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EX-99.2 - EXHIBIT 99.2 - GREEN ENVIROTECH HOLDINGS CORP. | ex992.htm |
EX-99.1 - EXHIBIT 99.1 - GREEN ENVIROTECH HOLDINGS CORP. | ex991.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): November 20, 2009
WOLFE
CREEK MINING INC.
(Exact
name of registrant as specified in its charter)
Delaware | 333-149626 | 32-0218005 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
114
S. Main Street Suite 201
Fond Du
Lac
WI
54935-4229
(Address
of principal executive offices) (zip code)
(209)
881-3523
(Registrant's
telephone number, including area code)
Andrea
Cantaneo, Esq.
Sichenzia
Ross Friedman Ference LLP
61
Broadway
New York,
New York 10006
Phone:
(212) 930-9700
Fax:
(212) 930-9725
15868 SW
Kimball Ave.
Lake
Oswego, OR
(Former
address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement
On
November 20, 2009, Wolf Creek Mining, Inc., a Delaware corporation (“Wolfe
Creek” or the “Company”), entered into an Agreement and Plan of Merger (the
“Merger Agreement”) with Green EnviroTech Acquisition Corp., a Nevada
corporation and wholly-owned subsidiary of the Company (the “Subsidiary”) and
Green EnviroTech Corp., a Nevada corporation (“Green EnviroTech”).
Pursuant
to the Merger Agreement, on November 20, 2009 (the “Closing Date”), the
Subsidiary merged with and into Green EnviroTech resulting in Green EnviroTech
becoming a wholly-owned subsidiary of the Company (the “Merger”). Pursuant to
the Merger Agreement, the Company issued approximately 3,000,004 shares of its
common stock (the “Acquisition Shares”) to the shareholders of Green EnviroTech,
representing approximately 75% of the issued and outstanding common stock
following the closing of the Merger. Pursuant to the Merger Agreement, the
outstanding shares of common stock of Green EnviroTech were
cancelled.
In
October 2009, Kristen Paul the owner of 3,000,000 shares of the Company’s common
stock sold her shares to Green EnviroTech Corp. which shares are being
cancelled. All share amounts used herein assumes the
cancellation of these shares.
In
connection with the Merger, in addition to the foregoing:
(i)
Effective on the Closing Date, Kristen Paul resigned as the sole officer and
director of the Company and the following executive officers and directors of
Green EnviroTech were appointed as executive officers and directors of the
Company:
Name | Title |
Gary M.
De Laurentiis
Andy
Kegler
|
President, Chief
Executive Officer, Chairman
Chief
Technology Officer
|
(ii) The
Company intends to change its name to Green EnviroTech Corp. or a similar
derivation, as soon as practicable.
Item
2.01 Completion of Acquisition or Disposition of Assets
Information
in response to this Item 2.01 is keyed to the Item numbers of Form
10.
Item
1. Description of Business
Effective
on the Closing Date, pursuant to the Merger Agreement, Green EnviroTech became a
wholly-owned subsidiary of the Company. The acquisition of Green EnviroTech is
treated as a reverse acquisition, and the business of Green EnviroTech became
the business of the Company. At the time of the reverse acquisition, Wolfe Creek
was not engaged in any active business.
References
to “Green EnviroTech”, “we”, “us”, “our” and similar words refer to the Company
and its wholly-owned subsidiary, Green EnviroTech, unless the context otherwise
requires, and prior to the effectiveness of the reverse acquisition, these terms
refer to Green EnviroTech. References to “Wolfe Creek” refer to the
Company and its business prior to the reverse acquisition.
Summary
Green
EnviroTech is a Nevada corporation formed on October 6, 2008 under the name
EnviroPlastics Corporation. On October 21, 2009, Enviroplastics
Corporation changed its name to Green EnviroTech Corp. Wolfe Creek is
a Delaware corporation formed on June 26, 2007.
2
Green
EnviroTech is a plastics recovery, separation, cleaning, and recycling company.
We intend to supply recycled commercial plastics to industries such as the
automotive and consumer products, and plan to construct large-scale plastics
recycling facilities near automotive shredder locations nationwide. Operating
with large national metal recycling partners, the Company, using a
patent-pending processes developed in conjunction with Thar Process, Inc., and
Ergonomy LLC will produce recycled commercial grade plastics ready to
be re-introduced into commerce. In connection with our strategic partners, we
will also convert waste and scrap plastic (both from its own processing and from
other sources) into high-value energy products, including synthetic
oil.
