 2014. Garb Global will continue as an operating subsidiary of the Company.
On
May 7, 2014, the Company entered into a letter of intent with Pro Peke Power LLC to lease to own an office and warehouse’s
16,838 square foot portion of the property’s total 55,785 square foot space located at 1185 Gooden Xing, Largo, Florida.
Lease payments are $7,000 per month with $5,000 per month being applied to the $1,385,000 purchase price. A cash deposit of $7,000
is also being applied to the purchase price. On June 16, 2014, the Company entered into the lease to own agreement with the aforementioned
terms of the May 7, 2014 letter of intent. Since the lease is considered a capital lease, the Company recorded the $1,385,000
as a building asset and accrued other liability. On September 1, 2014, the Company began occupancy. The property purchase is expected
to close early in the nine months ended June 30, 2015.
On
June 18, 2014, the Company entered into an asset purchase agreement to acquire all of the assets of Chubby Glass, LLC located
in Boulder, Colorado for $189,000 cash terms. On September 26, 2014, the Company also entered into a five year employment agreement
with one of Chubby Glass LLC’s principals, Eric Ernst, that commences on the closing date at a salary of $5,000 per month.
The acquisition is expected to close early in the nine months ended June 30, 2015.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
The
Company has a long history in the fast growing industry of waste recycling and specifically related to waste-to-energy, upon which
the Company is building. Garb is organized to utilize both next-generation machines and new technologies to vertically integrate
into the waste refinement, recycling and energy industries. The current revised company emphasis (effective August 21, 2013) is
in profitable new and “green” solutions for waste-to-energy, alternate energy sources, gas drilling, fuel enhancements,
improving energy usage efficiency and utilizing recycled material in producing both useful and desirable products manufactured
in its own plants. The Company’s use of its first industrial manufacturing property and equipment will be to manufacture
wood pellets to be used as an alternate power fuel and for farm and agricultural applications. In addition, this manufacturing
facility will utilize power saving technology including the use of recycled materials as fuel that will result in lower operating
costs. Also, excess electricity will be generated that may be sold back to the power company, thereby generating an additional
source of revenue.
Garb
Oil & Power Corporation (the “Company” or “Garb”) was incorporated in the State of Utah in 1972 under
the name Autumn Day, Inc. The Company changed its name to Energy Corporation International in 1978 and to Garb-Oil Corporation
of America in 1981, which marked the start of the Company’s development state in the energy and recycling industries. The
Company changed its name to Garb Oil & Power Corporation in 1985 and then to Garb Corporation in May 2013. In February 2014,
the Company changed its name back to Garb Oil & Power Corporation. The Company’s activities have consisted of raising
capital and developing technology related to waste-to-energy electricity production, pyrolysis (extraction of oil, carbon, and
steel from used tires), and recovery of used rubber from large off-the-road tires, repair and sale of used truck tires, sale of
new truck tires and sale of industrial shredders.
Effective
August 21, 2013, all of the Company’s former executive officers and directors resigned. Also effective August 21, 2013,
following the resignation of the Company’s former management, Ms. Tammy Taylor was appointed as the Company’s Chief
Executive Officer, President and Principal Financial Officer, and Ms. M. Aimee Coleman was appointed as the Company’s Corporate
Secretary and Principal Accounting Officer. Ms. Taylor was also appointed as the Company’s sole director.
On
October 27, 2009, the Company entered into an agreement to purchase Resource Protection Systems GmBH, a company organized and
currently active under the laws of Germany (“RPS”). The purchase was for all outstanding shares, as well as for specified
RPS assets and liabilities. The RPS specified assets were not transferred to the Company and therefore the purchase was not fully
consummated.
On
January 15, 2010, RPS purchased 80% of the issued and outstanding stock of Newview S.L., a company organized under the laws of
Spain (“Newview”). The Company has been unable to determine whether Newview is currently active.
The
Company’s auditor for 2009 and 2010 was also engaged by current management to audit years 2011 through 2014 and review the
first three quarters of years 2012 through 2014.
The
Company’s financial statements from the year ended December 31, 2009 through the three months ended March 31, 2013 each
contains its audited or reviewed, as the case may be, consolidated financial statements for the Company and its subsidiaries,
which included RPS consolidated financials that were converted into United States Dollars (USD). The Company had included RPS
and Newview as Company subsidiaries and accounted for as entities under common control, since RPS, Newview, and the Company had
common management during the stated period of time. As the transaction combined two commonly controlled entities that historically,
prior to October 27, 2009, had not been presented together, the resulting financial statements were, in effect, considered those
of a different reporting entity. This resulted in a change in reporting entity, which required retrospectively combining the entities
for all periods presented as if the combination had been in effect since inception of common control. The financial information
of previously separate entities, prior to the acquisition date, was shown as combined.
