UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
[X]
ANNUAL REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2012
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
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Name
of each exchange on which registered |
None |
|
None |
Securities
registered pursuant to Section 12(g) of the Act:
Common
stock, no par value
(Title
of class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ]
No [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ]
No [X]
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [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]
State
the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price
at which the common stock was sold, or the average bid and asked price of such common stock, as of the last business day of the
registrant’s most recently completed second fiscal quarter, June 30, 2012: $554,091.
The number
of shares of issuer’s common stock outstanding as of March 9, 2015: 47,497,578,456.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
FORM
10-K
FOR
THE YEAR ENDED DECEMBER 31, 2012
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 annual report on Form 10-K, 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 annual report on Form 10-K 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
Item
1. Business
BUSINESS
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.
HISTORY
OF COMPANY
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.
COMPANY
SUBSIDIARIES
Resource
Protection Systems GmBH
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. As consideration, the Company paid the shareholders of RPS an aggregate of 27,829,291 shares of the
Company’s common stock and options to purchase 100,000,000 shares of the Company’s common stock with an expiration
date of November 1, 2014, and an exercise price equal to one-tenth of the closing ask price for 10 trading days prior to the exercise
of the option. The options were contingent upon the Company increasing its authorized shares, which it did in March 2010. The
RPS specified assets were not transferred to the Company and therefore the purchase was not fully consummated. All of the options
expired on November 1, 2014 without being exercised.
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 quarter ended June 30, 2013 each contains
its audited or reviewed, as the case may be, consolidated financial statements for the Company and its subsidiaries, which includes
RPS consolidated financials that were converted into United States Dollars (USD). The Company has 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 this period of time. As the transaction combines two commonly controlled entities that historically, prior to October 27,
2009, have not been presented together, the resulting financial statements are, 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, is now shown as combined. The former management left the Company during the quarter ended September
30, 2013 (on August 21, 2013). Therefore beginning with the quarter ended September 30, 2013, entities under common control ceased
to exist since the Company did not have the same management as RPS and Newview and the Company’s financial statements omit
the RPS and Newview financial statements.
Garb
Global Services, Inc.
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 have mutually determined that their business interests have diverged and
the Company and Shredderhotline have 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.
EMPLOYEES
The
Company’s President and CEO, Tammy Taylor, devotes 40 hours, or more, per week to the Company’s business. The Company’s
Corporate Secretary, M. Aimee Coleman, devotes 10 hours, or more, per week to the Company’s business. All additional work
is performed on a sub-contract basis.
Additional
personnel will be required when the Company expands its business or enters into agreements for construction of waste-to-energy
plants, waste-rubber plants or scrap plants. The Company does not anticipate problems in finding suitable additional personnel.
The
Company believes its relationship with its employees to be good. The Company is not a party to any collective bargaining agreement.
RESEARCH
AND DEVELOPMENT
During
the years ended December 31, 2012 and 2011, the Company has not expended funds on research and development activities. Garb plans
to grow its research and development budget to 8% of its revenue during 2015.
ENVIRONMENTAL
REGULATION
Neither
the Company nor its subsidiaries believe that any of its activities result in harmful discharge of pollutants in the air, water
or soil.
Power
plants to be built by the Company in the future utilizing tires as fuel will be required to comply with state and federal regulations
regarding the discharge of pollutants into the atmosphere. The Company believes that the plants can comply with such regulations
without material impact on the Company.
AVAILABLE
INFORMATION
We
are in the process of completing all applicable annual reports on Form 10-K and quarterly reports on Form 10-Q for the periods
beginning with the fiscal year ended December 31, 2011 through the fiscal year ended December 31, 2014. We will file current reports
on Form 8-K, proxy statements and other reports as required after the Company becomes current pursuant to Sections 13(a) and 15(d)
of the Exchange Act.
The
public may read and copy any materials we file or furnish with the SEC at the SEC’s web site that contains reports, proxy
and information statements, and other information regarding reports that we file or furnish electronically with them at http://www.sec.gov.
Item
1A. Risk Factors
Not
required for smaller reporting companies.
Item
1B. Unresolved Staff Comments
Not
required for smaller reporting companies.
Item
2. Properties
The
Company’s current executive offices are located at 1185 Gooden Xing, Bldg. C, Largo, FL under a lease to purchase agreement.
The offices and warehouse consist of approximately 16,838 square feet. The purchase of the entire 55,785 square foot offices and
warehouses space is expected to occur during the second quarter of 2015.
Item
3. 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
4. Mine Safety Disclosures
Not
applicable.
PART
II
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our
common stock is quoted in The OTC Pink tier of the OTC Markets under the symbol of “GARB”.
The
following table sets forth the range of high and low representative bid quotations for the periods indicated.
| |
High | | |
Low | |
Fiscal Year 2012 | |
| | | |
| | |
First Quarter | |
$ | 0.0008 | | |
$ | 0.0001 | |
Second Quarter | |
$ | 0.0002 | | |
$ | 0.0001 | |
Third Quarter | |
$ | 0.0002 | | |
$ | 0.0001 | |
Fourth Quarter | |
$ | 0.0020 | | |
$ | 0.0001 | |
| |
High | | |
Low | |
Fiscal Year 2011 | |
| | |
| |
First Quarter | |
$ | 0.0085 | | |
$ | 0.0017 | |
Second Quarter | |
$ | 0.0075 | | |
$ | 0.0012 | |
Third Quarter | |
$ | 0.0075 | | |
$ | 0.0014 | |
Fourth Quarter | |
$ | 0.0017 | | |
$ | 0.0006 | |
The
foregoing OTC Market quotations are inter-dealer quotations without retail mark-ups, mark-downs or commissions and may not represent
actual transactions.
Dividends
No
cash dividends have been paid by the Company in the past, and dividends are not contemplated in the foreseeable future. Utah law
currently prohibits the payment of dividends since the Company’s liabilities exceed its assets. Dividends will be dependent
directly upon the earnings of the Company, financial needs, and other similar unpredictable factors. For the foreseeable future,
it is anticipated that any earnings that may be generated from the operations of the Company will be used to finance the operations
of the Company and dividends will not be declared for shareholders. The Company is not subject to any contractual restrictions
on the payment of dividends.
Securities
Authorized for Issuance under Compensation Plans
The
Company has no equity compensation plans under which equity securities of the Company are authorized for issuance.
Sales
of Unregistered Securities
Date | |
Purchaser | |
Shares | | |
Price
per share | | |
Amount
$ | | |
Consideration | |
Class/Series |
January 9, 2012 | |
Unaffiliated party | |
| 75,000,000 | | |
$ | 0.0007 | | |
$ | 52,500 | | |
Services | |
Common stock |
January 9, 2012 | |
Unaffiliated party | |
| 50,000,000 | | |
$ | 0.0007 | | |
$ | 35,000 | | |
Services | |
Common stock |
January 9, 2012 | |
Officer at time of issuance | |
| 1 | | |
$ | 67,394.00 | | |
$ | 67,394 | | |
Services | |
Series A Preferred stock |
January 9, 2012 | |
Officer at time of issuance | |
| 1 | | |
$ | 67,394.00 | | |
$ | 67,394 | | |
Services | |
Series A Preferred stock |
January 9, 2012 | |
Officer at time of issuance | |
| 1 | | |
$ | 67,394.00 | | |
$ | 67,394 | | |
Services | |
Series A Preferred stock |
January 19, 2012 | |
Assignee of Note Holder | |
| 24,489,795 | | |
$ | 0.0007 | | |
$ | 17,143 | | |
Conversion of Company debt | |
Common stock |
January 26, 2012 | |
Unaffiliated party | |
| 10,000,000 | | |
$ | 0.0007 | | |
$ | 7,000 | | |
Services | |
Common stock |
February 2, 2012 | |
Note Holder | |
| 71,428,571 | | |
$ | 0.0005 | | |
$ | 35,714 | | |
Conversion of Company debt | |
Common stock |
February 2, 2012 | |
Assignee of Note Holder | |
| 71,428,571 | | |
$ | 0.0005 | | |
$ | 35,714 | | |
Conversion of Company debt | |
Common stock |
February 21, 2012 | |
Assignee of Note Holder | |
| 75,000,000 | | |
$ | 0.0004 | | |
$ | 30,000 | | |
Conversion of Company debt | |
Common stock |
February 22, 2012 | |
Unaffiliated party | |
| 2,500,000 | | |
$ | 0.0005 | | |
$ | 1,250 | | |
Services | |
Common stock |
February 29, 2012 | |
Note Holder | |
| 110,000,000 | | |
$ | 0.0002 | | |
$ | 16,500 | | |
Conversion of Company debt | |
Common stock |
March 1, 2012 | |
Assignee of Note Holder | |
| 71,428,571 | | |
$ | 0.0004 | | |
$ | 28,571 | | |
Conversion of Company debt | |
Common stock |
March 2, 2012 | |
Assignee of Note Holder | |
| 125,000,000 | | |
$ | 0.0002 | | |
$ | 25,000 | | |
Conversion of Company debt | |
Common stock |
March 7, 2012 | |
Unaffiliated party | |
| (500,000 | ) | |
$ | 0.0020 | | |
$ | (1,000 | ) | |
Services | |
Common stock |
March 7, 2012 | |
Unaffiliated party | |
| 1,000 | | |
$ | 2.50 | | |
$ | 2,500 | | |
Services | |
Series B Preferred stock |
March 7, 2012 | |
Unaffiliated party | |
| 9 | | |
$ | 2.50 | | |
$ | 23 | | |
Services | |
Series B Preferred stock |
March 9, 2012 | |
Assignee of Note Holder | |
| 250,000,000 | | |
$ | 0.0002 | | |
$ | 50,000 | | |
Conversion of Company debt | |
Common stock |
March 12, 2012 | |
Assignee of Note Holder | |
| 10,000,000 | | |
$ | 0.0002 | | |
$ | 2,000 | | |
Conversion of Company debt | |
Common stock |
March 13, 2012 | |
Unaffiliated party | |
| 750,000,000 | | |
$ | 0.0002 | | |
$ | 150,000 | | |
Services | |
Common stock |
March 13, 2012 | |
Assignee of Note Holder | |
| 250,000,000 | | |
$ | 0.0001 | | |
$ | 12,500 | | |
Conversion of Company debt | |
Common stock |
Sales
of Unregistered Securities (Continued)
Date | |
Purchaser | |
Shares | | |
Price
per share | | |
Amount
$ | | |
Consideration | |
Class/Series |
March
14, 2012 | |
Note Holder | |
| 110,000,000 | | |
$ | 0.0001 | | |
$ | 7,500 | | |
Conversion of Company debt | |
Common stock |
March 28, 2012 | |
Unaffiliated party | |
| 150,000,000 | | |
$ | 0.0001 | | |
$ | 15,000 | | |
Services | |
Common stock |
April 2, 2012 | |
Assignee of Note Holder | |
| 100,000,000 | | |
$ | 0.0001 | | |
$ | 10,000 | | |
Conversion of Company debt | |
Common stock |
April 3, 2012 | |
Assignee of Note Holder | |
| 50,000,000 | | |
$ | 0.0001 | | |
$ | 2,500 | | |
Conversion of Company debt | |
Common stock |
June 11, 2012 | |
Assignee of Note Holder | |
| 1,500,000,000 | | |
$ | 0.0001 | | |
$ | 150,000 | | |
Conversion of Company debt | |
Common stock |
June 25, 2012 | |
Assignee of Note Holder | |
| 300,000,000 | | |
$ | 0.0001 | | |
$ | 15,000 | | |
Conversion of Company debt | |
Common stock |
June 25, 2012 | |
Officer at time of issuance | |
| 12,000,000,000 | | |
$ | 0.000003 | | |
$ | 40,000 | | |
Conversion of accrued salary | |
Common stock |
June 25, 2012 | |
Officer at time of issuance | |
| 12,000,000,000 | | |
$ | 0.000003 | | |
$ | 40,000 | | |
Conversion of accrued salary | |
Common stock |
June 25, 2012 | |
Officer at time of issuance | |
| 6,000,000,000 | | |
$ | 0.000003 | | |
$ | 20,000 | | |
Conversion of accrued salary | |
Common stock |
August 25, 2012 | |
Officer at time of issuance | |
| 13,445,378,151 | | |
$ | 0.0001 | | |
$ | 1,344,538 | | |
Employee compensation | |
Common stock |
August 25, 2012 | |
Officer at time of issuance | |
| 2 | | |
$ | 67,394.00 | | |
$ | 134,788 | | |
Services | |
Series A Preferred stock |
September 5, 2012 | |
Assignee of Note Holder | |
| 1,000,000,000 | | |
$ | 0.0001 | | |
$ | 100,000 | | |
Conversion of Company debt | |
Common stock |
September 5, 2012 | |
Assignee of Note Holder | |
| 750,000,000 | | |
$ | 0.0001 | | |
$ | 75,000 | | |
Conversion of Company debt | |
Common stock |
September 5, 2012 | |
Note Holder | |
| 2,000,000,000 | | |
$ | 0.0001 | | |
$ | 200,000 | | |
Conversion of Company debt | |
Common stock |
September 5, 2012 | |
Assignee of Note Holder | |
| 1,000,000,000 | | |
$ | 0.0001 | | |
$ | 100,000 | | |
Conversion of Company debt | |
Common stock |
September 10, 2012 | |
Officer at time of issuance | |
| 2,500,000 | | |
$ | 10.18 | | |
$ | 25,445,378 | | |
Conversion of Common stock | |
Series B Preferred stock |
September 11, 2012 | |
Assignee of Note Holder | |
| 1,000,000,000 | | |
$ | 0.0001 | | |
$ | 100,000 | | |
Conversion of Company debt | |
Common stock |
September 18, 2012 | |
Assignee of Note Holder | |
| 2,000,000,000 | | |
$ | 0.0001 | | |
$ | 200,000 | | |
Conversion of Company debt | |
Common stock |
September 24, 2012 | |
Note Holder | |
| 449,689,800 | | |
$ | 0.0001 | | |
$ | 22,484 | | |
Conversion of Company debt | |
Common stock |
October 4, 2012 | |
Note Holder | |
| 3,000,000,000 | | |
$ | 0.0001 | | |
$ | 300,000 | | |
Conversion of Company debt | |
Common stock |
October 4, 2012 | |
Note Holder | |
| 3,000,000,000 | | |
$ | 0.0001 | | |
$ | 300,000 | | |
Conversion of Company debt | |
Common stock |
October 4, 2012 | |
Note Holder | |
| 3,000,000,000 | | |
$ | 0.0001 | | |
$ | 300,000 | | |
Conversion of Company debt | |
Common stock |
October 4, 2012 | |
Note Holder | |
| 2,250,000,000 | | |
$ | 0.0001 | | |
$ | 225,000 | | |
Conversion of Company debt | |
Common stock |
Sales
of Unregistered Securities (Continued)
Date | |
Purchaser | |
Shares | | |
Price
per share | | |
Amount
$ | | |
Consideration | |
Class/Series |
October
19, 2012 | |
Note Holder | |
| 2,000,000,000 | | |
$ | 0.0001 | | |
$ | 200,000 | | |
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
6. Selected Financial Data
Not
applicable.