Our
executive offices are located at 114 S Main Street, Suite 201, Fond Du Lac, WI
54935 and our telephone number at such address is 209-881-3523.
RISK
FACTORS
An
investment in the Common Stock involves a high degree of risk. In determining
whether to purchase the Common Stock, an investor should carefully consider all
of the material risks described below, together with the other information
contained in this report before making a decision to purchase the Company’s
securities. An investor should only purchase the Company’s securities if he or
she can afford to suffer the loss of his or her entire investment.
Risks
Related to our Business
We
are not currently profitable and may never become profitable.
We have a history of losses totaling
$274,976 through September 30, 2009 and we expect to incur additional
substantial operating losses for the foreseeable future and we may never achieve
or maintain profitability. We also expect to experience negative cash
flow for the foreseeable future as we fund our operating losses and capital
expenditures. As a result, we will need to generate significant revenues in
order to achieve and maintain profitability. We may not be able to
generate these revenues or achieve profitability in the future. Our failure to
achieve or maintain profitability could negatively impact the value of our
Common Stock and investors would in all likelihood lose their entire
investment.
Our
independent registered auditors have expressed doubt about our ability to
continue as a going concern.
Because we have not generated
significant revenue since our inception, our auditors included in their report
for the year ended December 31, 2008, an emphasis of matter paragraph in its
independent auditors’ report stating that there is significant doubt about the
Company’s ability to continue as a going concern.
Our
business is difficult to evaluate because we have no operating history and an
uncertain future.
We have no operating history upon which
you can evaluate our present business and future prospects. We face
risks and uncertainties relating to our ability to implement our business plan
successfully. Our operations are subject to all of the risks inherent
in the establishment of a new business enterprise generally. The
likelihood of our success must be considered in light of the problems, expenses,
difficulties, complications and delays frequently encountered in connection with
the formation of a new business, the commencement of operations and the
competitive environment in which we operate. If we are unsuccessful
in addressing these risks and uncertainties, our business, results of
operations, financial condition and prospects will be materially
harmed.
We
will need significant additional capital, which we may be unable to
obtain.
As of September 30, 2009, we had no
cash available. We also expect to experience negative cash flow for the
forseeable future as we fund our operating losses and capital
expenditures. Accordingly we need significant additional capital to
fund our operations. There can be no assurance that financing will be available
in amounts or on terms acceptable to us, if at all. If we are unable
to raise substantial capital, investors will lose their entire
investment.
3
If
our strategy is unsuccessful, we will not be profitable and our stockholders
could lose their investment.
We do not believe there are track
records for companies pursuing our strategy, and there is no guarantee that our
strategy will be successful or profitable. If our strategy is unsuccessful, we
will fail to meet our objectives and not realize the revenues or profits from
the business we pursue, which would cause the value of the Company to decrease,
thereby potentially causing in all likelihood, our stockholders to lose their
investment.
Our
business is dependent on a few large suppliers for feedstock and is vulnerable
to changes in availability or supply of such feedstock
We intend to derive our feedstock from
suppliers who are operating large automotive shredders. Any substantial
alteration or termination of our contracts or agreements with those particular
suppliers may have a material adverse effect on our revenue as we may be unable
to run our operation at capacity without a sufficient source of
feedstock.
We
rely on several large customers for our product and are vulnerable to dramatic
shifts in their industry.
We intend
to focus on selling our product to the automotive industry initially, for use in
production of new automobiles. Most of our customers and end users
are subject to budgetary and political constraints which may delay or limit
purchases of our products, and we will have no control over those
decisions.
We
may be unable to successfully execute any of our identified business
opportunities or other business opportunities that we determine to
pursue.
We
currently have a limited corporate infrastructure. In order to pursue business
opportunities, we will need to continue to build our infrastructure and
operational capabilities. Our ability to do any of these successfully could be
affected by any one or more of the following factors:
·
|
our
ability to raise substantial additional capital to fund the implementation
of our business plan;
|
·
|
our
ability to execute our business
strategy;
|
·
|
the
ability of our products and services to achieve market
acceptance;
|
·
|
our
ability to manage the expansion of our operations and any acquisitions we
may make, which could result in increased costs, high employee turnover or
damage to customer relationships;
|
·
|
our
ability to attract and retain qualified
personnel;
|
·
|
our
ability to manage our third party relationships effectively;
and
|
·
|
our
ability to accurately predict and respond to the rapid technological
changes in our industry and the evolving demands of the markets we
serve.
|
Our
failure to adequately address any one or more of the above factors could have a
significant impact on our ability to implement our business plan and our ability
to pursue other opportunities that arise.