On
January 24, 2014, the Company signed a letter of intent (the “LOI”) and a collaborative effort agreement (the “CE
Agreement”) with Shredderhotline.com Company (“Shredderhotline”) and Dan Scott Burda, Shredderhotline’s
President/Owner. In general, the CE Agreement provides that the two ranking executive officers of both companies will collaborate
on future sales and operations within a newly formed wholly owned subsidiary of the Company, Garb Global Services, Inc. (“Garb
Global”). On November 18, 2014, the Company and Shredderhotline mutually determined that their business interests had diverged
and the Company and Shredderhotline released one another from their rights and obligations
under the LOI and CE Agreement both dated January 24, 2014. Garb Global will continue as an operating subsidiary of the Company.
Our
Industry
The
industry in which Garb is operating is still in its maturing stages. Technological developments, the economic climate and the
growing global awareness of waste as a possible raw material resource, have changed the recycling industry, placing demands on
the industry for new products and for new solutions. Garb is dedicated to creating products that increases energy efficiency and
reduces the carbon footprint while helping to preserve the environment. With its knowledge of solutions, its comprehensive product
portfolio, its experience and, above all, with personnel and advisors who understand the industry, Garb will provide superior
products and services into profitable solutions that will provide the Company with a competitive advantage in the market and do
our part in making the world a greener place while passing cost savings on tour customers.
Our
Markets
Tires
and Commercial Waste Shredders: Garb’s past has been resurrected by current management, new truck tires and commercial
waste shredders. In addition, Garb is currently in the development stage to enter into the retread truck tire production and sales
market.
Waste-to-Energy:
Waste-to-energy is considered a renewable resource since its fuel source, garbage and other materials that have been destined
to landfills, is sustainable and non-depletable. According to the U.S. Environmental Protection Agency, waste-to-energy is a “clean,
reliable, renewable source of energy.”
In
2012, Americans generated about 251 million tons of trash and recycled and composted almost 87 million tons of this material,
equivalent to a 34.5 percent recycling rate.
Opportunities
abound in the recycling industry to produce power and Garb is developing this area.
Biomass
and Alternate Fuels: The United States has been moving towards greater energy independence and the increase of clean renewable
fuels. Biofuel is simple to use, biodegradable, nontoxic, and essentially free of sulfur and aromatics. Alternate energy sources
can produce more net energy for less money than current technologies. Garb is currently pursuing multiple avenues in this growing
arena.
Hemp
and Medical Marijuana Paraphernalia: Within the cannabis industry, Garb has interest in the potential use of hemp as one of
the raw materials utilized in the production of alternate fuels and energy. To further these endeavors, Garb has begun to create
the Company’s first medical marijuana paraphernalia production operation in the State of Colorado.
Patents,
Trademarks and Proprietary Data
The
Company has received United States Patent No. 5,299,748 on the OTR Tire Disintegrator System design which expired April 5, 2011,
Patent No. 5,590,838 which expired January 7, 2014 and patent number 6,015,105 which expires January 18, 2018. An additional patent
improvement was granted in Canada on July 6, 1999 as Canadian Patent No. 2,178,326 which expires March 23, 2015.
Current
Management Overview
Effective
August 21, 2013, all of the Company’s former executive officers and directors resigned. Also effective August 21, 2013,
following the resignation of the Company’s former management, Ms. Tammy Taylor was appointed as the Company’s Chief
Executive Officer, President and Principal Financial Officer, and Ms. M. Aimee Coleman was appointed as the Company’s Corporate
Secretary and Principal Accounting Officer. Ms. Taylor was also appointed as the Company’s sole director.
Current
management of the Company is pursuing avenues of generating cash or revenues during the next twelve months. The Company is pursuing
sales of new truck tires and commercial waste shredders and is developing waste-to-energy, biomass alternate fuels including hemp
and medical marijuana paraphernalia manufacturing operations. The Company continues to pursue financing to build and operate its
own manufacturing plants. We believe that our current Company personnel and advisors have the necessary industry expertise and
marketing skills to implement our current business model.
Results
of Operations
Comparison
of the Three months ended March 31, 2013 and March 31, 2012
Revenues
During
the three months ended March 31, 2013 and March 31, 2013 the Company recognized no revenues from sales.
General
and Administrative Expenses
General
and administrative expenses decreased $438,701 to $369,531 for the three months ended March 31, 2013, from $808,233 for the three
months ended March 31, 2013. The decrease was primarily related to consulting fees decreasing $389,164 and bad debt expense decreasing
$51,184.
Other
Income (Expense)
Other
income (expense) increased by $544,122 to $256,498 for the three months ended March 31, 2013, from $(287,624) for the three months
ended March 31, 2013. The increase in other income was primarily due to a $434,162 net gain on extinguishment of debt.