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 Year Ended December 31, 2012 and 2011
Revenues
During
the years ended December 31, 2012 and 2011, the Company recognized no revenues from sales.
General
and Administrative Expenses
General
and administrative expenses decreased $217,318 to $3,054,996 for the year ended December 31, 2012, from $3,272,314 for the year
ended December 31, 2011. The decrease was related to travel expenses decreasing $200,876, promotion expense decreasing $211,723,
professional fees decreasing $276,379, and bad debt expenses decreasing $43,234. These decreases were partially offset by an increase
in consulting fees of $213,330 and an increase of employee compensation of $334,538.
Interest
Expense
Interest
expense was $536,800 and $681,035 for the years ended December 31, 2012 and 2011, respectively. The decrease in expense was primarily
due to an improved mix of interest terms.
Loss
on Conversion of Debt and Settlement of Accrued Interest
Loss
on conversion of debt and settlement of accrued interest was $2,186,430 and $582,605 for the years ended December 31, 2012 and
2011, respectively. This is a non-cash expense reported on the statements of operations. The substantial increase in expense was
due to a substantial increase in the average conversion rate of debt and settlement of accrued interest below the average market
value of the Company stock at the time the shares were issued.
Net
Loss
Comprehensive
loss was $5,780,798 and $4,532,677 for the years ended December 31, 2012 and 2011, respectively. Net loss was attributable to
a lack of revenue, together with the substantial loss on conversion of debt and settlement of accrued interest, 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 and stockholders’ deficit of $6,563,647 and $5,518,112,
respectively, at December 31, 2012 and December 31, 2011.
The
Company has incurred and continued to incur indebtedness in order to finance its operations. As of December 31, 2012, the Company’s
total liabilities were $6,567,536, with a working capital deficit of $6,563,647. See Note 4 – Related Party Transactions,
Note 6 – Commitments to Date and Note 8 – Notes Payable of the Company’s financial statements appearing elsewhere
in this annual report on Form 10-K.
Net
cash used in operating activities was $(157,842) and $(268,016) for the years ended December 31, 2012 and 2011, respectively.
Cash was primarily used to fund our net losses from operations.
Net
cash used in investing activities was $0 and $(3,997) for the years ended December 31, 2012 and 2011, respectively. The lower
cash used in investing activities during the year ended December 31, 2012 occurred since the Company did not use cash that was
received for investing activities.
Net
cash provided by financing activities was $144,000 and $242,300 for the years ended December 31, 2012 and 2011, respectively.
During the year ended December 31, 2012, we received cash of $144,000 from the issuance of notes payable, of which $0 cash was
used as repayments of financing activities.
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,
during the years ended December 31, 2012 and 2011, the Company has incurred a net loss of $5,780,798 and $4,532,677, respectively,
and as of December 31, 2012, the Company’s accumulated deficit was $14,423,007. 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.
Off
Balance Sheet Arrangements
None.
Item
7A. Quantitative and Qualitative Disclosures about Market Risk
Not
applicable.
Item
8. Financial Statements and Supplementary Data
See Index
to Financial Statements and Financial Statement Schedules appearing on pages F-1 through F-37 of this annual report on Form 10-K.
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2012 and 2011
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Garb Oil & Power Corporation
Largo, Florida
We have audited the accompanying consolidated
balance sheets of Garb Oil & Power Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated
statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Garb Oil & Power Corporation
and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for the years then
ended, in conformity with U.S. generally accepted accounting principles
The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial
statements, the Company’s continual net losses and large accumulated deficit, among other issues, raise substantial doubt
about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note
1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ HJ
& Associates, LLC |
|
HJ
& Associates, LLC |
|
Salt Lake
City, Utah |
|
March 24, 2015 |
|
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Balance Sheets
| |
December
31, | |
| |
2012 | | |
2011 | |
ASSETS | |
| | | |
| | |
Current
assets: | |
| | | |
| | |
Cash | |
$ | 3 | | |
$ | 17,544 | |
Accounts
receivable, net | |
| - | | |
| - | |
Total
current assets | |
| 3 | | |
| 17,544 | |
Property
and equipment, net | |
| 3,886 | | |
| 6,587 | |
| |
| | | |
| | |
Total
assets | |
$ | 3,889 | | |
$ | 24,131 | |
| |
| | | |
| | |
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT) | |
| | | |
| | |
Current
liabilities: | |
| | | |
| | |
Accounts
payable and accrued expenses | |
$ | 819,677 | | |
$ | 723,668 | |
Related
party payable | |
| 290,519 | | |
| 281,082 | |
Notes
payable | |
| 1,892,737 | | |
| 1,654,545 | |
Accrued
interest | |
| 1,420,243 | | |
| 1,303,569 | |
Wage
and payroll taxes payable | |
| 2,004,498 | | |
| 1,442,332 | |
Income
taxes payable | |
| 123,619 | | |
| 121,131 | |
Total
current liabilities | |
| 6,551,293 | | |
| 5,526,327 | |
Deferred
tax liabilities | |
| 16,243 | | |
| 15,916 | |
Total
long-term liabilities | |
| 16,243 | | |
| 15,916 | |
| |
| | | |
| | |
Total
liabilities | |
| 6,567,536 | | |
| 5,542,243 | |
| |
| | | |
| | |
Stockholders’
Deficit: | |
| | | |
| | |
Class
A preferred as of December 31, 2012; ($.0001 par value) 1,000,000 shares authorized, 7 shares outstanding as of December 31,
2012 and 2 shares outstanding as of December 31, 2011 | |
| - | | |
| - | |
Class
B preferred as of December 31, 2012; ($2.50 par value) 10,000,000 shares authorized, 2,694,298 shares outstanding as of December
31, 2012 and 193,289 shares issued and outstanding as of December 31, 2011 | |
| 6,735,745 | | |
| 483,222 | |
Common
stock as of December 31, 2012; (no par value) 50,000,000,000 shares authorized, 45,483,744,154 shares outstanding at December
31, 2012 and 1,878,278,845 shares outstanding at December 31, 2011 | |
| (18,823,864 | ) | |
| 2,209,651 | |
Preferred
Class A additional paid in capital | |
| 471,760 | | |
| 134,790 | |
Preferred
Class B additional paid in capital | |
| 19,366,825 | | |
| 171,448 | |
Accumulated
other comprehensive income | |
| 143,297 | | |
| 159,389 | |
Accumulated
deficit | |
| (14,423,007 | ) | |
| (8,642,209 | ) |
Total
Garb Oil & Power stockholders’ deficit | |
| (6,529,244 | ) | |
| (5,483,709 | ) |
Non-controlling
interest | |
| (34,403 | ) | |
| (34,403 | ) |
Total
stockholders’ deficit | |
| (6,563,647 | ) | |
| (5,518,112 | ) |
Total
liabilities and stockholders’ deficit | |
$ | 3,889 | | |
$ | 24,131 | |
The
accompanying notes are an integral part of these consolidated financial statements.
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Statements of Operations and Comprehensive Income (Loss)
| |
Year Ended December 31, | |
| |
2012 | | |
2011 | |
OPERATING EXPENSES | |
| | | |
| | |
Selling, general and administrative | |
$ | 3,054,996 | | |
$ | 3,272,314 | |
Total Operating Expenses | |
| 3,054,996 | | |
| 3,272,314 | |
| |
| | | |
| | |
LOSS FROM OPERATIONS | |
| (3,054,996 | ) | |
| (3,272,314 | ) |
| |
| | | |
| | |
OTHER INCOME (EXPENSE) | |
| | | |
| | |
Loss on extinguishment of debt | |
| (2,186,430 | ) | |
| (582,605 | ) |
Other income (loss) | |
| (2,572 | ) | |
| - | |
Interest expense | |
| (536,800 | ) | |
| (681,035 | ) |
Total Other Income (Expense) | |
| (2,725,802 | ) | |
| (1,263,640 | ) |
LOSS BEFORE INCOME TAXES | |
| (5,780,798 | ) | |
| (4,535,954 | ) |
PROVISION (BENEFIT) FOR INCOME TAXES | |
| - | | |
| - | |
| |
| | | |
| | |
LOSS BEFORE NON-CONTROLLING INTEREST | |
| (5,780,798 | ) | |
| (4,535,954 | ) |
Net Income (loss) attributable to non-controlling interest | |
| - | | |
| 3,277 | |
| |
| | | |
| | |
LOSS ATTRIBUTABLE TO GARB OIL & POWER | |
| (5,780,798 | ) | |
| (4,532,677 | ) |
| |
| | | |
| | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
| | | |
| | |
Foreign currency translation adjustment | |
| - | | |
| - | |
| |
| | | |
| | |
TOTAL COMPREHENSIVE LOSS | |
| (5,780,798 | ) | |
| (4,532,677 | ) |
Comprehensive income (loss) attributable to non-controlling interest | |
| - | | |
| - | |
COMPREHENSIVE LOSS ATTRIBUTABLE TO GARB OIL & POWER | |
$ | (5,780,798 | ) | |
$ | (4,532,677 | ) |
| |
| | | |
| | |
BASIC AND DILUTED LOSS PER COMMON SHARE ATTRIBUTABLE TO GARB OIL &
POWER SHAREHOLDERS | |
$ | (0.00 | ) | |
$ | (0.01 | ) |
| |
| | | |
| | |
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING | |
| 22,817,565,053 | | |
| 796,906,387 | |
The accompanying
notes are an integral part of these consolidated financial statements.
