ITEM 1.DESCRIPTION OF BUSINESS
GENERAL
The Company was incorporated in Florida on July 16, 1998 under the name of Salty’s Warehouse, Inc. and was engaged in selling name brand consumer products over the Internet. The Company focused on selling consumer electronics and audio-video equipment such as speakers, amplifiers, and tuners, although the Company also sold assorted other goods such as 6watches, sunglasses and sports games. On December 11, 2006, owners of an aggregate of 224,500 shares of common stock, of Salty’s Warehouse, Inc. sold in a private transaction all of the shares held by them to a group of approximately 54 purchasers. As a result of this transaction, a change of control in the Company occurred resulting in a change in the name of the Company to E World Interactive, Inc. (the “Company” or “E World”). At that time, E World mainly engaged in selling of online game services and media production business in Mainland China.
Having operated in this sector for some time, the Company then disposed of its subsidiaries Shanghai E World China Information Technologies Co., Ltd (“E World China”) and Mojo Media Works Limited in August 2008, and following this ceased all business in online game and media production business and became a dormant shell company.
In March of 2009, the Company entered into a stock purchase agreement with Blue Atelier, Inc. Blue Atelier acquired 10,000,000 newly authorized and issued common stock of E World Interactive Inc. (“EWRL”) after E World executed a forty to one reverse split of the issued and outstanding common stock and also entered into a series of agreements with various holders of Convertible Notes to convert its notes payable plus accumulated interest to E World Common Stock in the aggregate to 2,749,132 shares of common stock. As a result of this transaction, a change of control in the Company occurred in E World Interactive, Inc. with Blue Atelier then owning 75% of the outstanding common stock of E World.
In May 2010, the Company acquired 100% of the outstanding common stock of Media and Technology Solutions, Inc., a Nevada corporation with a variety of media and related interests in rights and emerged from dormant shell status. The consideration for the purchase of Media and Technology was 4,000,000 shares of E World Common Stock and Blue Atelier Inc., the principle shareholder of Media and Technology is also the largest shareholder in E World. Following this acquisition. The acquisition of Media and Technology has been accounted for similar to a pooling in accordance with GAAP because the entities were under common control.
On September 17, 2011 E World Interactive entered into a letter of intent (the “LOI”) with Green Renewable Energy Solutions, Inc. (“GRES”) the purpose of which to acquire the assets of GRES which included certain contracts for the acceptance, processing and disposal of construction and demolition waste and as part of this agreement, E World changed its name to Green Energy Renewable Solutions (“the Company” , “Green Energy Renewable Solutions” or “GERS”), effective December 12, 2011. As part of this LOI, Green Energy Renewable Solutions f/k/a E World would complete a 5 to 1 reverse split, spin out its subsidiary company E World Corp and Media and Technology Solutions, Inc. and complete the transaction with the issue of stock for the purchase of the assets of Green Renewable Energy Solutions, Inc.
On January 26, 2012 Green Energy Renewable Solutions, Inc. (F/K/A E World Interactive, Inc.) completed the 5 to 1 reverse split and on February 4, 2012 E World Corp including its subsidiary company, Media and Technology Solutions, Inc. was spun out as a separate private company by way of share dividend with one E World Corp share issued for every share held on the date of the reverse split approval. FINRA approved the name change and reverse split on January 26, 2012. On February 4, 2012 Green Renewable Energy Solutions, Inc. executed the Asset Purchase Agreement with Green Energy Renewable Solutions, Inc. F/K/A E World Interactive, Inc., the Issuer herein. Under the terms of the Asset Purchase Agreement Green Energy Renewable Solutions F/K/A E World Interactive, Inc., purchased all of the assets of Green Renewable Energy Solutions, Inc. for 6,209,334 common shares of Green Energy Renewable Solutions, Inc. F/K/A E World Interactive, Inc. and a further 4,604,666 common shares of deferred consideration. Green Energy Renewable Solutions key area of business is focused on the acquisition of waste streams and maximizing their value utilizing recycling, renewable energy production, and environmentally responsible disposal strategies.. On June 27, 2012, the Company approved a one for one stock dividend for shares held on June 29, 2012 and the dividend shares were issued following FINRA approval on July 27, 2012.
Green Energy Renewable Solution has its head office at 243 W Congress, Suite 350, Detroit, MI 48226.
Green Energy Renewable Solutions, Inc. has never declared bankruptcy and has never been in receivership. The common stock of Green Energy Renewable Solutions, Inc. is quoted on the OTC Bulletin Board under the symbol EWRL.QB.
The Company has a December 31st fiscal year end.
EMPLOYEES
The company has three employees. At December 31, 2012 the Company’s executive team was performing under consulting arrangements with Green Energy Renewable Solutions, Inc. Mr. Joe DuRant functions as Company President and Chief Executive Officer and Mr. Frank O Donnell serves as Executive Vice President, Business Development and Chairman of the Board. On January 1, 2013 Mr. Durant and Mr. O Donnell became employees. On February 1, 2013, Roger Silverthorn became the Chief Financial Officer as an employee.
ITEM 2.
ITEM 2.DESCRIPTION OF PROPERTY
Green Energy Renewable Solutions, Inc. has a parcel of real estate at Lincoln Ave. Highland Park, MI and had previously entered into an letter of intent to purchase a further parcel of real estate at Oakman Blvd. The Company is now exploring alternative locations to the Highland Park location which is now deemed unsuitable for environmental reasons.
The Company’s offices are at 243 W Congress, Suite 350, Detroit, MI 48226 comprised of facilities for administrative offices.
ITEM 3.
ITEM 3.LEGAL PROCEEDINGS
No legal proceedings were initiated or served upon the Company in the fiscal year ending December 31, 2012. We are not currently involved in any material legal proceedings. We are not aware of any material legal proceedings pending against us.
ITEM 4.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In September 2009, the company executed a 40 to 1 reverse split following the approval of a majority of the shareholders with the holders of over 56% of the shares eligible to vote supporting the Board’s decision for the reverse split.
In January of 2012, the company executed a 5 to 1 reverse split following the approval of the majority of the shareholders holding over 71% of the shares eligible to vote supporting the Board’s decision for the reverse split. The reverse split along with the change of name to Green Energy Renewable Solutions, Inc. was approved by FINRA on January 26, 2012. Additionally on June 27, 2012, the Company approved a one for one stock dividend for shares held on June 29, 2012 and the dividend shares were issued following FINRA approval on July 27, 2012
On June 27, 2012 the Company announced that its Board of Directors had approved a one share for one share stock dividend of the Company’s common stock, regarding this as an effective forward split. Each shareholder of record at the close of business on June 29, 2012 will receive one additional share for every outstanding share held on the record date. The Articles were amended to reflect this on July 16, 2012 and this received FINRA approval on July 27, 2012. All share amounts in the Financial Statements have been restated to reflect the dividend share/forward split.
PART II
ITEM 5.
ITEM 5.MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
On December 31, 2012, there were approximately 80 shareholders of record and an undetermined number of holders in street name. The Company’s common stock is traded on the Over the Counter Bulletin Board, trading symbol “EWRL”
ITEM 6SELECTED FINANCIAL DATA
Not applicable.
ITEM 7.
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Green Energy Renewable Solutions, Inc. common stock is quoted on the Over-The-Counter Bulletin Board under the symbol “EWRL.QB”. The first available quotations on the Over-The-Counter Bulletin Board appear at the end of January 2007. The quotations provided are for the over the counter market which reflect interdealer prices without retail mark-up, mark-down or commissions, and may not represent actual transactions. The prices included below have been obtained from sources believed to be reliable:
Holders
Total shares outstanding as of December 31, 2012 were 62,636,850; and were held by approximately 80 shareholders of record and an undetermined number of holders in street name.