If
we are unable to manage our intended growth, our prospects for future
profitability will be adversely affected.
We intend to aggressively expand our
marketing and sales program. Rapid expansion may strain our
managerial, financial and other resources. If we are unable to manage
our growth, our business, operating results and financial condition could be
adversely affected. Our systems, procedures, controls and management
resources also may not be adequate to support our future
operations. We will need to continually improve our operational,
financial and other internal systems to manage our growth effectively, and any
failure to do so may lead to inefficiencies and redundancies, and result in
reduced growth prospects and profitability.
Our insurance policies may be
inadequate in a catastrophic situation and potentially expose us to
unrecoverable risks.
We will have limited commercial
insurance policies. Any significant claims against us would have a
material adverse effect on our business, financial condition and results of
operations. Insurance availability, coverage terms and pricing
continue to vary with market conditions. We endeavor to obtain
appropriate insurance coverage for insurable risks that we identify, however, we
may fail to correctly anticipate or quantify insurable risks, we may not be able
to obtain appropriate insurance coverage, and insurers may not respond as we
intend to cover insurable events that may occur. We have observed
rapidly changing conditions in the insurance markets relating to nearly all
areas of traditional corporate insurance. Such conditions have
resulted in higher premium costs, higher policy deductibles and lower coverage
limits. For some risks, we may not have or maintain insurance
coverage because of cost or availability.
We
may become liable for damages for violations of environmental laws and
regulations.
We are
subject to various environmental laws and regulations enacted in the
jurisdictions in which we operate which govern the manufacture, importation,
handling and disposal of certain materials used in our operations. We are in the
process of establishing procedures to address compliance with current
environmental laws and regulations and we monitor our practices concerning the
handling of environmentally hazardous materials. However, there can be no
assurance that our procedures will prevent environmental damage occurring from
spills of materials handled by the Company or that such damage has not already
occurred. On occasion, substantial liabilities to third parties may be incurred.
We may have the benefit of insurance maintained by the Company; however, the
Company may become liable for damages against which it cannot adequately insure
or against which it may elect not to insure because of high costs or other
reasons.
4
We
face intense competition and may not be able to successfully
compete.
The
Company currently does not have direct competitors in the capacity range we
target. However, there can be no assurance that the Company will not have direct
competition in the future that such competitors will not substantially increase
the resources devoted to the development and marketing of products and services
that compete with those of the Company or that new or existing competitors will
not enter the market in which the Company is active.
We
rely on key personnel and, if we are unable to retain or motivate key personnel
or hire qualified personnel, we may not be able to grow effectively
Our
success depends in large part upon the abilities and continued service of our
executive officers and other key employees, particularly Mr. Gary DeLaurentiis,
our Chief Executive Officer and Andrew Kegler, our Chief Technology
Officer. There can be no assurance that we will be able to retain the
services of such officers and employees. Our failure to retain the
services of our key personnel could have a material adverse effect on the
Company. In order to support our projected growth, we will be
required to effectively recruit, hire, train and retain additional qualified
management personnel. Our inability to attract and retain the
necessary personnel could have a material adverse effect on the
Company. We have no “key man” insurance on any of our key
employees.
Risks
Related to the Common Stock
There
is no trading market for the Common Stock.
The Common Stock is eligible for
quotation on the Over-the-Counter Bulletin Board. However, to date there has
been no trading market for the Common Stock, and we cannot give an assurance
that a trading market will develop. The lack of an active, or any, trading
market will impair a stockholder’s ability to sell his shares at the time he
wishes to sell them or at a price that he considers reasonable. An
inactive market will also impair our ability to raise capital by selling shares
of capital stock and will impair our ability to acquire other companies or
assets by using common stock as consideration.
Stockholders
may have difficulty trading and obtaining quotations for our common
stock.
Our
Common Stock does not trade, and the bid and asked prices for our Common Stock
on the Over-the-Counter Bulletin Board may fluctuate widely in the future. As a
result, investors may find it difficult to dispose of, or to obtain accurate
quotations of the price of, our securities. This severely limits the liquidity
of our Common Stock, and would likely reduce the market price of our Common
Stock and hamper our ability to raise additional capital.
The
market price of our Common Stock is likely to be highly volatile and subject to
wide fluctuations.