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Statements of Stockholders’ Deficit
| |
Preferred
Stock - A | | |
Preferred
Stock - B | | |
Common
Stock | | |
Accumulated | | |
| | |
Total | | |
| | |
| |
| |
($.0001
par value) | | |
($2.50
par value) | | |
(no
par value) | | |
Other | | |
| | |
GARB | | |
Non | | |
Total | |
| |
Shares | | |
Par
Amount | | |
APIC
Amount | | |
Shares | | |
Par
Amount | | |
APIC
Amount | | |
Shares | | |
Amount | | |
Comprehensive
Income | | |
Accumulated
Deficit | | |
Stockholders’
Deficit | | |
Controlling
Interest | | |
Stockholders’
Deficit | |
Balance, December 31, 2010 | |
| 2 | | |
$ | - | | |
$ | 134,790 | | |
| 205,004 | | |
$ | 512,510 | | |
$ | 171,448 | | |
| 126,446,842 | | |
$ | (1,101,548 | ) | |
$ | 112,177 | | |
$ | (4,109,532 | ) | |
$ | (4,280,155 | ) | |
$ | (31,126 | ) | |
$ | (4,311,281 | ) |
Common shares issued for services from
outside parties | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 340,700,000 | | |
| 657,300 | | |
| - | | |
| - | | |
| 657,300 | | |
| - | | |
| 657,300 | |
Common shares issued for employees compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 505,000,000 | | |
| 1,010,000 | | |
| - | | |
| - | | |
| 1,010,000 | | |
| - | | |
| 1,010,000 | |
Common shares issued upon conversion of
notes payable and accrued interest | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 706,295,378 | | |
| 1,067,351 | | |
| - | | |
| - | | |
| 1,067,351 | | |
| - | | |
| 1,067,351 | |
Common shares issued for settlement of
accounts payable | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 170,549,125 | | |
| 171,022 | | |
| - | | |
| - | | |
| 171,022 | | |
| - | | |
| 171,022 | |
Common shares issued for converting class
B preferred shares | |
| - | | |
| - | | |
| - | | |
| (11,715 | ) | |
| (29,288 | ) | |
| - | | |
| 29,287,500 | | |
| 29,288 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Debt discount | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 376,238 | | |
| - | | |
| - | | |
| 376,238 | | |
| - | | |
| 376,238 | |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 47,212 | | |
| - | | |
| 47,212 | | |
| - | | |
| 47,212 | |
Net loss for the
year ended December 31, 2011 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (4,532,677 | ) | |
| (4,532,677 | ) | |
| (3,277 | ) | |
| (4,535,954 | ) |
Balance, December 31, 2011 | |
| 2 | | |
| - | | |
| 134,790 | | |
| 193,289 | | |
| 483,222 | | |
| 171,448 | | |
| 1,878,278,845 | | |
| 2,209,651 | | |
| 159,389 | | |
| (8,642,209 | ) | |
| (5,483,709 | ) | |
| (34,403 | ) | |
| (5,518,112 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares issued for services | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,037,000,000 | | |
| 259,750 | | |
| - | | |
| - | | |
| 259,750 | | |
| - | | |
| 259,750 | |
Common shares issued for employees compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 13,445,378,151 | | |
| 1,344,536 | | |
| - | | |
| - | | |
| 1,344,536 | | |
| - | | |
| 1,344,536 | |
Common shares issued upon conversion of
notes payable and accrued interest | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 24,568,465,309 | | |
| 2,560,627 | | |
| - | | |
| - | | |
| 2,560,627 | | |
| - | | |
| 2,560,627 | |
Common shares issued for accrued wages | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 30,000,000,000 | | |
| 100,000 | | |
| - | | |
| - | | |
| 100,000 | | |
| - | | |
| 100,000 | |
Common shares exchanged for issuing Class
B preferred shares | |
| - | | |
| - | | |
| - | | |
| 2,500,000 | | |
| 6,250,000 | | |
| 19,195,377 | | |
| (25,445,378,151 | ) | |
| (25,445,377 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Preferred shares issued for services | |
| 5 | | |
| - | | |
| 336,970 | | |
| 1,009 | | |
| 2,523 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 339,493 | | |
| - | | |
| 339,493 | |
Debt discount | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 146,949 | | |
| - | | |
| - | | |
| 146,949 | | |
| - | | |
| 146,949 | |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (16,092 | ) | |
| - | | |
| (16,092 | ) | |
| - | | |
| (16,092 | ) |
Net loss for the
year ended December 31, 2012 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (5,780,798 | ) | |
| (5,780,798 | ) | |
| - | | |
| (5,780,798 | ) |
Balance, December
31, 2012 | |
| 7 | | |
$ | - | | |
$ | 471,760 | | |
| 2,694,298 | | |
$ | 6,735,745 | | |
$ | 19,366,825 | | |
| 45,483,744,154 | | |
$ | (18,823,864 | ) | |
$ | 143,297 | | |
$ | (14,423,007 | ) | |
$ | (6,529,244 | ) | |
$ | (34,403 | ) | |
$ | (6,563,647 | ) |
The
accompanying notes are an integral part of these consolidated financial statements.
Garb
Oil & Power Corporation and Subsidiaries
Consolidated
Statements of Cash Flows
| |
Year Ended December 31, | |
| |
2012 | | |
2011 | |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (5,780,798 | ) | |
$ | (4,532,677 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Net loss attributable to non-controlling interest | |
| - | | |
| (3,277 | ) |
Depreciation expense | |
| 2,701 | | |
| 973 | |
Debt issued for services | |
| 195,213 | | |
| 634,653 | |
Common stock issued for services | |
| 259,750 | | |
| 657,300 | |
Common stock issued for employees compensation | |
| 1,344,536 | | |
| 1,010,000 | |
Loss on extinguishment of debt | |
| 2,186,430 | | |
| 582,605 | |
Amortization of debt discount | |
| 223,208 | | |
| 291,470 | |
Preferred stock issued for services | |
| 339,493 | | |
| - | |
Bad debt expense | |
| 102,516 | | |
| 145,750 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (102,516 | ) | |
| (145,750 | ) |
Bank overdraft | |
| - | | |
| (91,585 | ) |
Prepaid expenses and other current assets | |
| - | | |
| 133,506 | |
Accounts payable and accrued expenses | |
| 96,009 | | |
| 115,924 | |
Accrued interest | |
| 313,591 | | |
| 362,988 | |
Related party payable | |
| - | | |
| (85,121 | ) |
Wages and payroll taxes payable | |
| 662,025 | | |
| 660,859 | |
Income taxes payable | |
| - | | |
| (5,634 | ) |
Net cash used in operating
activities | |
| (157,842 | ) | |
| (268,016 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Purchases of property, plant and equipment | |
| - | | |
| (3,997 | ) |
Net cash used in investing activities | |
| - | | |
| (3,997 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Proceeds from notes payable | |
| 144,000 | | |
| 242,300 | |
Net cash provided by financing
activities | |
| 144,000 | | |
| 242,300 | |
Net increase (decrease) in cash | |
| (13,842 | ) | |
| (29,713 | ) |
Effect of exchange rate changes on cash | |
| (3,699 | ) | |
| 47,255 | |
Cash at beginning of period | |
| 17,544 | | |
| 2 | |
Cash at end of period | |
$ | 3 | | |
$ | 17,544 | |
| |
| | | |
| | |
Supplemental disclosures of cash flow information: | |
| | | |
| | |
| |
| | | |
| | |
Cash paid for: | |
| | | |
| | |
Interest | |
$ | 420,126 | | |
$ | 389,930 | |
Income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Non-cash financing activities: | |
| | | |
| | |
Common shares issued for debt and accrued interest | |
$ | 332,484 | | |
$ | 580,051 | |
Debt discount | |
$ | 146,949 | | |
$ | 376,238 | |
Common shares issued for settlement of accounts payable | |
$ | - | | |
$ | 52,929 | |
Common shares issued for accrued compensation | |
$ | 100,000 | | |
$ | - | |
Common shares issued for converting Class B preferred shares | |
$ | - | | |
$ | 29,288 | |
Common shares exchanged for Class B preferred shares | |
$ | 25,445,377 | | |
$ | - | |
The
accompanying notes are an integral part of these consolidated financial statements.
Garb Oil & Power
Corporation and Subsidiaries
Notes to Consolidated Financial
Statements
December 31, 2012 and 2011
Forward
The Notes to Consolidated Financial Statements
contain disclosures relating primarily to the fiscal periods stated above for the Consolidated Financial Statements. In addition,
Notes containing select subsequent event disclosures have the words “To Date” added to their title and Note 11 –
Subsequent Events makes this reference. Subsequent Notes to Consolidated 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 and Summary
of Significant Accounting Principles
a. Organization 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.
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.
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.
COMPANY SUBSIDIARIES TO DATE
Resource Protection Systems GmBH
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. As consideration,
the Company paid the shareholders of RPS an aggregate of 27,829,291 shares of the Company’s common stock and options to
purchase 100,000,000 shares of the Company’s common stock with an expiration date of November 1, 2014, and an exercise
price equal to one-tenth of the closing ask price for 10 trading days prior to the exercise of the option. The options were contingent
upon the Company increasing its authorized shares, which it did in March 2010. The RPS specified assets were not transferred to
the Company and therefore the purchase was not fully consummated. All of the options expired on November 1, 2014 without being
exercised.
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 financial statements from
the year ended December 31, 2009 through the quarter ended June 30, 2013 each contains its audited or reviewed consolidated financial
statements for the Company and its subsidiaries which includes RPS consolidated financials that were converted into United States
Dollars (USD). The Company has included RPS and Newview as Company subsidiaries, accounted for as entities under common control,
since RPS, Newview, and the Company had common management during this period of time. As the transaction combines two commonly
controlled entities that historically prior to October 27, 2009 have not been presented together, the resulting financial statements
are, 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, is now shown as combined. Since
the former management left the Company during the quarter ended September 30, 2013 (on August 21, 2013) the Company’s financial
statements beginning with the quarter ended September 30, 2013 omits the RPS and Newview financial statements.
Garb Global Services, Inc.
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 customers 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 LOI and CE Agreement both dated January 24, 2014. Garb Global will continue as an operating subsidiary
of the Company.
b. Use of Estimates
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c. Basis of Presentation - 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, during the years ended December 31, 2012
and 2011, the Company has incurred a net loss of $5,780,798 and $4,532,677, respectively, and as of December 31, 2012, the Company’s
accumulated deficit was $14,423,007. 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.
d. Principles of Consolidation To Date
The consolidated financial statements include
the accounts of Garb and its subsidiaries, RPS (entity under common control from October 27, 2009 through August 21, 2013), Newview
(80% owned by RPS) and Garb Global (100% owned since February 12, 2014). All significant intercompany accounts and transactions
have been eliminated in consolidation.
e. Property and Equipment
Property and equipment is recorded at cost
and is depreciated using the straight-line method based on the expected lives of the assets which range from five to thirty nine
years. Leases determined to be capital leases are classified as being owned by the Company and recorded accordingly. Depreciation
expense for the years ended December 31, 2012 and 2011 was $2,701 and $973, respectively.