Dividend Policy
Green Energy Renewable Solutions, Inc. has never paid a cash dividend on its common stock and does not anticipate paying any cash dividends on its common stock in the next 12 month period.
We intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on common stock will be the sole discretion of the Board of Directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.
On June 27, 2012 the Company announced that its Board of Directors had approved a one share for one share stock dividend of the Company’s common stock, regarding this as an effective forward split. Each shareholder of record at the close of business on June 29, 2012 will receive one additional share for every outstanding share held on the record date. The Articles were amended to reflect this on July 16, 2012 and this received FINRA approval on July 27, 2012. All share amounts in the Financial Statements have been restated to reflect the dividend share/forward split.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This statement may include projections of future results and “forward looking statements” as that term is defined in Section 27A of the Securities Act of 1933 as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). All statements that are included in this Annual Report, other than statements of historical fact, are forward looking statements. Although management believes that the expectations reflected in these forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported. Note 2 of the accompanying notes to the consolidated financial statements describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.
A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:
· We are required to make assumptions about matters that are highly uncertain at the time of the estimate; and
· Different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.
Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.
a)Impairment of Long-Lived Assets and Intangible Assets
Long-lived assets and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of the long-lived assets and intangible assets (other than goodwill) by comparing the carrying amount to the estimated future undiscounted cash flow associated with the related assets. The Company recognizes impairment of long-lived assets and intangible assets in the event that the net book value of such assets exceeds the estimated future undiscounted cash flow attributed to such assets. The Company uses estimates and judgments in its impairment tests and if different estimates or judgments had been utilized, the timing or the amount of the impairment charges could be different.
b)Share-based Payments
The Company records stock-based compensation issued to non-employees or other external entities for goods and services at either the fair market value of the shares issued or the value of the services received, whichever is more readily determinable, using the measurement date guidelines enumerated in FASB ASC 505-50-30.
Green Energy Renewable Solutions, Inc.
Plan of Operations
Green Energy Renewable Solutions business is that of waste conversion and waste to energy a dynamic area of growth potential in the market place with the emphasis on waste conversion using recycling and new technologies that are creating valuable assets and income streams from waste materials.
Comparable operations in the waste conversion and recycling industry have achieved high levels of profitability with relatively low investment. There is an existing and growing demand for the services to be offered by Green Energy. The company seeks out opportunities where there is a short window to positive cash-flow and revenues and where the waste conversion project can be extended to waste to energy generation creating long-term high value assets.
The Green Energy business model is summarized as follows:
1.Secure existing large scale waste streams through acquisition of landfills, joint ventures and contracts with source generators (Acquired waste streams include both municipal solid waste (“MSW”) and construction & demolition debris (“C&D”).
2.Secure short term revenue and cash flow through landfill remediation plans, introduction of recycling strategies applicable to established waste streams.
3.Introduction of Waste to Energy (“WTE”) technology to generate fuels and electricity for sale under long-term contracts.
4.Joint venture and Investment in conversion technologies will offer additional revenue opportunities and will reduce internal capital costs and capture future revenue from external technology sales.
Strategies employed include acquisition of existing landfills to internalize control of contracted and historical waste streams. By developing remediation action plans and other strategies the company is seeking acquisition opportunities where operating efficiencies and diversion tactics will allow increased revenue and improved margins. Introduction of recycling for incoming materials can reduce the volume of incoming materials landfilled by over 50% and over 90% with introduction of WTE strategies. Metals, plastics, cardboard/paper and other recyclable materials represent significant potential revenue and the conversion of the remaining material to refuse derived fuel (RDF) for gasification to create fuels and electricity provide further revenue enhancements. The diversion of incoming waste can substantially increase the life of the landfill while maintaining tipping fee income. Increased WTE output can further allow for increased intake of MSW and C&D and corresponding tipping fee income with minimal landfill impact.
Green Energy Renewable Solutions operates in a low risk manner with limited financial exposure on its downside risk while maintaining major upside potential. Green Energy Renewable Solutions’ key expertise from its Board members, its management and its associates gives it a major advantage to successfully exploit this ‘green energy’ business focus and it has a pipeline of opportunities, some of which have rights to proprietary technologies.	
The Company is headquartered in Detroit, Michigan and is currently developing construction and demolition waste and municipal solid waste diversion, recycling and energy recovery operations in Highland Park, Michigan and in Puerto Rico with other projects in the early planning stages
Financial Condition and Results of Operations
Below is a comparison of results of operations for the years ending December 31, 2012 and December 31, 2011.
The Company reported a net loss of $5,876,863 for the year ending December 31, 2012 versus a net loss of $336,602 for the year ending December 31, 2011.
For the year ending December 31, 2012; the primary contributors to the net loss of $5,876,863 were executive compensation for the management team of $3,526,970, impairment of intangible assets of $690,700, loss on the settlement of accounts payable paid by stock of $518,122, financing costs of $365,582, professional fees of $493,643 and waste project development fees of $182,448. Interest expense for 2012 was $52,253. For the year ending December 31, 2011; primary contributors to the net loss of $336,602 included professional fees of $46,280; executive compensation of 195,000 other general and administrative expenses of $44,686; interest expense of $12,000 and loss on foreign currency exchange of $1,113.
Prior period comparisons of results are impacted by developing operations during the periods covered.
Liquidity and Capital Resources
During the year ending December 31, 2012 net cash used in operating activities totaled $377,372. Cash generated by financing activities was $378,063 resulting primarily from the sale of common stock for cash and cash used in investing activities totaled $-0-. Increase in cash for the period was $691.
During the year ending December 31, 2011 net cash used in operating activities totaled $180,841. Cash used by investing activities totaled $32,752 from the sales of subsidiary stock for cash prior to acquisition. Cash provided by financing activities totaled $213,188. Decrease in cash for the period was $405.
Convertible Notes
Asher Enterprises Promissory Note I August 7, 2012
On July 10, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $32,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 12, 2013. During the year period ended December 31, 2012 the Company accrued $1,239 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading immediately prior to conversion date.
As of December 31, 2012 the convertible note payable was recorded net of unamortized debt and accrued interest discount of $8,316.
Asher Enterprises Promissory Note II August 28, 2012
On August 28, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $32,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 30, 2013. During the year period ended December 31, 2012 the Company accrued $890 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date.
As of December 31, 2012 the convertible note payable was recorded net of unamortized debt and accrued interest discount of $13,857.
Asher Enterprises Promissory Note III October 12, 2012
On October 12, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $27,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 16, 2013. During the year period ended December 31, 2012 the Company accrued $482 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date.
As of December 31, 2012 the convertible note payable was recorded net of unamortized debt discount and accrued interest of $14,073.
Asher Enterprises Promissory Note IV November 29, 2012
On November 29, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $27,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 3, 2013. During the year period ended December 31, 2012 the Company accrued $193 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date.
As of December 31, 2012 the convertible note payable was recorded net of unamortized debt discount and accrued interest of $18,764.
JMJ Financial Promissory Note IV October 21, 2012
On October 21, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $35,000. The promissory note is unsecured, bears interest at 5% per annum, and matures on September 30, 2013. During the year period ended December 31, 2012 the Company accrued $292 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date.
As of December 31, 2012 the convertible note payable was recorded net of unamortized debt discount and accrued interest of $23,420.
As of December 31, 2012, the Company has reserved a total of 18,826,000 shares of common stock for the potential conversion the above promissory notes.
Blue Atelier Promissory Note
In May 2010, the Company acquired Media and Technology Solutions, Inc., and Media and Technology holds an 8% convertible note with Blue Atelier, Inc., the majority shareholder of Green Energy Renewable Solutions. The convertible note was issued by Media and Technology in connection with the purchase of intangible assets. The note matures on June 30, 2012 with interest due at maturity and may be converted to common stock at a price to be agreed. During the year, as part of an internal reorganization, the ownership of Media and Technology was assigned to E World Corp, a wholly owned subsidiary of Green Energy Renewable Solutions.