Net
Loss
Comprehensive
loss was $113,033 and $1,095,857 for the three months ended March 31, 2013 and March 31, 2013, respectively. Net loss was attributable
to a lack of revenue, together with professional and consulting fees, as discussed above. We expect to continue to incur losses
until such time as we can begin to generate significant revenue from operations.
Liquidity
and Capital Resources
Liquidity
is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. The Company is not
generating significant revenues. Operating expenses for the Company have been paid in part from short-term unsecured notes and
the issuance of Company stock. The Company also has a working capital deficit of $6,156,693 and stockholders’ deficit of
$6,172,449 at March 31, 2013.
The
Company has incurred and continued to incur indebtedness in order to finance its operations. As of March 31, 2013, the Company’s
total liabilities were $6,177,147, with a working capital deficit of $6,156,693. See Note 4 – Related Party Transactions
and Note 5 – Notes Payable of the Company’s unaudited financial statements appearing elsewhere in this quarterly report
on Form 10-Q.
Net
cash used in operating activities was $(9,305) and $(110,972) for the three months ended March 31, 2013 and March 31, 2012, respectively.
Cash was primarily used to fund our net losses from operations.
The
Company used $0 net cash in investing activities for the three months ended March 31, 2013 and March 31, 2012.
Net
cash provided by financing activities was $14,000 and $94,000 for the three months ended March 31, 2013 and March 31, 2012, respectively.
During the three months ended March 31, 2013, we received cash of $14,000 from the issuance of notes payable, of which $0 cash
was used as repayments of financing activities.
Going
Concern
The
financial statements accompanying this report have been prepared on a going concern basis, which implies that our company will
continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has
not generated sufficient revenues in the last two years to cover all operating and overhead costs, and has never paid any dividends
and is unlikely to pay dividends in the immediate or foreseeable future. The continuation of our company as a going concern is
dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing
to achieve our operating objectives, and the attainment of profitable operations. As of March 31, 2013, our company has accumulated
losses of $14,536,040. We do not have sufficient working capital to enable us to carry out our stated plan of operation for the
next twelve months.
Due
to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above in their report
on the financial statements for the year ended December 31, 2012, the Company’s independent auditors have included an explanatory
paragraph regarding concerns about our ability to continue as a going concern. The continuation of our business is dependent upon
our ability to raise additional financial support. The issuance of additional equity securities by the Company could result in
a significant dilution in the equity interests of our current shareholders. Obtaining commercial loans, assuming those loans would
be available, will increase our liabilities and future cash commitments.
Item
3. Quantitative and Qualitative Disclosures about Market Risk
Not
applicable
Item
4. Controls and Procedures
Under
the supervision and with the participation of our current management, including our Chief Executive Officer and Corporate Secretary
as our Principal Accounting Officer (the “Certifying Officers”), we evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (the
“Exchange Act”)) as of March 31, 2013. Based upon that evaluation, the Certifying Officers concluded that, as of the
end of the period covered by this report, our disclosure controls and procedures were not effective.
We
believe that our unaudited consolidated financial statements contained in this quarterly report on Form 10-Q fairly present our
financial position, results of operations and cash flows for the three months ended March 31, 2013 in all material respects.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation.
Changes
in Internal Control Over Financial Reporting.
There
have been no changes in our internal control over financial reporting during the last fiscal quarter covered by this quarterly
report on Form 10-Q that have materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.
PART
II – Other Information
Item
1. Legal Proceedings
We
are not a party to any material litigation, nor to the knowledge of management, is any litigation threatened against us that may
materially affect us.
Item
1A. Risk Factors
Not
required for smaller reporting companies.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
| Date | |
Purchaser | |
Shares | | |
Price
per
share | | |
Amount
$ | | |
Consideration | |
Class/Series |
| February
8, 2013 | |
Officer
at time of issuance | |
| 1,200,000 | | |
$ | 0.0001 | | |
$ | 120.00 | | |
Conversion
of 12,000,000,000 shares of Common stock | |
Series
B Preferred stock |
| February
8, 2013 | |
Officer
at time of issuance | |
| 600,000 | | |
$ | 0.0001 | | |
$ | 60.00 | | |
Conversion
of 6,000,000,000 shares of Common stock | |
Series
B Preferred stock |
| February
28, 2013 | |
Unaffiliated
party | |
| 50,000,000 | | |
$ | 0.0001 | | |
$ | 5,000.00 | | |
Services | |
Common
stock |
| February
28, 2013 | |
Unaffiliated
party | |
| 125,000,000 | | |
$ | 0.0001 | | |
$ | 12,500.00 | | |
Conversion
of accrued expenses | |
Common
stock |
| February
28, 2013 | |
Unaffiliated
party | |
| 125,000,000 | | |
$ | 0.0001 | | |
$ | 12,500.00 | | |
Conversion
of accrued expenses | |
Common
stock |
| March
12, 2013 | |
Unaffiliated
party | |
| 2,040,000,000 | | |
$ | 0.0001 | | |
$ | 204,000.00 | | |
Conversion
of Company debt | |
Common
stock |
| March
12, 2013 | |
Unaffiliated
party | |
| 2,323,000,000 | | |
$ | 0.0001 | | |
$ | 232,300.00 | | |
Conversion
of Company debt | |
Common
stock |
These
shares were issued in reliance on exemptions form registration provided by Sections 4(a)(2) and 3(a)(9) of the Securities Act.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not
applicable.