The Company records impairment losses when
indicators of impairment are present and undiscounted cash flows estimated to be generated by those assets are less than the assets’
carrying amount.
f. Revenue Recognition To Date
Revenue is recognized when the following criteria
are met: 1. persuasive evidence of an arrangement exists, which is generally in the form of a signed contract which specifies
a fixed price, 2. the sales amount is determinable, 3. when title is transferred, which is when goods shipped to the customer
has been received and accepted or services have been rendered, and 4. collection is reasonably assured. In the past the Company
has engaged in product sales and consulting activities, but during the financial reporting period covered by these notes to financials
did not have product or consulting revenues.
g. Accounts Receivable/Allowance for Bad Debt
The Company’s allowance for uncollectible
accounts receivable is based on its historical bad debt experience and on current management’s evaluation of its ability
to collect individual outstanding balances. The Company had $248,265 and $145,750 allowance for doubtful accounts as of December
31, 2012 and 2011 respectively. (Also see Note 4 – Related Party Transactions.)
h. Advertising Costs
The Company expenses all advertising costs
as incurred. The Company recorded $745 and $4,921 advertising expense for the years ended December 31, 2012 and 2011 respectively.
i. Basic Income (Loss) Per Share
The following is an illustration of the reconciliation
of the numerators and denominators of the basic loss per share calculation:
| |
For the Years Ended December 31, | |
| |
2012 | | |
2011 | |
Comprehensive loss (numerator) | |
$ | (5,780,798 | ) | |
$ | (4,532,677 | ) |
Weighted average shares outstanding (denominator) | |
| 22,817,565,053 | | |
| 796,906,387 | |
Basic loss per share | |
$ | (0.00 | ) | |
$ | (0.01 | ) |
For the year ended December 31, 2012 and 2011,
the Company had no common stock equivalents that are excluded from the computation of diluted earnings per share as their effect
is anti-dilutive due to net losses.
j. Financial Instruments
Cash equivalents include highly liquid short-term
investments with original maturities of three months or less, readily convertible to known amounts of cash. The amounts reported
as cash, prepaid expenses, trade accounts payable and notes payable to related parties are considered to be reasonable approximations
of their fair values. The fair value estimates presented herein were based on available market information for the year ended
December 31, 2012. The use of different market assumptions and/or estimation methodologies could have a material effect on the
estimated fair value amounts. The reported fair values do not take into consideration potential expenses that would be incurred
in an actual settlement.
k. Stock-Based Compensation
The Company records expense associated with
the fair value of stock-based compensation. For fully vested stock and restricted stock grants the Company calculates the stock
based compensation expense based upon estimated fair value on the date of grant. For stock options, the Company uses the Black-Scholes
option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of
highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the
fair value estimate.
l. Concentration of Credit and Other Risks
The Company maintains cash in federally insured
bank accounts. At times these amounts exceed insured limits. The Company does not anticipate any losses from these deposits.
The Company had no customers whose sales were
greater than 10% for the years ended December 31, 2012 and December 31, 2011, respectively.
The Company’s December 31, 2012 and
2011 accounts receivable was due entirely from two other entities during both years. (Also see Note 4 – Related Party Transactions.)
As the Company had no revenues for the year
ended December 31, 2012, there is no concentration of credit risk.
m. Income Taxes
Deferred income taxes are provided using the
liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit
carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of
enactment.
When tax returns are filed, it is highly certain
that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty
about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax
position is recognized in the financial statements in the period during which, based on all available evidence, management believes
it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized
upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds
the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet
along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
Interest and penalties associated with unrecognized
tax benefits are classified as additional income taxes in the statement of income.
n. Foreign Currency
The financial statements of the Company’s
reported foreign subsidiaries are measured using the local currency, the euro, as the functional currency. All assets and
liabilities are translated into U.S. Dollars at year-end rates of exchange and results of operations are translated at average
rates for the year. Equity transactions are translated at historical rates at the time of the transactions. Gains and losses resulting
from these translations are included in accumulated other comprehensive income (loss) as a separate component of stockholders’
equity.
o. Recent Accounting Standards
The Company does not expect the adoption of
any recently issued accounting pronouncement to have a significant impact on its financial position, results of operations or
cash flows.
Note 2 – Acquisitions To Date
Newview, S.L.
On January 15, 2010, RPS purchased, through
a business combination, 80% of the issued and outstanding stock of Newview S.L. The Company purchased Newview since it held certain
proprietary information and other technology relating to the Company’s e-waste recycling and processing business. At the
time of the purchase, Igor Plahuta was a Company Director and 100% owner of Newview. The Company has been unable to determine
whether Newview is currently active.
The total maximum consideration that was to
be paid to Mr. Plahuta for the Newview Acquisition was €600,000 ($870,000), including cancellation of indebtedness owed by
Mr. Plahuta to RPS of €300,000 ($435,000), cash up to €150,000 ($217,000) from the sale of a 47% participation in Sistema
Proteccion Recursos, a company organized under the laws of Spain when RPS consummates such sale and receives payment, and cash
up to €150,000 ($217,000) from profits of RPS based on a percent of gross sales of RPS during a certain period. Other than
the cancellation of indebtedness, none of the consideration for the purchase was paid. RPS had $0 gross sales (revenues) from
October 27, 2009 until August 21, 2013 – the time period during which the Company and RPS had common management.
The transaction is accounted for as entities
under common control. As the transaction combines two commonly controlled entities that historically have not been presented together,
the resulting financial statements are, in effect, considered those of a different reporting entity. This resulted in a change
in the reporting entity, which requires retrospectively combining the entities for all periods presented as if the combination
had been in effect since inception of common control.
Garb Global Services, Inc.
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 customers 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 LOI and CE Agreement both dated January 24, 2014. Garb Global will continue as an operating subsidiary of the Company.
Note 3 – Property And Equipment
The major classes of equipment as of December
31, 2012 and 2011 are as follows:
| |
| | |
| | |
Estimated |
| |
| | |
| | |
Service Lives |
| |
December 31, 2012 | | |
December 31, 2011 | | |
in Years |
Office equipment & furniture | |
$ | 34,452 | | |
$ | 34,452 | | |
3-7 |
| |
| | | |
| | | |
|
Total property and equipment | |
| 34,452 | | |
| 34,452 | | |
|
| |
| | | |
| | | |
|
Less accumulated depreciation | |
| (30,566 | ) | |
| (27,865 | ) | |
|
| |
| | | |
| | | |
|
Property and equipment, net | |
$ | 3,886 | | |
$ | 6,587 | | |
|
Note 4 – Related Party Transactions
During the years ended December 31, 2012 and
2011, the Company accrued $660,000 and $660,000 in salaries to managers and directors of the Company. During the year ended December
31, 2012 and 2011, related party payable increased $9,437 (due to the change in the exchange rate) and decreased $85,121, respectively.
Related Party Company Stock Issuances during
the Year Ended December 31, 2012
In January 2012, the Company approved the
issuance of 1 share of Class A Preferred Stock to John Rossi for services of $67,384.
In January 2012, the Company approved the
issuance of 1 share of Class A Preferred Stock to Igor Plahuta for services of $67,384.
In January 2012, the Company approved the
issuance of 1 share of Class A Preferred Stock to Alan Fleming for services of $67,384.
In June 2012, the Company approved the issuance
of 12,000,000,000 shares of Common Stock to John Rossi for accrued salary of $40,000.
In June 2012, the Company approved the issuance
of 12,000,000,000 shares of Common Stock to Igor Plahuta for accrued salary of $40,000.
In June 2012, the Company approved the issuance
of 6,000,000 shares of Common Stock to Alan Fleming for accrued salary of $20,000.
In August 2012, the Company approved the issuance
of 13,445,378,151 shares of Common Stock to John Rossi for compensation of $1,344,536.
In August 2012, the Company approved the issuance
of 2 shares of Class A Preferred Stock to John Rossi for services of $134,788.
In September 10, 2012, John Rossi converted
the 25,445,378,151 shares of Common Stock received during June and August 2012 to 2,500,000 shares of Class B Preferred Stock
using a stated conversion rate of $10.18.
Related Party Company Stock Issuances during
the Year Ended December 31, 2011
In February 2011, Alan Fleming converted the
11,715 shares of Class B Preferred Stock received in May 2010 to 29,287,500 shares of common stock using a stated conversion rate
of $.001.
In April 2011, the Company approved the issuance
of 2,000,000 shares of Common Stock to Igor Plahuta for services of $6,000.
In July 2011, the Company approved the issuance
of 55,000,000 shares of Common Stock to Alan Fleming for services of $110,000.
In July 2011, the Company approved the issuance
of 50,000,000 shares of Common Stock to Carolina Kjellman for services of $100,000.
In July 2011, the Company approved the issuance
of 200,000,000 shares of Common Stock to Igor Plahuta for services of $400,000.
In July 2011, the Company approved the issuance
of 200,000,000 shares of Common Stock to John Rossi for services of $400,000.
Related party payable consisted of the following
at December 31, 2012 and 2011:
| |
December 31, 2012 | | |
December 31, 2011 | |
Accounts payable to a related parties, due on demand, no interest, unsecured | |
$ | 59,993 | | |
$ | 50,556 | |
| |
| | | |
| | |
Accounts payable to a related party, due on demand, plus interest at 10% per annum, unsecured | |
| 230,526 | | |
| 230,526 | |
| |
| | | |
| | |
Total | |
$ | 290,519 | | |
$ | 281,082 | |
As of December 31, 2012 and 2011, accounts
receivable related to cash received by management without supportive cash receipts was $248,265 and $145,750 respectively. As
of December 31, 2012 and 2011, allowances for bad debt was $248,265 and $145,750 respectively, resulting in net accounts receivable
from related party balances as of December 31, 2012 and 2011 as $0 and $0 respectively.
Note 5 – Income Taxes
The Company accounts for income taxes in accordance
with Accounting Standards Codification Topic 740, Income Taxes (“Topic 740”), which requires the recognition of deferred
tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included
in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount
that is more likely than not to be realized. Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized
in a company’s financial statements. Topic 740 requires a company to determine whether it is more likely than not that a
tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold
is met, a company must measure the tax position to determine the amount to recognize in the financial statements. At the adoption
date of January 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized.
The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the
provision for income taxes. As of December 31, 2012, the Company had no accrued interest or penalties related to uncertain tax
positions.
The Company files income tax returns in the
U.S. federal jurisdiction and in the state of Utah. Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment. Net deferred tax liabilities consist of
the following components as of December 31, 2012 and 2011.
| |
December 31, 2012 | | |
December 31, 2011 | |
Deferred tax assets: | |
| | | |
| | |
NOL carryover | |
$ | 2,710,600 | | |
$ | 2,348,400 | |
Allowance for doubtful accounts | |
| 96,800 | | |
| 56,800 | |
Accrued wages | |
| 776,300 | | |
| 557,900 | |
Deferred tax liabilities: | |
| | | |
| | |
Depreciation | |
| - | | |
| - | |
Foreign amounts owed | |
| 16,243 | | |
| 15,916 | |
Valuation allowance | |
| (3,583,700 | ) | |
| (2,963,100 | ) |
Net deferred tax liability | |
$ | 16,243 | | |
$ | 15,916 | |
The income tax provision differs from the
amount of income tax determined by applying the U.S. federal and state income tax rates to pretax income from continuing operations
for the years ended December 31, 2012 and 2011 due to the following:
| |
December 31, 2012 | | |
December 31, 2011 | |
Book income (loss) | |
$ | (2,247,200 | ) | |
$ | (1,761,800 | ) |
Allowance for doubtful accounts | |
| 40,000 | | |
| 56,800 | |
Accrued wages | |
| 218,400 | | |
| 257,400 | |
Non-deductible meals and entertainment | |
| 900 | | |
| 600 | |
Other non-deductible expenses | |
| 1,625,700 | | |
| 890,400 | |
Valuation allowance | |
| 362,200 | | |
| 556,600 | |
Income tax provision | |
$ | - | | |
$ | - | |
Foreign taxes payable relate to liabilities
associated with income tax obligations of RPS in Germany for taxable income generated in years prior to 2009.
At December 31, 2012, the Company had net
operating loss carry forwards of approximately $6,950,000 that may be offset against future taxable income from the year 2013
through 2032. No tax benefit has been reported in the December 31, 2012 financial statements since the potential tax benefit is
offset by a valuation allowance of the same amount.
Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual
limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
Note 6 – Commitments To Date
The Company had employment agreements with
its former officers. The Company’s prior Chief Executive Officer, John Rossi’s agreement was for seven years through
November 30, 2016 and included a base salary of $240,000 per year. The Company’s prior Chief Technical Officer, Igor Plahuta’s
agreement was for seven years through November 30, 2016 and included a base salary of $240,000 per year. The Company’s prior
Chief Operations Officer, Alan Fleming’s agreement was for five years and expired on April 14, 2015 and included a base
salary of $180,000 year. The former officers’ employment agreements terminated during August 2013.
As of December 31, 2012 and 2011 the Company
had accrued a total of $2,004,498 and $1,442,332 in wages and payroll taxes payable related to officer compensation.
The Company has employment agreements with
its current officers installed during August 2013. The Company’s current Chief Executive Officer, Tammy Taylor’s agreement
includes a starting salary of $120,000 per year. The Company’s current Corporate Secretary, M. Aimee Coleman’s agreement
is for starting part time at $250 per week, with hours over 10 hours a week at the hourly rate of $25 per hour. Both current officers
agreed to allow unpaid salaries to accrue and be paid as operations’ cash flows improve. The terms of employment for the
length of employment service of both agreements are open ended, at will for both parties, except for agreement violations’
remedies as specified.