After the balance sheet date, E World Corp including its subsidiary company, Media and Technology Solutions, Inc. was spun out as a separate private company by way of share dividend. The convertible note with Blue Atelier, Inc. together with accrued interest remained with Media and Technology Solutions, Inc.
Material Impact of Known Events on Liquidity
Other than the general economic, financial and credit problems being experienced throughout the world markets and economies resulting in a general reduction of available credit and investment funds; we have not identified any known trends or any known demands, commitments, events or uncertainties that will result in or are reasonably likely to result in a material increase or decrease in our liquidity. We have historically financed our operations through the sale of our common equity and continue to experience the same difficulties in the current financial environment as we had in the past. Our limited operational history and lack of current revenues are more of an impact on financing efforts to sustain and expand our operations than the global economic condition.
Cash Flow Requirements for Operations
As of December 31, 2012 we had available cash of $1,007. Based on our historical cash needs and our business plan, we require approximately $945,000 for operations for the coming year. We currently have legal and accounting expenses with no revenue generating operations. We rely on sale of our common shares and advances from our majority shareholder to fund our operating needs.
Going Concern
Our continuation as a going concern is dependent upon obtaining the additional working capital necessary to sustain our current status. As shown in the accompanying financial statements, the Company has incurred an accumulated deficit of $4,514,336 from inception to April 1, 2010 and $6,367,325 during the development stage from April 1, 2010 through December 31, 2012. The future of the Company is dependent upon its ability to obtain additional financing. Management plans to seek additional financing through debt or the sale of its common stock through private placements. There is no assurance that the will raise sufficient funds to continue. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements or financing activities with special purpose entities.
ITEM 7A.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Eworld Corp Promissory Note
On November 2, 2011, the Company received funding pursuant to a convertible promissory note in the amount of $65,500. The promissory note is unsecured, bears interest at 20% per annum, and was due on November 21, 2011 and is currently in default.
Blue Atleier Convertible Note
On May 21, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $5,000. The promissory note is unsecured, bears interest at 10% per annum, and was due on June 30, 2012 and is currently in default.
ITEM 8.
ITEM 8.FINANCIAL STATEMENTS
Our financial statements, together with the report of auditors, are as follows:
GREEN ENERGY RENEWABLE SOLUTIONS, INC.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2012 AND DECEMBER 31, 2011
Green Energy Renewable Solutions, Inc.
Financial Statements Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Green Energy Renewable Solutions, Inc.
We have audited the accompanying consolidated balance sheets of Green Energy Renewable Solutions, Inc.(A Development Stage Company) (the “Company”) as of December 31, 2012 and 2011 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended and for the period from April 1, 2010 (Development Stage entry date) through December 31, 2012. Green Energy Renewable Solutions’ management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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 financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 Green Energy Renewable Solutions, Inc.(A Development Stage Company) as of December 31, 2012 and 2011 and the results of their operations and their cash flows for the years then ended and for the period from April 1, 2010 (Development Stage entry date) through December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has incurred losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ De Joya Griffith, LLC
Henderson, Nevada
April 11, 2013
Corporate Headquarters:
De Joya Griffith, LLC
Anthem Village Drive, Henderson, NV 89052 Phone: (702) 563-1600 Fax: (702) 920-8049
Green Energy Renewable Solutions, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(Audited)
The accompanying notes are an integral part of these consolidated financial statements.
Green Energy Renewable Solutions, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(Audited)
The accompanying notes are an integral part of these consolidated financial statements.
Green Energy Renewable Solutions, Inc.
(A Development Stage Company)
Consolidated Statements of Stockholders’ Deficit
(Audited)
The accompanying notes are an integral part of these consolidated financial statements.
Green Energy Renewable Solutions, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Audited)
The accompanying notes are an integral part of these consolidated financial statements.
Notes to Financial Statements
Note 1 - Nature of Operations
The Company was incorporated in Florida on July 16, 1998 under the name of Salty’s Warehouse, Inc. and was engaged in selling name brand consumer products over the Internet. The Company focused on selling consumer electronics and audio-video equipment such as speakers, amplifiers, and tuners, although the Company also sold assorted other goods such as 6watches, sunglasses and sports games. On December 11, 2006, owners of an aggregate of 224,500 shares of common stock, of Salty’s Warehouse, Inc. sold in a private transaction all of the shares held by them to a group of approximately 54 purchasers. As a result of this transaction, a change of control in the Company occurred resulting in a change in the name of the Company to E World Interactive, Inc. (the “Company” or “E World”). At that time, E World mainly engaged in selling of online game services and media production business in Mainland China.
Having operated in this sector for some time, the Company then disposed of its subsidiaries Shanghai E World China Information Technologies Co., Ltd (“E World China”) and Mojo Media Works Limited in August 2008, and following this ceased all business in online game and media production business and became a dormant shell company.
In March of 2009, the Company entered into a stock purchase agreement with Blue Atelier, Inc. Blue Atelier acquired 10,000,000 newly authorized and issued common stock of E World Interactive Inc. (“EWRL”) after E World executed a forty to one reverse split of the issued and outstanding common stock and also entered into a series of agreements with various holders of Convertible Notes to convert its notes payable plus accumulated interest to E World Common Stock in the aggregate to 2,749,132 shares of common stock. As a result of this transaction, a change of control in the Company occurred in E World Interactive, Inc. with Blue Atelier then owning 75% of the outstanding common stock of E World.
In May 2010, the Company acquired 100% of the outstanding common stock of Media and Technology Solutions, Inc., a Nevada corporation with a variety of media and related interests in rights and emerged from dormant shell status. The consideration for the purchase of Media and Technology was 4,000,000 shares of E World Common Stock and Blue Atelier Inc., the principle shareholder of Media and Technology is also the largest shareholder in E World. Following this acquisition. The acquisition of Media and Technology has been accounted for similar to a pooling in accordance with GAAP because the entities were under common control.
On September 17, 2011 E World entered into a letter of intent (the “LOI”) with Green Renewable Energy Solutions, Inc. (“GRES”) the purpose of which is to acquire the assets of GRES which included certain contracts for the acceptance, processing and disposal of construction and demolition waste and as part of this agreement, E World changed its name to Green Energy Renewable Solutions (“Green Energy Renewable Solutions” or “GERS”), effective December 12, 2011. As part of this LOI, Green Energy Renewable Solutions (F/K/A E World Interactive) would complete a 5 to 1 reverse split, spin-out its subsidiary company E World Corp and Media and Technology Solutions, Inc. and complete the transaction with the issuance of stock for the purchase of the assets of Green Renewable Energy Solutions, Inc.
On January 26, 2012 Green Energy Renewable Solutions, Inc. (F/K/A E World Interactive, Inc.), completed the 5 to 1 reverse split and on February 1, 2012 E World Corp including its subsidiary company, Media and Technology Solutions, Inc. was spun-out as a separate private company by way of share dividend with one E World Corp share issued for every share held on the date of the reverse split approval. FINRA approved the name change and reverse split on January 26, 2012.
On February 4, 2012 Green Renewable Energy Solutions, Inc. executed the Asset Purchase Agreement with Green Energy Renewable Solutions, Inc. (F/K/A E World Interactive, Inc.), the issuer herein. Under the terms of the Asset Purchase Agreement Green Energy Renewable Solutions (F/K/A E World Interactive, Inc.), purchased all of the assets of Green Renewable Energy Solutions, Inc. for 9,209,334 common shares of Green Energy Renewable Solutions, Inc. (F/K/A E World Interactive, Inc.) and further 4,604,666 common shares of deferred consideration.