Dramatic
fluctuations in the price of our Common Stock may make it difficult to sell our
Common Stock. The market price of our Common Stock is likely to be highly
volatile and could be subject to wide fluctuations in response to a number of
factors that are beyond our control, including:
·
|
dilution
caused by our issuance of additional shares of common stock and other
forms of equity securities, in connection with future capital financings
to fund our operations and growth, to attract and retain valuable
personnel and in connection with future strategic partnerships with other
companies;
|
·
|
variations
in our quarterly operating results;
|
·
|
announcements
that our revenue or income are below or that costs or losses are greater
than analysts’ expectations;
|
·
|
the
general economic slowdown;
|
·
|
sales
of large blocks of our common
stock;
|
·
|
announcements
by us or our competitors of significant contracts, acquisitions, strategic
partnerships, joint ventures or capital commitments;
and
|
·
|
fluctuations
in stock market prices and volumes;
|
These and
other factors are largely beyond our control, and the impact of these risks,
singly or in the aggregate, may result in material adverse changes to the market
price of our Common Stock and/or our results of operations and financial
condition.
The
ownership of our Common Stock is highly concentrated in our
officers.
Based on the 4,0000,004 shares of
Common Stock outstanding as of November 1, 2009 Gary DeLaurentiis our
Chief Executive Officer and Andrew Kegler beneficially own
approximately 34% of our outstanding Common Stock. As a result, Mr. DeLaurentiis
and Mr. Kegler have the ability to exercise control over our business by, among
other items, his voting power with respect to the election of directors and all
other matters requiring action by stockholders. Such concentration of share
ownership may have the effect of discouraging, delaying or preventing, among
other items, a change in control of the Company.
Our
founders received their shares of our Common Stock at a price of $.01 per
share.
Our founders received their shares of
our Common Stock at a price of $.01 per share. The low purchase
price for such shares may make it more likely that the shares will be sold at
lower trading prices. The sale of such shares into the market could have a
depressive effect on the trading price of our Common Stock, if then
traded.
5
The
Common Stock will be subject to the “penny stock” rules of the SEC, which may
make it more difficult for stockholders to sell the Common Stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
·
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
·
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the
broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
·
|
obtain
financial information and investment experience objectives of the person;
and
|
·
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the
transaction.
|
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
The
regulations applicable to penny stocks may severely affect the market liquidity
for the Common Stock and could limit an investor’s ability to sell the Common
Stock in the secondary market.
As
an issuer of “penny stock,” the protection provided by the federal securities
laws relating to forward looking statements does not apply to the
Company.
Although
federal securities laws provide a safe harbor for forward-looking statements
made by a public company that files reports under the federal securities laws,
this safe harbor is not available to issuers of penny stocks. As a result, the
Company will not have the benefit of this safe harbor protection in the event of
any legal action based upon a claim that the material provided by the Company
contained a material misstatement of fact or was misleading in any material
respect because of the Company’s failure to include any statements necessary to
make the statements not misleading. Such an action could hurt our financial
condition.
The
Company has not paid dividends in the past and does not expect to pay dividends
for the foreseeable future. Any return on investment may be limited
to the value of the Common Stock.
No cash
dividends have been paid on the Common Stock. We expect that any income received
from operations will be devoted to our future operations and growth. The Company
does not expect to pay cash dividends in the near future. Payment of dividends
would depend upon our profitability at the time, cash available for those
dividends, and other factors as the Company’s board of directors may consider
relevant. If the Company does not pay dividends, the Common Stock may be less
valuable because a return on an investor’s investment will only occur if the
Company’s stock price appreciates.
6
FORWARD-LOOKING
STATEMENTS
Statements in this current report on
Form 8-K may be “forward-looking statements.” Forward-looking statements
include, but are not limited to, statements that express our intentions,
beliefs, expectations, strategies, predictions or any other statements relating
to our future activities or other future events or conditions. These statements
are based on current expectations, estimates and projections about our business
based, in part, on assumptions made by management. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may, and are likely to, differ materially from what is expressed or
forecasted in the forward-looking statements due to numerous factors, including
those described above and those risks discussed from time to time in this
prospectus, including the risks described under “Risk Factors,” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in this current report and in other documents which we file with the
Securities and Exchange Commission. In addition, such statements could be
affected by risks and uncertainties related to our ability to raise any
financing which we may require for our operations, competition, government
regulations and requirements, pricing and development difficulties, our ability
to make acquisitions and successfully integrate those acquisitions with our
business, as well as general industry and market conditions and growth rates,
and general economic conditions. Any forward-looking statements speak only as of
the date on which they are made, and we do not undertake any obligation to
update any forward-looking statement to reflect events or circumstances after
the date of this current report.