Note 7 – Operating Leases
To Date
Since September 1, 2014, the Company is in
a lease to own lease agreement for an office and warehouse’s 16,838 square foot portion of the property’s total 55,785
square foot space. The lease is considered a capital lease. Lease payments are $7,000 per month with $5,000 per month being applied
to the $1,385,000 purchase price. The property purchase is to close during second quarter 2015.
Note 8 – Notes Payable
Both secured and unsecured notes payable balance
net of discounts for the years ended December 31, 2012 and 2011 were $1,892,737, net of debt discounts of $23,645 and $1,654,545,
net of debt discounts of $99,904, respectively.
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 December
31, 2012 and December 31, 2011 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 December 31, 2012 and December
31, 2011 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 December 31, 2012 and December
31, 2011 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 December 31, 2012 and December
31, 2011 was $20,000, net of debt discounts of $0.
January 6, 2006 Note
A $50,000 promissory note secured by all of
the Company’s assets including future sales of cement and urea by a related company was entered into on January 6, 2006,
was due January 6, 2007, incurred a one time loan fee of one million shares, plus interest of 5% and was in default. During the
year ended December 31, 2011 the original debt holder assigned the full January 6, 2006 Note. The balance of the January 6, 2006
Note owed to the original debt holder as of December 31, 2012 was $0 and as of December 31, 2011 was $0, both net of debt discounts
of $0.
During the year ended December 31, 2011, the
Company issued a total of 36,440,000 shares of common stock at an average conversion price of $.0038, or $138,176 as repayment
for all of the Assigned January 6, 2006 Note. The Assigned January 6, 2006 Note balances total $0 as of December 31, 2012 and
total $0 as of December 31, 2011, both net of debt discounts of $0.
January 26, 2006 Note
A $5,000 unsecured promissory note was entered
into on January 26, 2006, was due July 26, 2006, plus interest of 5% and was in default. During the year ended December 31, 2011
the original debt holder assigned the full January 26, 2006 Note. The balance of the January 26, 2006 Note owed to the original
debt holder as of December 31, 2012 was $0 and as of December 31, 2011 was $0, both net of debt discounts of $0.
During the year ended December 31, 2011, the
Company issued a total of 2,000,000 shares of common stock at an average conversion price of $.0025, or $5,000 as repayment for
all of the Assigned January 26, 2006 Note. The Assigned January 26, 2006 Note balances total $0 as of December 31, 2012 and total
$0 as of December 31, 2011, both 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 December 31, 2012 and December 31, 2011 was $53,000, 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
December 31, 2012 and December 31, 2011 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
December 31, 2012 and December 31, 2011 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 year ended December 31, 2012 the original debt holder assigned $49,000 worth of note’s
principal and accrued interest. During the year ended December 31, 2011 the original debt holder assigned $80,000 worth of the
note’s principal. The balance of the October 11, 2007 Note owed to the original debt holder as of December 31, 2012 was
$327 and as of December 31, 2011 was $49,327, both 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. During the year ended December 31, 2011, the
Company issued a total of 99,523,810 shares of common stock at an average conversion price of $.0008, or $80,000, as repayment
for all of the year ended December 31, 2011 Assigned October 11, 2007 Note. The Assigned October 11, 2007 Notes balances total
$13,250 as of December 31, 2012 and $0 as of December 31, 2011, both net of debt discounts of $0.
April 28, 2008 Note
A $2,200 unsecured promissory note was entered
into on April 28, 2008, was due on demand and plus interest of 5%. During the year ended December 31, 2011 the original debt holder
assigned the full April 28, 2008 Note. The balance of the April 28, 2008 Note owed to the original debt holder as of December
31, 2012 was $0 and as of December 31, 2011 was $0, both net of debt discounts of $0.
During the year ended December 31, 2011, the
Company issued a total of 880,000 shares of common stock at an average conversion price of $.0025, or $2,200 as repayment for
all of the Assigned April 28, 2008 Note. The Assigned April 28, 2008 Note balances total $0 as of December 31, 2012 and $0 as
of December 31, 2011, both 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 December 31, 2012 and December
31, 2011 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 December 31, 2012 and December
31, 2011 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 December 31, 2012 and December
31, 2011 was $3,000, net of debt discounts of $0.
March 11, 2010 Note
On March 11, 2010 the Company borrowed $50,000
from Asher pursuant to a convertible promissory note. The note bears interest at 8% per annum, has a maturity date of December
5, 2010 and has a 22% default interest rate should the note go into default. Asher has the right to immediately convert the note
before the maturity date, into shares of the Company’s common stock at a discount of 42% of the average of the lowest 3
days’ trading prices of Common Stock of the 10 days prior to the conversion date. Since the note is immediately convertible
into a variable number of shares based on a fixed monetary value we 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, $36,207, was recognized as interest expense on the date of issuance. On December 5, 2010 the Company defaulted
on the note and per the note payable contract recorded a default amount due of $26,479 and the note interest per annum increased
to 22%.
During the year ended December 31, 2010, the
Company issued a total of 1,562,500 shares of common stock at an average conversion price of $.0032, or $5,000.
During the year ended December 31, 2011, the
Company issued a total of 27,459,418 shares of common stock at an average conversion price of $.0039, or $108,149, as final repayment
of the convertible promissory note at its full fair value. The balance of the convertible promissory note as of December 31, 2012
and as of December 31, 2011 was $0.
May 5, 2010 Note
On May 5, 2010 the Company borrowed $40,000
from Asher pursuant to a convertible promissory note. The note bears interest at 8% per annum and has a maturity date of February
7, 2011. Asher has the right to immediately convert the note before the maturity date, into shares of the Company’s common
stock at a discount of 42% of the average of the lowest 3 days’ trading prices of Common Stock of the 10 days prior to the
conversion date. Since the note is immediately convertible into a variable number of shares based on a fixed monetary value we
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, $28,966, was recognized as interest expense on
the date of issuance.
During the year ended December 31, 2011, the
Company issued a total of 40,464,215 shares of common stock at an average conversion price of $.0018, or $72,166, as final repayment
of the convertible promissory note at its full fair value. The balance of the convertible promissory note as of December 31, 2012
and as of December 31, 2011 was $0.
May 27, 2010 Note
On May 27, 2010 the Company borrowed $45,000
from Asher pursuant to a convertible promissory note. The note bears interest at 8% per annum and has a maturity date of March
1, 2011. Asher has the right to immediately convert the note before the maturity date, into shares of the Company’s common
stock at a discount of 42% of the average of the lowest 3 days’ trading prices of Common Stock of the 10 days prior to the
conversion date. Since the note is immediately convertible into a variable number of shares based on a fixed monetary value we
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, $32,585, was recognized as interest expense on
the date of issuance.
During the year ended December 31, 2011, the
Company issued a total of 40,660,440 shares of common stock at an average conversion price of $.0020, or $80,786, as final repayment
of the convertible promissory note at its full fair value. The balance of the convertible promissory note as of December 31, 2012
and as of December 31, 2011 was $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 December 31, 2012 and December 31, 2011 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 Company did not pay cash or issue shares of common stock during the years ended
December 31, 2012 and December 31, 2011 to the professional services provider on the June 29, 2010 Note. The balance of the June
29, 2010 Note owed to the professional services provider as of December 31, 2012 and as of December 31, 2011 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. During the year ended December 31, 2011, the Company
issued a total of 461,747,495 shares of common stock at an average conversion price of $.0013, or $588,075, as repayment for several
of the year ended December 31, 2011 Assigned June 29, 2010 Note. $31,500 of the June 29, 2010 note was consolidated into the June
16, 2012 note. The Assigned June 29, 2010 Notes balances total $57,000 as of December 31, 2012 and $127,500 as of December 31,
2011, both 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 years ended December 31, 2012 and December 31, 2011 to the professional services provider on
the September 29, 2010 Note. The balance of the September 29, 2010 Note as of December 31, 2012 was $0 and as of December 31,
2011 was $165,074, 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 December 31, 2012 and as of December 31, 2011, 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 years ended December 31, 2012 and December 31, 2011 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 December 31, 2012
and as of December 31, 2011 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 total as of December 31, 2012 was $0 and as of December 31, 2011 was $25,000, 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 years ended December 31, 2012 and December 31, 2011 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 December 31, 2012 and
as of December 31, 2011 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 December 31, 2012 was $0 and as of December 31, 2011 was $25,000, 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. The balance of the convertible promissory note
as of December 31, 2011 at its full fair value was $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 an 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 year ended December 31, 2012 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
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 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 December 31, 2012 and December 31, 2011 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 December 31, 2012 was $0 and as of December 31, 2011 was $615, 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 December 31, 2012 was $0 and as of December 31, 2011 was $500, 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 December 31,
2012 was $0 and as of December 31, 2011 was $40,000, 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%. The balance of the March 29, 2011 Note as of December 31, 2012 and as of December 31, 2011 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. The balance of the March 31, 2011 Note as of December 31, 2012 and as of December 31,
2011 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 December 31, 2012 was $0 and as of December 31, 2011 was $1,336, 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 December 31, 2012 was $0 and as of December 31, 2011 was $50,000, 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. The balance of the April 20, 2011 Note as of December 31, 2012 and as of December 31, 2011 was $4,000, 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 December 31, 2012 was $0 and as of December 31, 2011 was $100,000, 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 December 31, 2012 was $0, net of debt discounts of $0 and as of December 31, 2011 was $10,383, net of
debt discounts of $9,617.
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. The balance of the June 30, 2011 Note as of December 31, 2012 and as
of December 31, 2011 was $75,000, 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 December
31, 2012 was $0, net of debt discounts of $0 and as of December 31, 2011 was $10,363, net of debt discounts of $137.
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 December 31, 2012 was $0, net of debt discounts of $0 and as of December 31, 2011 was $29,912, net of
debt discounts of $88.
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%. The balance of the July 26, 2011 Note as of December 31, 2012 was $12,300, net of debt discounts of
$0 and as of December 31, 2011 was $11,364, net of debt discounts of $936.
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 December 31, 2012 was $30,000, net of debt discounts of $0 and as of December 31, 2011 was $10,410, net of
debt discounts of $19,590.
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 December 31, 2012 was $30,000, net of debt discounts of $0 and as of December 31, 2011 was $8,443, net of
debt discounts of $21,557.
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 December 31, 2012 was $20,000, net of debt discounts of $0 and as of December 31, 2011 was
$10,310, net of debt discounts of $9,690.
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. The balance
of the September 30 Note as of December 31, 2012 and as of December 31, 2011 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. On April 2, 2012 the Company defaulted on the note. The balance of
the October 1, 2011 Note as of December 31, 2012 and as of December 31, 2011 was $40,700, both 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 December 31, 2012 was $0, net of debt discounts of $0 and
as of December 31, 2011 was $17,791, net of debt discounts of $7,209.
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. The balance of the
October 31, 2011 Note as of December 31, 2012 and as of December 31, 2011 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. On November 3, 2012 the Company defaulted on the note. The balance
of the November 2, 2011 Note as of December 31, 2012 was $33,000, net of debt discounts of $0 and as of December 31, 2011 was
$5,319, net of debt discounts of $27,681.
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 December 31, 2012 was $0, net of debt discounts of $0 and as of December 31, 2011 was $3,602, net of debt discounts of $3,399.
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. The balance
of the December 30, 2011 Note 1 as of December 31, 2012 and as of December 31, 2011 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. The balance of the
December 30, 2011 Note 2 as of December 31, 2012 and as of December 31, 2011 was $25,000, both net of debt discounts of $0.
December 30, 2011 Note 3
On December 30, 2011 the Company issued an
unsecured promissory note in the principal amount of $22,000 in exchange for $22,000 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. The balance of the
December 30, 2011 Note 3 as of December 31, 2012 and as of December 31, 2011 was $22,000, 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 December 31, 2012 was $0, 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. The balance
of the January 24, 2012 Note 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 as of December 31, 2012 was $0, 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 as of 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. The balance of the February 28, 2012 Note as of December 31, 2012
was $20,000, 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. The balance
of the March 7, 2012 Note as of 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 as of 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 as of 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 as of December 31, 2012 was $700,000, 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
Notes consolidated into the June 16,
2012 Note (Continued)
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 as of December 31, 2012 was $7,479, net of debt discounts
of $7,521.