Green Energy Renewable Solutions key area of business is focused on the development of construction and demolition waste business opportunity in Highland Park, Michigan and the further development of waste to energy opportunities related to this business.
Green Energy Renewable Solution has its head office at 243 W. Congress, Suite 350, Detroit, Michigan 48226.
Note 2 - Summary of Significant Accounting Policies
a)Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.
On April 1, 2010, the Company entered into the development stage accumulating a net loss of $6,367,235 from April 1, 2010 to December 31, 2012.
b)Principles of Consolidation
The consolidated financial statements include the accounts of Green Energy Renewable Solutions and its wholly owned subsidiaries. On July 27, 2011 the Company incorporated a new wholly owned subsidiary E World Corp and on May 24, 2010, the company had acquired 100% of the outstanding stock of Media and Technology Solutions, Inc. On the date of acquisition, Media and Technology was 95% owned by Blue Atelier, Inc., the majority shareholder of Green Energy Renewable Solutions Interactive, Inc. and the acquisition was accounted by means of a pooling of the entities from the date of inception of Media and Technology on February 1, 2010 because the entities were under common control. All significant inter-company transactions and balances have been eliminated. Ownership of Media and Technology Solutions, Inc. was transferred to E World Corp, a transaction which had no effect on the consolidated financial statements at December 31, 2011. On February 04, 2012 E World Corp was spun-out of Green Energy Renewable Solutions.
c)Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents.
d)Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statements include accounting for asset impairments, reserves established for doubtful accounts, stock-based compensation, depreciation and amortization, business combinations, income taxes, litigation matters and contingencies.
e)Significant Risks and Uncertainties
The Company's management believes that changes in any of the following areas could have a material adverse effect on the Company's future financial position, results of operations or cash flows: the Company's limited operating history; the Company’s ability to acquire new companies with profitable operations; the company’s ability to generate revenue and positive cash flow; advances and trends in new technologies and industry standards; competition from other competitors; regulatory related factors; risks associated with the Company's ability to attract and retain employees necessary to support its growth; and risks associated with the Company's growth strategies.
f)Impairment of Long-Lived Assets and Intangible Assets
Long-lived assets and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses the recoverability of the long-lived assets and intangible assets (other than goodwill) by comparing the carrying amount to the estimated future undiscounted cash flow associated with the related assets. The Company recognizes impairment of long-lived assets and intangible assets in the event that the net book value of such assets exceeds the estimated future undiscounted cash flow attributed to such assets. The Company uses estimates and judgments in its impairment tests and if different estimates or judgments had been utilized, the timing or the amount of the impairment charges could be different.
g)Leases
Leases for which substantially all of the risks and rewards of ownership of assets remain with the leasing company are accounted for as operating leases. The company is leasing the real estate on a month-to-month basis at 243 W. Congress, Suite 350, Detroit, Michigan 48226.
h)Taxation
The Company accounts for income taxes under the provisions of Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 740, “Income Taxes”. Under ASC 740, income taxes are accounted for under the asset and liability method. Deferred taxes are determined based upon differences between the financial reporting and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period of change. A valuation allowance is provided on deferred tax assets to the extent that it is more likely than not that such deferred tax assets will not be realized. The total income tax provision includes current tax expenses under applicable tax regulations and the change in the balance of deferred tax assets and liabilities. The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on technical merits. Income tax provisions must meet a more likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods.
i)Basic and Diluted Net Earnings (Loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 205-10, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive and is not presented in the accompanying statements.
j)Fair value of Financial Instruments
The carrying value of the Company’s financial instruments, including cash, amounts due to shareholders/related parties and accounts and other payables approximate their respective fair values due to the immediate or short-term maturity of these instruments.
It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments.
k)Concentration of Credit Risk
Financial instruments that potentially expose the Company to significant concentrations of credit risk consist principally of cash. The Company places its cash with financial institutions with high-credit ratings.
l)Stock-Based Compensation
The Company has adopted FASB Accounting Standards Codification Topic 718-10, “Compensation- Stock Compensation” (“ASC 718-10”) which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors. Under the fair value recognition provisions of ASC 718-10, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the vesting period.
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.
m)Recent Accounting Pronouncements
The Company has evaluated recent pronouncements through Accounting Standards Updates “ASU” 2013-05 and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows.
Note 3 - Going Concern
The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. The Company had minor revenue during the periods presented and has an accumulated deficit of $4,514,336 recorded by the Company prior to April 1, 2010 and an accumulated deficit since entry into the development stage (April 1, 2010) of $6,367,325. Our ability to continue as a going concern is dependent upon the creation of profitable operations. The Company has operated principally with the assistance of interest free loan advances from its major shareholder, Blue Atelier, Inc. We also intend to use other borrowings and security sales to mitigate the effects of our cash position, however, no assurance can be given that debt or equity financing, if and when required, will be available. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Note 4 - Related Party Transactions
The Company records transactions of commercial substance with related parties at fair value as determined with management. Amounts due to shareholders/related parties are non-interest bearing, unsecured, and due upon demand.
The following is a list of related party balances as of December 31, 2012 and December 31, 2011:
The accounts payable related party balance include amounts due to the officers and directors of the Company Joe Durant, Gerry Shirren and Frank O' Donnell.
Eworld Corp Promissory Note
On November 2, 2011, the Company received funding pursuant to a convertible promissory note in the amount of $65,500. The promissory note is unsecured, bears interest at 20% per annum, and was due on November 21, 2011 and is currently in default. On June 21, 2012, the note holder waived all interest related to the note.
Blue Atleier Convertible Note
On May 21, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $5,000. The promissory note is unsecured, bears interest at 10% per annum, and was due on June 30, 2012 and is currently in default. The note holder may convert the entire note and any accrued interest at $0.001 per share.
The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $5,000. The aggregate beneficial conversion feature has been accreted and charged to financing expense in the amount of $5,000 as of December 31, 2012.
Related party transactions include executive and directors compensation consultancy fee charges for the years ending December 31, 2012 and 2011.
On April 17, 2012, the Board approved the issue of common stock as a bonus incentive to company management with the issue of 5,200,000 shares of common stock to each of CEO Joe DuRant and Executive Vice President Business Development Frank O Donnell and 2,600,000 shares of common stock to CFO Gerry Shirren totaling in value of $3,315,000 which is included in executive and directors compensation totaling $3,526,970. The stock issued reflects the effect of the stock dividend/forward split.
Note 5 Spin-out of E World Corp and Share Dividend
By way of an assignment agreement between E World Corp and Green Energy Renewable Solutions, a number of agreements, letters of intent and various rights and any obligations relating to these rights held by Green Energy Renewable Solutions, Inc. were assigned to and accepted by E World Corp. In addition, Media and Technology Solutions, Inc. became a wholly owned subsidiary of E World Corp. with the transfer of stock held by Green Energy Renewable Solutions Inc. to E World Corp. In an additional agreement between Green Energy Renewable Solutions, Inc. and E World Corp, E World Corp. assumed all the liabilities held by Green Energy Renewable Solutions, Inc. to various related parties and shareholders in return for full payment and a balancing payable amount due to E World Corp which will remain between the companies as an unsecured debt without interest.
These transactions were to facilitate the agreement entered into between Green Energy Renewable Solutions, Inc. and Green Renewable Energy Solutions, Inc. on August, 27, 2011 which was subsequently cancelled and replaced by a new agreement on September 17, 2011 (see Note 6).
E World Corp. completed a forward split of its common stock of 5 to 1 following which, E World Corp. had 9,252,526 shares outstanding, the same amount of stock outstanding of Green Energy Renewable Solutions, Inc. on January 31, 2012 to allow for the share dividend of one share in E World Corp for each Green Energy Renewable Solutions share held on that date.