Item
5. Other Information
None.
Item
6. Exhibits
| Exhibit
No. |
|
Description
|
|
Location
|
| 31.1 |
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Principal Financial Officer. |
|
Filed
herewith. |
| |
|
|
|
|
| 31.2 |
|
Rule
13a-14(a)/15d-14(a) Certification of Principal Accounting Officer. |
|
Filed
herewith. |
| |
|
|
|
|
| 32.1 |
|
Certification
of Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
Filed
herewith. |
| |
|
|
|
|
| 101.INS |
|
XBRL Instance Document* |
|
|
| 101.SCH |
|
XBRL Taxonomy Extension
Schema Document* |
|
|
| 101.CAL |
|
XBRL Taxonomy Extension
Calculation Linkbase Document* |
|
|
| 101.DEF |
|
XBRL Taxonomy Extension
Definition Linkbase Document* |
|
|
| 101.LAB |
|
XBRL Taxonomy Extension
Label Linkbase Document* |
|
|
| 101.PRE |
|
XBRL Taxonomy Extension
Presentation Linkbase Document* |
|
|
* In accordance
with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q
shall be deemed “furnished” and not “filed”.
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.
| |
GARB
OIL & POWER CORPORATION |
| |
|
|
| Date:
March 24, 2015 |
By: |
/s/
Tammy Taylor |
| |
|
Tammy Taylor,
Chief Executive Officer |
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.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Tammy Taylor |
|
Chief
Executive Officer and Director |
|
March
24, 2015 |
| Tammy Taylor |
|
(principal executive officer and principal financial officer) |
|
|
| |
|
|
|
|
| /s/
M. Aimee Coleman |
|
Corporate
Secretary (principal accounting officer) |
|
March
24, 2015 |
| M. Aimee Coleman |
|
|
|
|
Exhibit
31.1
Rule
13a-14(a)/15d-14(a) Certification
I,
Tammy Taylor, certify that:
1.
I have reviewed this quarter report on Form 10-Q for the quarterly period ended March 31, 2013 of Garb Oil & Power Corporation
(the “registrant”);
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 24, 2015
| By: |
/s/
Tammy Taylor |
|
| |
Tammy Taylor,
Chief Executive Officer |
|
| |
(Principal Executive
Officer and Principal Financial Officer) |
|
Exhibit
31.2
Rule
13a-14(a)/15d-14(a) Certification
I,
M. Aimee Coleman, certify that:
1.
I have reviewed this quarter report on Form 10-Q for the quarterly period ended March 31, 2013 of Garb Oil & Power Corporation
(the “registrant”);
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March
24, 2015
| By: |
/s/
M. Aimee Coleman |
|
| |
M. Aimee Coleman,
Corporate Secretary |
|
| |
(Principal Accounting
Officer) |
|
Exhibit
32.1
Section
1350 Certification
In
connection with the Quarter Report on Form 10-Q of Garb Oil & Power Corporation (the “Company”) for the quarterly
period ended March 31, 2013 as filed with the Securities and Exchange Commission (the “Report”), I, Tammy Taylor,
Chief Executive Officer and I, M. Aimee Coleman, Corporate Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our my knowledge:
| |
1. |
The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| |
|
|
| |
2. |
The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company. |
| Date: March 24,
2015 |
/s/
Tammy Taylor |
| |
Tammy Taylor,
Chief Executive Officer |
| |
(Principal Executive
Officer and Principal Financial Officer) |
| |
|
| Date: March 24,
2015 |
/s/
M. Aimee Coleman |
| |
M. Aimee Coleman,
Corporate Secretary
(Principal Accounting Officer) |
A
signed original of the written statements above required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to
Garb Oil & Power Corporation and will be retained by Garb Oil & Power Corporation and furnished to the U.S. Securities
and Exchange Commission or its staff upon request. The forgoing certifications are being furnished to the Securities and Exchange
Commission as an exhibit to the Quarter Report on Form 10-Q for the three months ended March 31, 2013, and they shall not be considered
filed as part of such report.
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