Note 9 – Capital Stock
On May 20, 2013 and on June 12, 2014 the Company
filed amendments with the Utah Secretary of State amending Article IV of the Corporation Articles of Incorporation such that the
Authorized capital stock of the Company is as stated below.
Authorized capital stock consists of:
● |
|
50,000,000,000 common shares with no par
value; and |
|
|
|
● |
|
1,000,000 preferred Class A shares with
a par value of $0.0001 per share; and |
|
|
|
● |
|
10,000,000 preferred Class B shares with
a par value of $2.50 per share; and |
Changes in par values have been retroactively
reported back to the year ended December 31, 2010 (this filing) based on Audits performed through the year ended December 31,
2013.
A summary of the pertinent rights and privileges
of the classes of preferred stock are as follows:
Class A Preferred Stock
Conversion Rights - Each outstanding
share of Class A Preferred Stock shall be convertible, at the option of the holder into shares of Common Stock equal to (i) four
times the total number of shares of Common Stock which are issued and outstanding at the time of such conversion plus (ii)
the total number of shares of Class B Preferred Stock which are issued and outstanding at the time of such conversion minus
(iii) the number of other shares of Class A Preferred Stock issued and outstanding immediately prior to the time of such conversions.
Voting Rights - The total aggregate
issued shares of Class A Preferred Stock shall have aggregate right to a number of votes equal to (i) four times the total number
of shares of Common Stock which are issued and outstanding at the time of voting, plus (ii) the total number of shares
of Class B Stock which are issued and outstanding at the time of voting minus (iii) the number of shares of Class A Preferred
Stock issued and outstanding at the time of voting.
Class B Preferred Stock
On May 20, 2013 and on June 12, 2014 the Company
filed amendments with the Utah Secretary of State amending Article IV of the Corporation Articles of Incorporation such that the
Authorized capital stock of the Company is as stated below for Class B Preferred Stock. The change in Class B Preferred Stock’s
par value to $2.50 has been retroactively reported back to the year ended December 31, 2010 (this filing) based on Audits performed
through the year ended December 31, 2013.
Dividends - Class B shareholders shall
be entitled to receive dividends, when, as and if declared by the Board of Directors.
Conversion Rights - Each share of Class
B Preferred Stock shall be convertible into the number of shares of Common Stock equal to the Class B Preferred Stock, $2.50 par
value, to the proportional calculation of converting to common stock based on the total par value of the Class B Preferred Stock
being converted, divided by the average closing price per share of the Company’s common stock over the preceding 10 trading
days.
Voting Rights - Each share of Class
B Preferred Stock shall have ten votes.
Common Stock
Common Shares Issued for Services
During the year ended December 31, 2012, the
Company issued a total of 1,037,000,000 shares of common stock at an average per share purchase price of $0.00025, or $259,750.
The Company issued these shares as payment for various outside services received including legal, investor relations, consulting
and marketing related services and recorded the value in general and administrative expenses during the year ended December 31,
2012.
During the year ended December 31, 2011, the
Company issued a total of 340,700,000 shares of common stock at an average per share purchase price of $0.002, or $657,300. The
Company issued these shares as payment for various outside services received including legal, investor relations, consulting and
marketing related services and recorded the value in general and administrative expenses during the year ended December 31, 2011.
Common Shares Issued for Employees Compensation
During the year ended December 31, 2012, the
Company issued a total of 13,445,378,151 shares of common stock to employees as bonuses at an average price of $0.0001 or $1,344,536
in the aggregate and was valued at the market price on the respective dates of issuance.
During the year ended December 31, 2011, the
Company issued a total of 505,000,000 shares of common stock to employees as bonuses at an average price of $0.002 or $1,010,000
in the aggregate and was valued at the market price on the respective dates of issuance.
Common Shares Issued for Debt and Accrued
Interest
During the year ended December 31, 2012, the
Company issued a total of 24,568,465,309 shares of common stock at an average price of $0.0001 or $2,560,627 in the aggregate,
as discussed in Note 8.
During the year ended December 31, 2011, the
Company issued a total of 706,295,378 shares of common stock at an average price of $0.0015 or $1,067,351 in the aggregate, as
discussed in Note 8.
Common Shares Issued for Accrued Salary
During the year ended December 31, 2012, the
Company issued a total of 30,000,000,000 shares of common stock at an average price of $0.000003 or $100,000 in the aggregate
and was valued at the market price on the respective date of issuance.
During the year ended December 31, 2011, the
Company did not issue common stock as payment for accrued salary.
Common Shares Issued for Settlement
of Accounts Payable
During the year ended December 31, 2012, the
Company did not issue common stock as payment of outstanding trade accounts payable balances.
During the year ended December 31, 2011, the
Company issued a total of 170,549,125 shares of common stock at a price of $0.001 or $171,022 in the aggregate, for payment of
an outstanding trade accounts payable balance.
Common Stock converted to Class B Preferred
Stock
During the year ended December 31, 2012, 25,445,378,151
shares of Common Stock were converted to 2,500,000 shares of Class B Preferred Stock at the conversion rate of $10.18.
During the year ended December 31, 2011, there
were no conversions of Common Stock to Class B Preferred Stock.
Class A Preferred Stock
Class A Preferred Shares Issued for
Services
During the years ended December 31, 2012,
the Company issued 5 shares of the Company’s Class A Preferred stock at a price of $67,394 for $336,970 as consideration
for services rendered to the Company.
During the year ended December 31, 2011, the
Company did not issue shares of the Company’s Class A Preferred stock as consideration for services rendered to the Company.
Class B Preferred Stock
Class B Preferred Shares Issued for
Services
During the year ended December 31, 2012, the
Company issued a total of 1,009, shares of Class B Preferred stock at an average per share purchase price of $2.50, or $2,523.
The Company issued these shares as payment for various outside services received including consulting and marketing related services
and recorded the value in administrative expenses during the year ended December 31, 2012.
During the year ended December 31, 2011, the
Company did not issue shares of Class B Preferred stock for services.
Class B Preferred Stock converted to Common
Stock
During the year ended December 31, 2012, there
were no conversions of Class B Preferred Stock to Common Stock.
During the year ended December 31, 2011, 11,715
shares of Class B Preferred Stock were converted to 29,287,500 shares of Common Stock at the conversion rate of $0.001.
Note 10 – Stock Options/Stock-Based
Compensation and Warrants
On February 27, 2010 the Company entered in
to an agreement with Premier Media Services (PMS) in which the Company agreed to pay a monthly fee for three months of $7,500
per month, issue 500,000 shares of Common stock and 500,000 stock options to purchase shares of the Company’s common stock.
100,000 options have an exercise price of $ 0.15, 100,000 options have an exercise price of $0.25, 100,000 options have an exercise
price of $0.35, 100,000 options have an exercise price of $0.50 and 100,000 options have an exercise price of $1.00. These shares
vest immediately and are exercisable for 5 years.
As part of the 2009 RPS purchase agreement,
the Company granted common stock options to acquire 100,000,000 shares of common stock. The company recorded the granting of the
100,000,000 stock options as a $3,150,000 liability on the balance sheet as of December 31, 2009 labeled common stock options
payable, because the options did not become effective or exercisable until the authorized capital of the Company is increased
to not less than 220,000,000 shares of common stock. The Company’s authorized capital was increased during 2010 and the
liability was removed with a corresponding increase to additional paid in capital.
In applying the Black-Scholes methodology
to the option grants, the fair value of our stock-based awards granted were estimated using an expected annual dividend yield
of 0% , a risk-free interest rate of 2.51%, an expected option life of 5.0 years and an expected price volatility of 117%.
The average risk-free interest rate is determined
using the U.S. Treasury rate in effect as of the date of grant, based on the expected term of the stock option. The expected price
volatility was determined using a weighted average of daily historical volatility of our stock price over the corresponding expected
option life and implied volatility based on recent trends of the daily historical volatility. Compensation expense is recognized
immediately for options that are fully vested on the date of grant. During the year ended December 31, 2010 500,000 stock-based
compensation grants were made for a total fair value of $14,500. There were no options outstanding as of December 31, 2008 and
2009 and no option activity occurred after the year ended December 31, 2010 through the date this report is submitted.
Changes in stock options for the years ended
December 31, 2012 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 | | |
| 2.84 | | |
| | |
Granted | | |
| - | | |
$ | - | | |
| - | | |
| | |
Exercised | | |
| - | | |
$ | - | | |
| - | | |
| | |
Forfeited/expired | | |
| - | | |
$ | - | | |
| - | | |
| | |
Outstanding at December 31, 2012 | | |
| 100,500,000 | | |
$ | 0.01 | | |
| 1.84 | | |
| | |
Exercisable | | |
| 100,500,000 | | |
$ | 0.01 | | |
| 1.84 | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | |
Weighted average fair value of options granted during year ended
December 31, 2012 | | |
| | | |
$ | - | | |
| | | |
| | |
The following table summarizes information about stock options
outstanding at December 31, 2012:
| | |
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 | |
| 1.84 | | |
$ | 0.01 | | |
100,500,000 | |
$ | 0.01 | |
Note 11 – Subsequent Events
Current management has evaluated subsequent
events as of the date of the consolidated financial statements. Several material subsequent events have occurred. Below are the
subsequent events that have occurred since the year ended December 31, 2012 through the date of this annual filing.
Subsequent New Debt
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.
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 quarter ended June 30, 2014 the
Company borrowed $10,000 cash and incurred $2,000 in loan fees. During the quarter ended September 30, 2014 the Company borrowed
$5,000 cash and incurred $1,000 in loan fees. During the quarter 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 borrowed during the quarter ended June 30, 2012 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 Party
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 |
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 |
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 quarter
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 quarter ended
June 30, 2015.
Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Effective
August 2, 2011, the client-auditor relationship between the Company and Sherb & Co., LLC (the “Former Auditor”)
was terminated upon the dismissal of the Former Auditor as the Company’s independent registered accounting firm. The former
management’s decision to remove the Former Auditor was recommended and was approved by the Company’s former Board
of Directors, effective July 31, 2011. During the two years ended December 31, 2010, the Former Auditor did not submit a principal
accountant’s report on the financial statements of the Company.
During
the interim periods through the date the relationship with the Former Auditor concluded, there were no disagreements between the
Former Auditor and the Company on a matter of accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of the Former Auditor would have caused the Former
Auditor to make reference to the subject matter of the disagreement in connection with its report on the Company’s financial
statements. There have been no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K during any subsequent interim
periods through the date the relationship with the Former Auditor ceased.
The
Company engaged HJ & Associates, LLC (the “New Auditor”) to be the principal independent public accountant to
audit the Company’s financial statements for the year ended December 31, 2010. The decision to change accountants was recommended
and approved by the Company’s former Board of Directors, effective July 31, 2011. In addition, the New Auditor was our accountant
prior to our engaging the Former Auditor. The New Auditor opined on our financial statements for the years ended December 31,
2009 and 2008, on our Form 10-K for the fiscal year ended December 31, 2009. As stated in the New Auditor’s opinion included
in the Company’s Form 10-K filed with the Commission on April 23, 2010, the consolidated financial statements of the Company
were prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to such financial statements,
the Company’s continual net losses and large accumulated deficit, among other issues, raised substantial doubt about its
ability to continue as a going concern. Further, the Former Auditor was not consulted by the Company regarding the above referenced
matters.
The
Company provided the Former Auditor with the foregoing disclosure prior to its filing with the SEC in August 2011 and requested
that the Former Auditor furnish us with a letter addressed to the SEC stating whether or not it agreed with the above statements
and, if not, stating the respects in which it does not agree. The Former Auditor’s letter to the SEC was filed as Exhibits
16.1 to the Company’s current report on Form 8-K, as amended, filed with the SEC on September 6, 2011.
Item
9A. Controls and Procedures
Evaluation
of Disclosure 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 December 31, 2012. 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 identified material
weaknesses as discussed below in the report of management on internal control over financial reporting.
Report
of Management on Internal Control over Financial Reporting.