Effective January 31, 2012, the spin-out of E World Corp was completed with the share distribution of 9,252,526 shares of E World Corp common stock. The effect on Green Energy Renewable Solutions Balance sheet is set forth below and the book value of E World Corp’s net assets (liabilities) on the date of the spin-out was $(259,028).
As the net book value of E World Corp net assets was negative, the impact on the Green Energy Renewable Solutions balance sheet was in increase in additional paid-in capital of $259,028.
Since the shareholders of Green Energy Renewable Solutions are also the shareholders of E World Corp. the spin-out transaction was recorded based on accounting for entities under common control.
The consolidated statement of operations for the year ended December 31, 2012 includes E World Corp and its subsidiaries for the period from January 1, 2012 to January 31, 2012. The consolidated statement of operations includes the following relating to E World Corp:
As of December 31, 2012 amounts owed by the Company to E World Corp totaled $201,662
Note 6 - Asset Purchase Agreement with Green Renewable Energy Solutions
On September 17, 2011, Green Energy Renewable Solutions, Inc. (“the “Company”) entered into a letter of intent (the “LOI”) with Green Renewable Energy Solutions, Inc. (“GRES”) the purpose of which was to cancel the Binding Letter of Intent entered into between the Parties on July 27, 2011 and to replace this with a new agreement. The effect of the Letter of Intent was completed with the execution of the Asset Purchase Agreement executed on February 4, 2012 following the completion on the reverse split and spin out set out in the Letter of Intent.
The Letter of Intent agreement is summarized below:
i.
The Company will acquire the assets of GRES including contracts entered into by GRES with regard to the acceptance, processing and disposal of construction and demolition waste dated May 19, 2011 and Municipal Solid Waste agreement dated September 7, 2011 and other agreements relating to the financing of energy and waste disposal projects.
ii.
The Company will change its name immediately to Green Energy Renewable Solutions Inc.
iii.
The consideration for the acquisition of GRES will be the issue of new common stock of the Company such that on completion of the issue, the existing shareholders of both the Company and GRES will own the Company in equal amount.
iv.
The board of the Company will change with immediate effect to reflect this 50/50 ownership and Joe DuRant will be appointed as Chief Executive Officer of the Company.
v.
Prior to the completion of the transaction and the issue of the Company’s stock consideration, the Company will spin-out its wholly owned subsidiaries, Media and Technology Solutions, Inc. and E World Corp as independent public companies. E World Corp will retain the ownership of the E World name, websites and all existing agreements, licenses and projects in development other than the project being developed by GRES.
vi.
On February 4, 2012 the Company executed the Asset Purchase Agreement and completed the purchase of the assets of Green Renewable Energy Solutions, Inc., namely the contracts and agreements referred to in (i) above, for 9,209,344 common shares of Green Energy Renewable Solutions, Inc. and a further 4,604,666 common shares of deferred consideration.
In a clarification and amendment to the LOI dated September 17, 2011 and the Green Renewable Energy Solutions, Inc. Asset Purchase Agreement, the Parties agreed as follows:
1.Capital Structure:
That the capital structure on a 50/50 basis will be based on the ownership of Blue Atelier as the company controlling shareholder and exclude the non-related parties shareholding and the public float.
2.Temporary adjustment to the Capital Structure:
In recognition of the fact that E World Corp has provided and continues to provide funding to cover a number of expenses relating to the operation of the company and that Green Renewable Energy Solutions Inc. has not contributed proportionately to these expenses a temporary adjustment will be made to the 50/50 capital structure outlined above. The Parties agree that until amount funded for expense items is repaid in full to E World Corp and /or Blue Atelier as the provider of these funds and the new company operation achieves the “pro forma‟ projections, the Capital Structure will be on a 60/40 basis with the E World controlling shareholders and not the 50/50 as set out in 1 above. The adjustment in the capital structure outlined above resulted in the deferred consideration of 2,303,333 shares.
Asset Purchase Agreement: The Asset Purchase Agreement was completed on February 04, 2012 and the assets purchased consisted principally of certain contracts for the supply of waste and waste technology support and the consideration in respect of the asset purchase was the share issue set out below:
1.Consideration: The purchase consideration was as follows
(i)Four million, six hundred and four thousand, six hundred and sixty seven shares (4,604,667) of Green Energy Renewable Energy common stock and
(ii)Two million, three hundred and two thousand, three hundred and thirty three shares (2,302,333) of deferred consideration (the “Further Deferred Consideration”) which is payable when amounts advances for expense items is repaid in full to E World Corp and or Blue Atelier as the provider of these funds and the new company operation achieves the Year 1 “pro forma‟ projections, as set out in the Clarification of the Letter of Intent dated October 26, 2011, As of December 31, 2012. E World Corp and/or Bllue Atelier has not been repaid and the new Company has not achieved the projections none of the deferred consideration is payable.
2.The assets purchased consisted of a number of contracts as follows:
(i)Green Renewable Energy Solutions Inc. and Disposal Specialities LLC dated May 19, 2011 for the Acceptance, Processing and Disposal of Construction Waste
(ii)Green Renewable Energy Solutions Inc. and Disposal Specialities LLC dated September 07, 2011 for the Acceptance, Processing and Disposal of Construction Waste
(iii)Agreement to co-operate between Green Renewable Energy Solutions Inc. and Foton Technologies LLC dated March 21, 2011
Foton Technologies LLC gave notice of termination of the Agreement to co-operate on June 5, 2012. As of December 31, 2012, the proposed funding of the Highland Park waste conversion and recycling project is in progress and as the outcome of this is uncertain at this time, the value attributed to the intangible assets acquired has been fully impaired with a charge of $690,700 during the year ended December 31, 2012.
Note 7 - Waste Project Expense
The Company incurred expenses totaling $182,448 during the one year period ending December 31, 2012 in the development of its waste diversion projects in Highland Park, Michigan and at the Yabucoa landfill project in Puerto Rico. These expenses included professional fees, lease payments, utilities, and insurance.
Highland Park, Michigan: The initial construction and demolition waste processing was planned for a 15 acre site at Highland Park, Michigan where the company acquired a parcel of real estate at Lincoln Ave. Highland Park, MI in November 2011 and leased further real estate with an option to purchase. The Company is now exploring alternative locations for the Highland Park location which is now deemed unsuitable for environmental reasons following a fire in a derelict building on the real estate parcel which the Company had leased.
Yabucoa Landfill, Puerto Rico: Together with its partner Landfill Solutions Corporation, the Company is planning to remediate and manage the Yabucoa municipal landfill that has been closed since 2011. The remediation plan is designed to bring the landfill up to current operating standards and reopen the landfill for operations while developing recycling and waste conversion facilities. The parties have jointly commenced detailed environmental studies and preparation of development plans for full permitting of the landfill remediation works and the waste diversion program. Once operational, the project will accept and process 500 tons per day of MSW under the four long term municipal contracts at a rate starting at $17 per ton and escalating to $35 per ton after 5 years. The eventual outcome of these developments remains uncertain until the permitting process is completed and project completion funding is in place. This process is currently underway and until it reaches a satisfactory conclusion, the Company has decided to expense all cost related to these projects.
Note 8 - Operating Lease Commitments
The Company currently leases office space on a month to month basis at its head office at 243 W. Congress, Suite 350, Detroit, Michigan 48226. The company has agreed to purchase real estate at Highland Park, Michigan, 48203 and pending closure of the purchase, the company is leasing the real estate on a month to month basis.
Note 9 - Convertible Notes
Asher Enterprises Promissory Note I July 10, 2012
On July 10, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $32,500, which consisted of $30,000 in cash proceeds and a $2,500 discount related to in legal cost associated with the note. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 12, 2013. During the year period ended December 31, 2012 the Company accrued $1,239 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading immediately prior to conversion date".
The conversion feature related to this note has been accounted for as an original issue discount totalling $24,946. As of December 31, 2012 the convertible note payable totalling $49,131 was recorded net of unamortized debt discount and accrued interest discount of $8,316.
Asher Enterprises Promissory Note II August 28, 2012
On August 28, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $32,500. which consisted of $30,000 in cash proceeds and a $2,500 discount related to in legal cost associated with the note. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 30, 2013. During the year period ended December 31, 2012 the Company accrued $890 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date".
The conversion feature related to this note has been accounted for as an original issue discount totalling $24,947. As of December 31, 2012 the convertible note payable totalling $43,589 was recorded net of unamortized debt discount and accrued interest of $13,857.
Asher Enterprises Promissory Note III October 12, 2012
On October 12, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $27,500, which consisted of $25,000 in cash proceeds and a $2,500 discount related to in legal cost associated with the note. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 16, 2013. During the year period ended December 31, 2012 the Company accrued $482 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date".
The conversion feature related to this note has been accounted for as an original issue discount totalling $21,109. As of December 31, 2012 the convertible note payable totalling $34,536 was recorded net of unamortized debt discount and accrued interest of $14,073.
Asher Enterprises Promissory Note IV November 29, 2012
On November 29, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $27,500. which consisted of $25,000 in cash proceeds and a $2,500 discount related to in legal cost associated with the note. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 3, 2013. During the year period ended December 31, 2012 the Company accrued $193 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date".
The conversion feature related to this note has been accounted for as an original issue discount totalling $21,109. As of December 31, 2012 the convertible note payable totalling $29,845 was recorded net of unamortized debt discount and accrued interest of $18,764.
JMJ Financial Promissory Note IV October 21, 2012
On October 21, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $35,000. The promissory note is unsecured, bears interest at 5% per annum, and matures on September 30, 2013. During the year period ended December 31, 2012 the Company accrued $292 in interest expense.
The note may be converted at the option of the holder into Common stock of the Company. The conversion price is 58% of the market price, where market price defined as "the average of the lowest three of the last ten closing trading prices on the OTCBB or applicable trading market immediately prior to conversion date".
The conversion feature related to this note has been accounted for as an original issue discount totalling $29,141. As of December 31, 2012 the convertible note payable totalling $40,721 was recorded net of unamortized debt discount and accrued interest of $23,420.
As of December 31, 2012, the Company has reserved a total of 18,826,000 shares of common stock for the potential conversion the above promissory notes.
Note 10 - Income Taxes
The Company provides for income taxes under FASB ASC 740, Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.
FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is $655,758 ($117,811 in 2011) which is calculated by multiplying a 35% estimated tax rate by the cumulative NOL of $1,873,594. The total valuation allowance is $655,758 ($113,611 in 2011). Details for the last two periods follow:
At December 31, 2012, the company had available unused federal operating loss carry forwards of approximately $6,613,265 ($1,739,671 in 2011) for federal taxes that may provide future tax benefits, expiring between 2021 and 2032.
Note 11 - Stockholders' Equity
As of December 31, 2012, the Company had 150,000,000 shares of common stock authorized at a par value of $0.001 and 5,000,000 shares of no par preferred stock.
Other Stock Issues
On May 25, 2010, the Company issued 4,000,000 of newly authorized and issued common stock for the acquisition of 100% of the outstanding stock of Media and Technology Solutions, Inc. in accordance with the stock purchase agreement with the shareholders. Blue Atelier, Inc. was at the time of the acquisition, the 95% shareholder of Media and Technology Solutions, Inc.
On July 08, 2010, the Company issued 4,000 of newly authorized and issued common stock for services of $150.
On February 1, 2011 Media and Technology, a wholly owned subsidiary issued 3,800,000 shares of newly authorized and issued common stock for $950 cash and 200,000 shares of newly authorized and issued common stock for services of $50.
On October 4, 2011, the Company issued 1,200,000 shares of newly authorized and issued common stock for $150,000 cash.
On January 26, 2012, FINRA approved the 5 to 1 reverse stock split of our issued and outstanding common stock. The stock split has been retroactively applied to these financial statements resulting in a decrease in the number of shares of common stock outstanding with a corresponding increase in additional paid-in capital. All shares amounts have been retroactively restated to reflect this reverse stock split.
On April 3, 2012, the Company settled accounts payable totaling $131,878 of amounts outstanding since 2009. On April 19, 2012, the accounts payable totaling $121,878 were settled through the issuance of 13,000,000 shares of common stock. On the date of settlement the closing price of the Company’s common stock was $0.10 per share, resulting in a loss on settlement of $518,122 during the year ended December 31, 2012.
On April 17, 2012 , the Board of Directors of the Company approved the issuance of 13,000,000 shares of restricted common stock to key executives and directors of the Company as a bonus incentive.
On June 27, 2012 the Company announced that its Board of Directors approved a one share for one share stock dividend of the Company’s common stock, regarding this as an effective forward split. Each shareholder of record at the close of business on June 29, 2012 received one additional share for every outstanding share held on the record date. The Articles were amended to reflect this on July 16, 2012 and this received FINRA approval on July 27, 2012. All share amounts in the Financial Statements have been restated to reflect the dividend share/forward split.
The stock issued reflects the effect of the stock dividend/forward split.
Stock issued during the year ended December 31, 2012 was valued at the closing market price of the shares on either the date approved by the Board of Directors, the date of settlement, or the date the services have been deemed rendered.
Please see below for an outline of all shares issuances during the year ended December 31, 2012.
The stock issued reflects the effect of the stock dividend/forward split.
As of December 31, 2012 and December 31, 2011, the Company had 62,636,850 and 18,505,052 (9,252,526 shares prior to the stock dividend/forward split) shares of common stock outstanding respectively.
The number of shares issues referred to in Note 11 here show the retroactive application of stock splitsStock Payable
On June 27, 2012, the Company entered into a stock purchase agreement with Diamond Transport Ltd. under which the company will sell one million shares of common stock at $0.50 per share with a closing of the sale on or before July 15, 2012 with $100,000 to be received as an advance payment on July 05, 2012. The advance payment of $100,000 was received on July 20, 2012 and a further $50,000 received on August 20, 2012 and the closing date of the transaction will be upon receipt of the outstanding balance of $350,000. As of December 31, 2012, the shares have not been issued, and as such the Company has recorded $150,000 as stock payable.
On August 14, 2012, the Company entered into 6 month professional services agreement, where the Company pays the consultant $5,000 cash and $5,000 worth of common stock each month. As of December 31, 2012, the Company has recorded $20,000 in stock payable related to this contract.
On July 1, 2012, the Company entered into a nine month professional services agreement, where the Company pays the consultant 250,000 share of common stock. As of December 31, 2012, the Company is liable for 120,000 shares of common stock valued at $6,612.
On November 1, 2012, the Company entered into a professional services agreement, where the Company agreed to pay the consultant $50,000 work of the Company's common stock. As of December 31, 2012, the no shares have been issued and the entire liability has been recorded as stock payable.
On September 20, 2012, the Company entered into a employment agreement were the Company agreed to issue 50,000 shares of common stock valued at $6,995 as a commencement bonus. As of December 31, 2012, the no shares have been issued and the entire liability has been recorded as stock payable.
Note 11 - Subsequent Events
Pursuant to the Asher Enterprises Promissory Note I July 10, 2012 (as described in Note 9) the balance of the note and accrued interest was converted to 1,153,846 shares of common stock as of January 22, 2013.
Pursuant to the Asher Enterprises Promissory Note I July 10, 2012 (as described in Note 9) $12,000.00 in principal was converted to 1,188,119 shares of common stock as of February 11, 2013.