Our
current management is responsible for establishing and maintaining adequate internal control over financial reporting as defined
in Rules 13a-15(f) under the Exchange Act. Our current internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles. The Certifying Officers evaluated the effectiveness of the Company’s
internal control over financial reporting and concluded that, as of the end of the period covered by this report, the Company’s
internal control over financial reporting was not effective. Our internal control over financial reporting includes those policies
and procedures that:
(i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets;
(ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and
(iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets
that could have a material effect on the financial statements.
Management
conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal
Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and has
concluded that as of the end of the period covered by this report, our internal control over financial reporting was not effective.
A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement to the Company’s annual or interim financial statements will not
be prevented or detected. In connection with our evaluation of the effectiveness of our internal control over financial reporting,
management identified the following material weaknesses:
|
● |
We
lacked the controls necessary to ensure timely filings of our SEC filings, |
|
|
|
|
● |
We
lacked the controls necessary to ensure recorded amounts were accurately stated (resulting in multiple audit adjustments), |
|
|
|
|
● |
We
lacked sufficient segregation of duties, and |
|
|
|
|
● |
We
lacked the necessary controls to ensure money taken out of the Company was for business expenditures only. |
We
believe that our consolidated financial statements contained in this Annual Report on Form 10-K fairly present our financial position,
results of operations and cash flows for the fiscal year ending December 31, 2012 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.
This
Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over
financial reporting. Management’s Report was not subject to attestation by the company’s registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only Management’s Report
in this Annual Report.
Changes
in Internal Control Over Financial Reporting.
There
have been no changes in our internal control over financial reporting during the quarter ended December 31, 2012 that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item
9B. Other Information
None.
PART
III
Item
10. Directors, Executive Officers and Corporate Governance
The
following sets forth information about our current directors and officers of the Company.
Name
|
|
Age
|
|
Position
|
Tammy Taylor |
|
47 |
|
CEO, President,
Director, (Principal Financial Officer) |
M. Aimee Coleman |
|
42 |
|
Corporate Secretary
(Principal Accounting Officer) |
The
term of office of each director is one year or until his or her successor is elected at the Company’s annual meeting and
qualified. The term of office for each officer of the Company is at the pleasure of the Board.
Tammy
Taylor has been our President and Chief Executive Officer since August 21, 2013. With over 25 years combined experience
in the business, sales, real estate and human services industries and as a business owner for over 10 years, Ms. Taylor has gained
a wealth of experience in all aspects of running a successful company. Ms. Taylor has the ability to be strategic, detailed and
thorough when presented with any type of business challenge. Mr. Taylor has the ability to analyze an issue and then develop and
implement successful solutions in the development of new businesses and markets. With her combined experience in a number of business
industries, Ms. Taylor serves with passion and is driven to make any professional experience a success. Ms. Taylor has been a
licensed real estate agent in Florida since 2005 and the President of Tammy Taylor, PA, a company she founded in 2008 that has
been engaged in locating buyers and sellers of commercial and residential properties. Ms. Taylor founded Hope4UsNow, Inc. in 2012
and The Kindness Wave, Inc. in 2011 which operate online inspirational communities. Ms. Taylor served as a board member of the
Pinellas Realtor Organization and the Florida Realtors Association from 2008 to 2010. She is also the former Chairman of the International
Council for the Pinellas Realtor Organization in 2010 and has served on the Grievance, Government Relations and Political Action
Committees 2008 to 2010. Ms. Taylor earned sales and service awards six consecutive years as a realtor since 2005, including top
new real estate agent in Pinellas County, Florida. She has also been a spokesperson for the American Cancer Society. Ms. Taylor
earned a B.A. in Business/Organizational Development from Rosemont College in 1988.
We believe
that Ms. Taylor’s significant business, sales and management experience qualifies her to serve as a member of our board.
M.
Aimee Coleman has been our Corporate Secretary and Principal Accounting Officer since August 28, 2013. Ms. Coleman has
over 25 years of accounting and office management experience. Her experience includes major accounting and business software applications,
attention to back office operations that have provided major contributions to companies operations. She has proved to be instrumental
in the accurate and timely efforts required to move companies forward as quickly as possible including her current position as
bookkeeper at Brookridge Community Property Owners, Inc. where she has been employed since November 2008. In 1994, Ms. Coleman
received an Associate in Arts and Sciences degree in Chemistry from Community College of the Finger Lakes.
Family
Relationships
There are
no family relationships among any of our officers and directors.
Conflicts
of Interest
There
are no conflicts of interest that are inherent in the relationships between our officers and directors.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding
traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past 10
years that resulted in a judgment, decree, or final order enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters
that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain Relationships
and Related Transactions, and Director Independence—Transactions with Related Persons,” none of our directors, director
nominees, or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates,
or associates which are required to be disclosed pursuant to the rules and regulations of the Commission.
Corporate
Governance
Our
board has not established any committees, including an audit committee, a compensation committee or a nominating committee, or
any committee performing a similar function. The functions of those committees are being undertaken by our board. Because we do
not have any independent directors, our board believes that the establishment of committees of our board would not provide any
benefits to our Company and could be considered more form than substance.
We
do not have a policy regarding the consideration of any director candidates that may be recommended by our stockholders, including
the minimum qualifications for director candidates, nor have our officers and directors established a process for identifying
and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director
candidates by our stockholders, including the procedures to be followed. Our officers and directors have not considered or adopted
any of these policies as we have not received a recommendation from any stockholder for any candidate to serve on our board of
directors.
Given
our relative size and lack of directors’ and officers’ insurance coverage, we do not anticipate that any of our stockholders
will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in
the event such a proposal is made, all current members of our board will participate in the consideration of director nominees.
As
with most small, early stage companies until such time as our Company further develops our business, achieves a stronger revenue
base and has sufficient working capital to purchase directors’ and officers’ insurance, we do not have any immediate
prospects to attract independent directors. When we are able to expand our board to include one or more independent directors,
we intend to establish an audit committee of our board of directors. It is our intention that one or more of these independent
directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements
that a majority of our board members be independent and we are not currently otherwise subject to any law, rule or regulation
requiring that all or any portion of our board of directors include “independent” directors, nor are we required to
establish or maintain an audit committee or other committee of our board.
Code
of Ethics
The
Company has adopted a written code of ethics applicable to its principal executive officer, principal financial officer, principal
accounting officer, or persons performing similar functions, which complies with the requirement to adopt such a code of ethics
and is available on the Company’s website at www.garbreorg.com. We intend to post any amendments to the code, or any waivers
of its requirements related to certain matters, on our website.
Board
Oversight in Risk Management
Risk
is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of
risks, including liquidity risk, operational risk, strategic risk and reputation risk. Our Chief Executive Officer also serves
as our sole director and therefore, we do not have a lead director. In the context of risk oversight, at the present stage of
our operations, we believe that our selection of one person to serve in both positions provides the board with additional perspective
which combines the operational experience of a member of management with the oversight focus of a member of the board. The business
and operations of our company are managed by our board as a whole, including oversight of various risks that our company faces.
Section
16 Compliance
Section
16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% percent
of a registered class of the Company’s equity securities, to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors
and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. To the Company’s knowledge, based solely on review of the copies of such reports furnished to the Company and
written representations that no other reports were required, during the fiscal year ended December 31, 2012 all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with.
Item
11. Executive Compensation
2012
Summary Compensation Table
The
following table is the information pertaining to the total compensation of the Company’s former executive officers for the
fiscal years ended December 31, 2012 and December 31, 2011.
Name and Principal Position | |
Fiscal Year | | |
Salary ($) | | |
Bonus ($) | | |
Total ($) | |
John Rossi (1) | |
| 2012 | | |
$ | 240,000 | | |
$ | 1,344,538 | | |
$ | 1,584,538 | |
Former Chief Executive Officer | |
| 2011 | | |
$ | 240,000 | | |
$ | 400,000 | | |
$ | 640,000 | |
| |
| | | |
| | | |
| | | |
| | |
Igor Plahuta (1) | |
| 2012 | | |
$ | 240,000 | | |
$ | - | | |
$ | 240,000 | |
Former Chief Technology Officer | |
| 2011 | | |
$ | 240,000 | | |
$ | 400,000 | | |
$ | 640,000 | |
| |
| | | |
| | | |
| | | |
| | |
Alan Fleming (1) | |
| 2012 | | |
$ | 180,000 | | |
$ | - | | |
$ | 180,000 | |
Former Chief Operating Officer | |
| 2011 | | |
$ | 180,000 | | |
$ | 110,000 | | |
$ | 290,000 | |
|
(1) |
Messrs.
Rossi, Plahuta and Fleming are former officers of the Company. Each ceased to serve in his respective capacity as of August
21, 2013. |
The
bonus amounts indicated above were non-cash common stock compensation from the Company during the reported fiscal year ended.
On
October 27, 2009, the Company granted an aggregate of 100,000,000 stock options to Mr. Rossi and Mr. Plahuta as part of the acquisition
of Garb by RPS. The options were void after November 1, 2014 with no purchases being made. The purchase price per share would
have been computed based on the basis of one-tenth of the average closing ask price for 10 trading days prior to the date of exercise
of all or part of the options.
All
or substantially all of the listed salary amounts was being accrued rather than paid in cash. All accrued wages were converted
to company stock and issued to the three officers due wages.
The
Company currently has two employment agreements with its officers or directors and has no retirement, profit sharing, pension
or insurance plans, agreements or understanding covering them.
Compensation
of Directors
The
Company’s directors received no compensation. Directors who are or were also employees (Messrs. Rossi, Plahuta and Fleming;
and Ms. Taylor) are not paid for board services in addition to their regular employee compensation.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
A
change in control of the Company occurred on August 21, 2013.
The
following tables set forth certain information, as of March 9, 2015, with the respect of beneficial ownership of the Company’s
outstanding common stock and preferred stock by (i) any holder of more than five (5%) percent, (ii) each of the Company’s
executive officers and directors and (iii) the Company’s executive officers and directors as a group.
Unless
otherwise indicated, the business address of each person listed is in care of Garb Oil & Power Corporation, 1185 Gooden Xing,
Building C, Largo FL 33778. Except as otherwise indicated, the persons listed below have sole voting and investment power with
respect to all shares of the Company’s stock owned by them.
Class
A Preferred Stock (1)
Name and Address of Stockholder | |
Amount and Nature of Beneficial Ownership | | |
Percentage of Preferred Classes (1) | |
Tammy Taylor(2) | |
| 2 | (3) | |
| 8.3 | % |
M. Aimee Coleman (4) | |
| 1 | | |
| 4.2 | % |
| |
| | | |
| | |
All executive officers and directors as a group (two persons) | |
| 3 | | |
| 12.5 | % |
| |
| | | |
| | |
Corporate Business Advisors, Inc.(5) | |
| 19 | (1) | |
| 79.2 | % |
Rachelle Hoffmann, | |
| | | |
| | |
President and Registered Agent | |
| | | |
| | |
| |
| | | |
| | |
Dan Scott Burda | |
| 2 | | |
| 8.3 | % |
|
(1) |
The
voting rights of each share of the Class A Preferred Stock is equal to its percent of total outstanding Class A Preferred
Shares times the product of four times the sum of all other outstanding classes of the Company’s stock (Class B Preferred
Stock and Common Stock). As of March 9, 2015 there are 24 shares of Class A Preferred Stock outstanding with each
share of Class A Preferred Stock holding 7,933,666,396 voting rights, a total of 190,407,993,496 votes in the aggregate. |
|
(2) |
Tammy
Taylor is the Company’s Director, Chief Executive Officer and President and is the President of Hope4UsNow, Inc. |
|
(3) |
The
number of shares owned by Ms. Taylor includes 2 shares of the Class A Preferred Stock currently outstanding and owned by Hope4UsNow,
Inc. Ms. Taylor has voting and dispositive control over securities held by Hope4UsNow, Inc. |
|
(4) |
M.
Aimee Coleman is the Corporate Secretary and Principal Accounting Officer. |
|
(5) |
Ms.