Pursuant to the Asher Enterprises Promissory Note I July 10, 2012 (as described in Note 9) $5,500.00 in principal and $1,300.00 in accrued interest was converted to 1,000,000 shares of common stock as of February 25, 2013.
Pursuant to the Asher Enterprises Promissory Note II August 28, 2012 (as described in Note 9) $11,500.00 in principal was converted to 3,108,108 shares of common stock as of March 12, 2013.
Pursuant to the Asher Enterprises Promissory Note II August 28, 2012 (as described in Note 9) $7,100.00 in principal was converted to 3,086,957 shares of common stock as of March 27, 2013.
Management hired a full time Chief Financial Officer, Mr. Roger Silverthorn, as of February 1, 2013. His past experience as a CPA, auditor, and CEO of a renewable energy company with multiple locations both domestic and foreign, provides a valuable reference for implementing practical financial controls and building a financial framework for the Company. Mr. Silverthorn’ salary is $125,000 annually effective February 1, 2013.
On January 1, 2013 Mr. Durant and Mr. O Donnell became employees of the Company. Mr. Durant’s annual compensation was increased to $125,000 annually effective January 1, 2013.
ITEM 9.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements between the Company and its independent accountants on any matter of accounting principles or practices or financial statement disclosure. On August 9, 2010 the Board of Directors approved the engagement of De Joya Griffith and De Joya Griffith has continued as its independent registered public accounting firm since that date.
ITEM 9A.
ITEM 9A.CONTROLS AND PROCEDURES
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2012. This evaluation was carried out under the supervision of Chief Financial Officer, Roger Silverthorn. Based upon that evaluation, Principal Financial Officer concluded that, as of December 31, 2011, our disclosure controls and procedures were not effective.
We performed analysis and other post-closing procedures to ensure that our financial statements are prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations, changes in stockholders’ deficit and cash flows for the periods presented.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure. Such disclosure controls and procedures are limited in their effect by the limitation of the numbers of staff available to allow for the desirable level of division of responsibilities and oversight of the controls and procedures.
A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Our control system 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. Our internal control over financial reporting includes those policies and procedures that:
1.Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets;
2.Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles; that receipts and expenditures are being made only with proper authorizations of management and directors; and
3.Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5) or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. The effectiveness of these safeguards, procedures and controls are limited in their effectiveness by the limitation of division of responsibility and oversight in these procedures.
Management, including our President acting as principal executive officer and our principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Over Financial Reporting - Guidance for Smaller Public Companies published in June of 2006 and the PCAOB preliminary staff views published October 17, 2007. Based on our assessment and those criteria, management concluded that during the period covered by this report, our internal control and procedures over financial reporting were not effective as of December 31, 2012.
Material Weaknesses
1.The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012. In making this assessment, the Company’s management used the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control - Integrated Framework.” Based on this assessment, management concluded that, as of December 31, 2012, the Company’s internal control over financial reporting was not effective based on this framework.
Management evaluated the impact of ineffective control over financial reporting and concluded that the control deficiency represented a material weakness.
Management has hired a full time Chief Financial Officer as of February 1, 2013. His duties will include correcting the areas of deficiency in financial controls. His past experience as a CPA, auditor, and CEO of a renewable energy company with multiple locations both domestic and foreign, provides a valuable reference for implementing practical financial controls and building a financial framework for the Company. Consolidating financial operations to a central location will provide a first step in that process.
Attestation Report of the Registered Public Accounting Firm
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 our 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.
Inherent Limitations on the Effectiveness of Controls
Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
ITEM 9B.
ITEM 9B. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART III
ITEM 10.
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors, Executive Officers and Corporate Governance
The directors and officers are as follows:
Name
Age
Position
Tenure
Joe DuRant
President, CEO, Director
August 2011 to present
Gerry Shirren
Director
October 2009 to January 2012
Frank O Donnell
Exec VP Business Development, Director,
August 2011 to present
Dan Garman
Director
August 2011 to present
Roger Silverthorn
Secretary, CFO
February 2013 to present
Mr. DuRant has been an entrepreneur and business consultant for the past 25 years. He has gained considerable experience in structuring, developing, operating and financing start-up and early stage development companies. He has successfully launched three start-up companies including one that went public on NASDAQ. Mr. DuRant has secured start up and operating capital through private and public equity and debt instruments. He is currently working with strategic technology developers and manufacturers to achieve the commercial deployment of new biomass gasification technology systems to produce waste to energy electricity and fuel production. Strategic alliances with technology manufacturers representing widely deployed technologies and new cutting edge waste to energy technologies are expected to provide a significant advantage to GRES in selecting the most efficient operating systems specific to each location.
Mr. Shirren resigned from the Board of Directors on January 28, 2012
Mr O Donnell founded Universal Electronics Inc. which went public in '93 and has sold over 200 million universal remotes. Mr. O'Donnell was responsible for the establishment of the universal remote control in the cable television and satellite industries with companies like Motorola, Scientific Atlanta, Time Warner Cable and Comcast. Mr. O’Donnell is also involved as founder of companies developing proprietary battery technology and is developing a full range of electric vehicles, re-charging stations and other smart-grid interfaces and services.
Mr. Garman has been engaged as the lead recycling broker for Green Solutions and a broker in the waste and recycling industry. Mr. Garman has been brokering for waste and recycling providers in Michigan since April 1st, 2002 and is currently servicing over 40 million annually in government contracts and over 10 million in private industry.
Mr Silverthorn has over 28 years of experience in the renewable energy business and power plant owner and operator of eight solid fuel biomass power plants in two countries and several states. He led the development of a vertically integrated fuel system in appropriate jurisdictions. Mr. Silverthorn also developed a renewable energy marketing company, among the first in the United States. He was an early entrant to the renewable energy business when renewable power generation was in its infancy. His background as a CPA in public accounting has been invaluable to his success.
The directors shall be elected at an annual meeting of the stockholders and except as otherwise provided within the Bylaws of Green Energy Renewable Solutions, Inc., as pertaining to vacancies, shall hold office until his successor is elected and qualified.
The directors of Green Energy Renewable Solutions, Inc. are aware of no petitions or receivership actions having been filed or court appointed as to the business activities, officers, directors, or key personnel of Green Energy Renewable Solutions, Inc.
There are no familial relationships among the officers and directors, nor are there any arrangements or understanding between any of our directors or officers or any other person pursuant to which any officer or director was or is to be selected as an officer or director.
No non-compete or non-disclosure agreements exist between the management of Green Energy Renewable Solutions, Inc. and any prior or current employer.
There are no employees under contract with Green Energy Renewable Solutions, Inc.
Green Energy Renewable Solutions, Inc. has not, nor proposes to do so in the future, make loans to any of its officers, directors, key personnel, 10% stockholders, relatives thereof, or controllable entities.
Board of Director Meetings and Committees
The Board of Directors held no formal meetings during the year ended December 31, 2012. The board has conducted board activities through unanimous consent board resolutions in lieu of meetings. The directors received no compensation for their role as directors for the year ended December 31, 2012.
The board has not defined any committees and performs all functions that would be delegated.
Code of Ethics
The board of directors of Green Energy Renewable Solutions, Inc. has not adopted a written Code of Ethics. The board of directors believes our current business conduct and ethics promote honest and ethical conduct, handling of conflicts which may arise, timely and complete reporting and disclosure compliance with the Securities and Exchange Commission, compliance with all applicable governing laws, and accountability for our conduct.
The Company is currently managed by a sole officer and director. The company intends to adopt a written code of ethics as soon as the executive management and Board of Directors is expanded.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the company’s directors and officers, and persons who own more than ten-percent (10%) of the company’s common stock, to file with the Securities and Exchange Commission reports of ownership on Form 3 and reports of change in ownership on Forms 4 and 5. Such officers, directors and ten-percent stockholders are also required to furnish the company with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such forms received by the company and on written representations from certain reporting persons, the company believes that all Section 16(a) reports applicable to its officers, directors and ten-percent stockholders were filed with respect to the fiscal year ended December 31, 2012.