Rachelle Hoffman who is the President of Corporate Business Advisors, Inc. has voting and dispositive control over securities
held by Corporate Business Advisors, Inc. |
Class
B Preferred Stock
Name and Address of Stockholder | |
Amount and Nature of Beneficial Ownership | | |
Percentage of Class B Preferred (1) | |
Tammy Taylor (2) | |
| 0 | | |
| 0 | |
M. Aimee Coleman (3) | |
| 0 | | |
| 0 | % |
| |
| | | |
| | |
All executive officers and directors as a group (two persons) | |
| 0 | | |
| 0 | % |
| |
| | | |
| | |
Corporate Business Advisors, Inc.(4) | |
| 3,600,000 | | |
| 81.4 | % |
| |
| | | |
| | |
Dan Scott Burda | |
| 441,930 | | |
| 10.0 | % |
|
(1) |
Each share of
Class B Preferred Stock is entitled to 10 votes per share. As of March 9, 2015 there are 4,419,918 shares of Class B Preferred
Stock outstanding with each share of Class B Preferred Stock holding 10 voting rights, a total of 44,199,180 votes. |
|
(2) |
Ms. Taylor is
Director, Chief Executive Officer and President is the President of Hope4UsNow, Inc. Ms. Taylor has voting and dispositive
control over securities held by Hope4UsNow, Inc. |
|
(3) |
Ms. Coleman is
the Company’s Corporate Secretary and Principal Accounting Officer. |
|
(4) |
Ms. Rachelle Hoffman
who is the President of Corporate Business Advisors, Inc. has voting and dispositive control over securities held by Corporate
Business Advisors, Inc. |
Common
Stock
Name and Address of Stockholder | |
Amount and Nature of Beneficial Ownership | | |
Percentage of Common (1) | |
Tammy Taylor(2) | |
| 566,666,667 | (2) | |
| 1.2 | % |
M. Aimee Coleman(3) | |
| 600,000,000 | | |
| 1.3 | % |
| |
| | | |
| | |
All executive officers and directors as a group (two persons) | |
| 1,166,666,667 | | |
| 2.5 | % |
| |
| | | |
| | |
Corporate Business Advisors, Inc.(4) | |
| 2,350,000,000 | | |
| 4.9 | % |
| |
| | | |
| | |
Dan Scott Burda | |
| 3,796,521,515 | | |
| 8.0 | % |
|
(1) |
Amounts
based on 47,597,578,456 shares of Common Stock outstanding as of March 9, 2015. |
|
(2) |
Ms.
Taylor is Director, Chief Executive Officer and President who is Managing Director of Hope4UsNow, Inc. that owns 300,000,000
Common shares. Ms. Taylor has voting and dispositive control over securities held by Hope4UsNow, Inc. She
is also partial owner of The Kindness Wave, Inc. that purchased 266,666,667 Common shares. |
|
(3) |
Ms.
Coleman is the Corporate Secretary and Principal Accounting Officer. |
|
(4) |
Ms.
Rachelle Hoffman who is the President of Corporate Business Advisors, Inc. has voting and dispositive control over securities
held by Corporate Business Advisors, Inc. |
Item
13. Certain Relationships and Related Transactions, and Director Independence
On
November 1, 2009, the Company executed employment agreements with each of John Rossi and Igor Plahuta. Per each of the employment
agreements, each officer received a base salary of $20,000 per month, as well as an incentive bonus based on certain revenue and
profit metrics, and certain other perquisites. Each of the employment agreements terminated upon Messrs. Rossi’s and Plahuta’s
respective resignations.
Accounts
payable to related parties was $290,519 and $281,082 as of the years ended December 31, 2012 and 2011, respectively.
Director
Independence
We
did not, during the fiscal year ended December 31, 2012, and currently, we do not, have any independent directors. Because our
common stock is not currently listed on a national securities exchange, we have used the definition of “independence”
of The NASDAQ Stock Market to make this determination.
The
former Company’s board of directors did not have a separately designated audit, nominating or compensation committee. We
do not currently have a separately designated nominating or compensation committee.
Item
14. Principal Accountant Fees and Services
The
following table shows the fees that were billed for the audit and other services for the fiscal years ended December 31, 2012
and December 31, 2011.
| |
2012 | | |
2011 | |
Audit Fees | |
$ | 40,800 | | |
$ | 40,800 | |
Audit-related Fees | |
| - | | |
| - | |
Tax Fees | |
| - | | |
| - | |
All other fees | |
| - | | |
| - | |
| |
| | | |
| | |
Total Fees | |
$ | 40,800 | | |
$ | 40,800 | |
Audit
Fees – This category includes the audit of our annual financial statements, review of financial statements included
in our quarterly reports and services that are normally provided by the independent registered public accounting firm in connection
with engagements for those years and services that are normally provided by our independent registered public accounting firm
in connection with statutory audits and Securities and Exchange Commission regulatory filings or engagements.
Audit-Related
Fees – This category consists of assurance and related services by the independent registered public accounting firm
that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under
“Audit Fees”.
Tax
Fees – This category consists of professional services rendered by our independent registered public accounting firm
for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and
technical tax advice.
Other
Fees – This category consists of fees for the audits on the financial statements of our client companies and all other
miscellaneous items.
Pre-Approval
Policies and Procedure for Audit and Permitted Non-Audit Services
The
Company has not adopted any written pre-approval policies or procedures as described in paragraph (c)(7)(i) of Rule 2.01 of Regulation
S-X.
PART
IV
Item
15. Exhibits and Financial Statement Schedules
(a)(1)
Financial Statements
The
consolidated financial statements and Report of Independent Registered Public Accounting Firm are listed in the “Index to
Financial Statements” on page F-1 and included on pages F-2 through F-37.
(2) Financial Statement Schedules
All
other schedules are omitted as the required information is either inapplicable or it is presented in the consolidated financial
statements and notes thereto.
(3)
Exhibits
The
Exhibits required by Item 601 of Regulation S-K are listed in paragraph (b) below.
(b)
Exhibits
The
following exhibits are filed or furnished herewith or are incorporated herein by reference to exhibits previously filed with the
SEC.
Exhibit |
|
|
|
|
No.
|
|
Description
|
|
Location
|
2.1 |
|
Purchase
of Business Agreement between the Company and Eric Ernst and Heather Ernst dated September 26, 2014. |
|
Incorporated
by referenced to Exhibit 2.1 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
3.1 |
|
Articles
of Incorporation of the Company dated October 30, 1972. |
|
Incorporated
by reference to Exhibit 3.1 to the Company’s annual report on Form 10-K for the year ended December 31, 2011 (filed
on March 24, 2015. |
|
|
|
|
|
3.2 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated February 7, 1978. |
|
Incorporated
by reference to Exhibit 3.2 to the Company’s annual report on Form 10-K for the year ended December 31, 2009, filed
on April 23, 2010. |
|
|
|
|
|
3.3 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated January 15, 1981. |
|
Incorporated
by reference to Exhibit 3.3 to the Company’s annual report on Form 10-K for the year ended December 31, 2009, filed
on April 23, 2010. |
3.4 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated May 4, 1984. |
|
Incorporated
by reference to Exhibit 3.4 to the Company’s annual report on Form 10-K for the year ended December 31, 2009, filed
on April 23, 2010. |
|
|
|
|
|
3.5 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated October 31, 1985. |
|
Incorporated
by reference to Exhibit 3.5 to the Company’s annual report on Form 10-K for the year ended December 31, 2009, filed
on April 23, 2010. |
|
|
|
|
|
3.6 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated May 19, 2006. |
|
Incorporated
by reference to Exhibit 3.6 to the Company’s annual report on Form 10-K for the year ended December 31, 2009, filed
on April 23, 2010. |
|
|
|
|
|
3.7 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated March 10, 2010. |
|
Incorporated
by reference to Exhibit 99.3 to the Company’s current report on Form 8-K, filed on March 11, 2010. |
|
|
|
|
|
3.8 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated March 15, 2011. |
|
Incorporated
by reference to Exhibit 3.8 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
3.9 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated April 4, 2013. |
|
Incorporated
by reference to Exhibit 3.9 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
3.10 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated May 21, 2013. |
|
Incorporated
by reference to Exhibit 3.10 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
3.11 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated February 6, 2014. |
|
Incorporated
by reference to Exhibit 3.11 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
3.12 |
|
Articles
of Amendment to Articles of Incorporation of the Company dated June 13, 2014. |
|
Incorporated
by reference to Exhibit 3.12 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
3.13 |
|
By-Laws
of the Company dated October 31, 1985. |
|
Incorporated
by reference to Exhibit 3.8 to the Company’s registration statement on Form 10 (File No. 0-14859), filed April 23, 2010. |
|
|
|
|
|
10.1* |
|
Principal
Officer Employment Contract between the Company and Tammy Taylor dated August 21, 2013. |
|
Incorporated
by reference to Exhibit 10.1 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.2* |
|
Principal
Officer Employment Contract between the Company and M. Aimee Coleman dated August 28, 2013. |
|
Incorporated
by reference to Exhibit 10.2 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.3 |
|
Letter
of Intent between the Company and Shredderhotline.com Company dated January 24, 2014. |
|
Incorporated
by reference to Exhibit 10.3 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.4 |
|
Collaborative
Effort Agreement between the Company and Shredderhotline.com Company dated January 24, 2014. |
|
Incorporated
by reference to Exhibit 10.4 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.5 |
|
Addendum
to Collaborative Effort Agreement by and between the Company and Shredderhotline.com Company dated January 29, 2014. |
|
Incorporated
by reference to Exhibit 10.5 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
10.6 |
|
Engagement
Letter between the Company and Street Capital Inc. dated February 28, 2014. |
|
Incorporated
by reference to Exhibit 10.6 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.7 |
|
Letter
of Intent between the Company and Pro Peke Power LLC dated May 7, 2014. |
|
Incorporated
by reference to Exhibit 10.7 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.8 |
|
Agreement
between the Company and Integrated Business Alliance LLC (d/b/a Pacific Equity) dated May 14, 2014. |
|
Incorporated
by reference to Exhibit 10.8 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.9 |
|
Lease
to Own Agreement with Pro Peke Power LLC dated June 16, 2014. |
|
Incorporated
by reference to Exhibit 10.9 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.10 |
|
Addendum
to Contract dated June 18, 2014 between the Company and Pro Peke Power LLC. |
|
Incorporated
by reference to Exhibit 10.10 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
10.11* |
|
Employment
Agreement between the Company and Eric Ernst dated September 26, 2014. |
|
Incorporated
by reference to Exhibit 10.11 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
14.1 |
|
Code
of Ethics. |
|
Incorporated
by reference to Exhibit 14.1 to the Company’s annual report on Form 10-K for the year ended December 31, 2011, filed
on March 24, 2015. |
|
|
|
|
|
21.1 |
|
List
of Subsidiaries of the Company. |
|
Filed
herewith. |
|
|
|
|
|
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. |
|
Furnished
herewith. |
|
|
|
|
|
101.INS** |
|
XBRL
Instance Document |
|
Furnished
herewith. |
101.SCH** |
|
XBRL
Taxonomy Extension Schema Document |
|
Furnished
herewith. |
101.CAL** |
|
XBRL
Taxonomy Extension Calculation Linkbase Document |
|
Furnished
herewith. |
101.DEF** |
|
XBRL
Taxonomy Extension Label Linkbase Document |
|
Furnished
herewith. |
101.LAB** |
|
XBRL
Taxonomy Extension Label Linkbase Document |
|
Furnished
herewith. |
101.PRE** |
|
XBRL
Taxonomy Extension Presentation Linkbase Document |
|
Furnished
herewith. |
* Management
contract or compensatory plan or arrangement.
**
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of this annual report on Form 10-K
for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
(c) None.
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 (principal executive |
|
March
24, 2015 |
Tammy Taylor |
|
officer and principal
financial officer) |
|
|
|
|
|
|
|
/s/
M. Aimee Coleman |
|
Corporate
Secretary (principal accounting officer) |
|
March
24, 2015 |
M. Aimee Coleman |
|
|
|
|
Exhibit
21.1
Garb
Oil & Power Corporation
Subsidiaries
of the Registrant
Name |
|
Place
of Incorporation |
Resource
Protection Systems GmBH
Garb
Global Services, Inc. |
|
Iserlohn,
Germany
Florida,
USA |
Exhibit
31.1
Certifications
I, Tammy Taylor, certify that:
1. I have reviewed this Annual Report on Form
10-K for the fiscal year ended December 31, 2012 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
Certifications
I,
M. Aimee Coleman, certify that:
1.
I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2012 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 Annual Report on Form 10-K of Garb Oil & Power Corporation (the “Company”) for the fiscal
year ended December 31, 2012 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 Annual Report on Form 10-K for the year ended December 31, 2012, and they shall not be considered
filed as part of such report.
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