CERTAIN LEGAL PROCEEDINGS
No director, nominee for director, or executive officer has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.
ITEM 11.
ITEM 11.EXECUTIVE COMPENSATION
Summary Compensation Table
Notes:
We had no pension plans or plans or agreements which provide compensation on the event of termination of employment or change in control of us and have therefore eliminated a column specified by Item 402 (c)(2) titled “Change in Pension Value and Nonqualified Deferred Compensation Earnings (h)” in the above Summary Compensation Table No family relationships exist among any directors, executive officers, or persons nominated or chosen to become directors or executive officers. As of December 31, 2012, Green Energy Renewable Solutions, Inc. has no group life, health, hospitalization or medical plans available for its employees. Further, Green Energy Renewable Solutions, Inc. had no pension plans or plans or agreements which provide compensation on the event of termination of employment or change in control of us.
Employment Agreements
As of the year ended December 31, 2012, Green Energy Renewable Solutions, Inc. has not entered into formal employment agreements with any of our executive officers or directors. Until a formal employment agreement is put in place, Mr. Shirren is accepting compensation at a rate of $5,000 per month up until September 30. Effective November 14, 2012, he resigned as CFO of the company and received no additional compensation. Mr. DuRant is accruing salary at the rate of $5,500 per month for 2012 and Mr. O Donnell was accruing salary $5,000 per month to the present. Mr. Durant’s annual compensation was increased to $125,000 annually effective January 1, 2013. Mr. Silverthorn’ salary is $125,000 annually effective February 1, 2013. Cash payments are made based on the Company’s ability to pay.
Compensation of Directors
Green Energy Renewable Solutions paid no compensation to any directors as director’s fees, nor any fees for attendance or similar remuneration or reimbursement for any out-of-pocket business expenses incurred, for the year ended December 31, 2012.
ITEM 12.
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 2012; the beneficial ownership of Green Energy Renewable Solutions, Inc. common stock by each person known to the company to beneficially own more than five percent (5%) of the company’s common stock, including options, outstanding as of such date and by the officers and directors of the company as a group. Except as otherwise indicated, all shares are owned directly:
Common Stock
There were no options or warrants outstanding at December 31, 2012.
Total shares outstanding as of December 31, 2012 were 62,626,850 held by approximately 79 shareholders of record and an undetermined number of holders in street name. All ownership is beneficial and of record except as specifically indicated otherwise. Beneficial owners listed above have sole voting and investment power with respect to the shares shown unless otherwise indicated.
Frank O Donnell, Director of the Company is the controlling shareholder of Blue Atelier, Inc.
On September 17, 2011 E World Interactive entered into a letter of intent (the “LOI”) with Green Renewable Energy Solutions, Inc. (“GRES”) the purpose of which to acquire the assets of GRES which included certain contracts for the acceptance, processing and disposal of construction and demolition waste and as part of this agreement, E World changed its name to Green Energy Renewable Solutions (“Green Energy Renewable Solutions” or “GERS”), effective December 12, 2011. As part of this LOI, Green Energy Renewable Solutions f/k/a E World would complete a 5 to 1 reverse split, spin out its subsidiary company E World Corp and Media and Technology Solutions, Inc. and complete the transaction with the issue of stock for the purchase of the assets of Green Renewable Energy Solutions, Inc.
Arising from the Letter of Intent entered into on September 17, Green Energy Renewable Solutions, Inc. (F/K/A E World Interactive, Inc.) executed the Asset Purchase Agreement with Green Renewable Energy Solutions, Inc. and issued 4,604,667 common shares of Green Energy Renewable Solutions, Inc. F/K/A E World Interactive, Inc. and a further 2,302,333 common shares of deferred consideration.
Joe DuRant, the President, CEO and Director of the Company, is the controlling shareholder of Green Renewable Energy Solutions, Inc.
ITEM 13.
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Director Independence/Audit Committee
The board of directors of Green Energy Renewable Solutions, Inc. has determined that for the purpose of and pursuant to the instructions of item 401(e) of regulation S-B titled Audit Committee Financial Expert, Inc. Green Energy Renewable Solutions, Inc. does not have a designated Audit Committee and relies on the board of directors to perform those functions. Joe DuRant, Frank O Donnell or Gerry Shirren are not independent as defined by item 401(e)(ii) of regulation S-B.
Related Party Transactions
The Company records transactions of commercial substance with related parties at fair value as determined with management. Amounts due to shareholders/related parties are non-interest bearing, unsecured, and due upon demand.
The following is a list of related party balances as of December 31, 2012 and December 31, 2011:
The accounts payable related party balance include amounts to the officers and directors of the Company Joe Durant, Gerry Shirren and Frank O' Donnell.
Eworld Corp Promissory Note
On November 2, 2011, the Company received funding pursuant to a convertible promissory note in the amount of $65,500. The promissory note is unsecured, bears interest at 20% per annum, and was due on November 21, 2011 and is currently in default. On June 21, 2012, the note holder waived all interest related to the note.
Blue Atleier Convertible Note
On May 21, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $5,000. The promissory note is unsecured, bears interest at 10% per annum, and was due on June 30, 2012 and is currently in default. The note holder may convert the entire note and any accrued interest at $0.001 per share.
The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $5,000. The aggregate beneficial conversion feature has been accreted and charged to financing expense in the amount of $5,000 as of December 31, 2012.
Related party transactions include executive and directors compensation consultancy fee charges for the years ending December 31, 2012 and 2011.
On April 17, 2012, the Board approved the issue of common stock as a bonus incentive to company management with the issue of 5,200,000 shares of common stock to each of CEO Joe DuRant and Executive Vice President Business Development Frank O Donnell and 2,600,000 shares of common stock to CFO Gerry Shirren totaling in value of $3,315,000 which is included in executive and directors compensation totaling $3,526,970. The stock issued reflects the effect of the stock dividend/forward split.
PART IV
ITEM 14.
ITEM 14.EXHIBITS AND REPORTS ON FORM 8-K
Green Energy Renewable Solutions, Inc. includes by reference the following exhibits:
Green Energy Renewable Solutions, Inc. includes herewith the following exhibits:
ITEM 15.
ITEM 15.PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements and review of financial statements included in the registrant's Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ending December 31, 2011 and 2012 were: $18,100 and $21,137 respectively.
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant's financial statements and are not reported under item (1) for the fiscal years ending December 31, 2011 and 2012 were: $ 0 and $ 0, respectively.
(3) Tax Fees
No aggregate fees were billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning for the fiscal years ending December 31, 2011 and 2012.
(4) All Other Fees
No aggregate fees were billed for professional services provided by the principal accountant, other than the services reported in items (1) through (3) for the fiscal years ending December 31, 2011 and 2012.
(5) Audit Committee
The registrant's Audit Committee, or officers performing such functions of the Audit Committee, have approved the principal accountant's performance of services for the audit of the registrant's annual financial statements and review of financial statements included in the registrant's Form 10-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal year ending December 31, 2012. Audit-related fees, tax fees, and all other fees, if any, were approved by the Audit Committee or officers performing such functions of the Audit Committee.
(6) Work Performance by Others
The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than 0 percent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Pursuant to the requirements of the Securities and 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(s)
Date
/s/ Roger Silverthorn
Secretary and Director
April 16, 2013
Roger Silverthorn
(Secretary)
/s/ Roger Silverthorn
Principal Financial and Accounting Officer
April 16, 2013
Roger Silverthorn
(Principal Financial and Accounting Officer)