BUSINESS
Overview of Our Business
We are a development stage plastics recovery,
separation, cleaning, and recycling company. We intend to supply recycled
commercial plastics to industries such as the automotive and consumer products
industries, and plan to construct large-scale plastics recycling facilities near
automotive shredder locations nationwide. Operating with large national metal
recycling partners, the Company, using a patent-pending process developed in
conjunction with Thar Process, Inc., will produce recycled commercial grade
plastics ready to be re-introduced into commerce. Additionally,
with other strategic partners, we will convert waste and scrap plastic (both
from its own processing and from other sources) into high-value energy products,
including synthetic oil.
Each
year, millions of tons of automotive shredder residue (“Shredder Residue”)
containing reusable and recyclable plastics are unnecessarily disposed of in
landfills. We believe this is because, while national and global
demand for recycled plastic has increased dramatically over the past decade, the
technology to efficiently and effectively recycle plastic material from this
residue stream has lagged behind. This has resulted in
tremendous waste and created a huge unmet market for recycled commercial
plastics, creating an opportunity for someone with a cost-effective recovery
process.
Green
EnviroTech now has such a process. We were formed in 2008 under the
name EnviroPlastics Corp. and changed our name in October 2009 to
Green EnviroTech Corp. We were formed to capitalize on the growing market to
supply recycled commercial plastic to businesses which currently use or want to
use recycled plastics in their products, such as the automotive and consumer
products industries. Working with our metal shredder/recycling
partners, we intend to utilize our proprietary cleaning technology to take the
Shredder Residue headed to landfillstainted with contaminants and convert it
into two streams of recyclable material with no remaining trace of
contaminants. Using our process, plastics, rubber, and foam, can be
recovered from the shedder waste. We will use our proprietary
technology to process the plastic stream, removing the contaminants and creating
recycled commercial plastic material ready to be re-introduced into
commerce.
Our
plastic recovery process is both highly cost effective and efficient, and it
dramatically reduces the amount of Shredder Residue going to landfills. Our
process is environmentally responsible on multiple levels, and it will assist
our customers in reducing their carbon footprint by allowing them to utilize a
greater percentage of recycled material in their products.
The
recovered plastics by us will be our main source of
revenue. Automotive parts manufacturers are our primary target
market. However, the use of our recycled materials isn’t limited to
automotive parts. Numerous other durable goods manufacturers utilize
plastics, and recycled plastic will work in many applications. As a
result, we believe there is significant demand in both domestic and
international markets for these materials, and we have identified multiple
targets for our output stream of recycled material, beginning with a large
multi-national supplier to the automotive industry worldwide. We
believe that our customers will be able to utilize a larger percentage of highly
cost-effective recycled plastic in the manufacturing process of their products
and create dramatic savings over the cost of using only virgin plastic (tied to
the cost of petroleum).
7
Automotive Parts---Our Largest Market
Prospect
The
automotive industry uses plastic for its durability, corrosion resistance, ease
of coloring and finishing, resiliency, cost, energy efficiency, and lightweight
characteristics. Utilizing lightweight manufacturing products translates
directly into improved fuel usage experience and lowered costs to the consumer
as well as lower costs to the manufacturer. And, the use of plastics in car
bodies, along with improvements in coating technology, contribute to automobiles
lasting much longer than vehicles did before the widespread use of plastics in
fender liners, quarter panels, and other body parts.
According
to the U.S. Department of Labor, despite news of plant closures and unemployed
autoworkers, the motor vehicle and parts manufacturing industry continues to be
one of the largest employers in the country and a major contributor to the US
economy.
In 2006,
approximately 9200 establishments manufactured motor vehicles and motor vehicle
parts. From small parts plants with a few workers to huge assembly plants that
employ thousands, the largest sector of this industry is motor vehicle parts
manufacturing. That industry includes electrical and electronic equipment;
engines and transmissions; brake systems; seating and interior trim; steering
and suspension components; air-conditioners; and motor vehicle stampings, such
as fenders, tops, body parts, trim, and molding. Plastics are a large
and growing part of many of these products.
In 2001,
Chrysler Motors created the “Care Car II” program to demonstrate the usage of
recycled plastics in automotive design, manufacturing and materials
certification. It was thought that use of recycled plastic in
vehicles would reduce costs (from the cost of virgin plastic), reduce the carbon
foot print ‘created’ in production, and improve the life cycle analysis results
on each vehicle.
The
key objectives of the program were to:
1. Obtain
recycled plastics;
2. Work with
the supplier base responsible for the production molding of many parts and
components;
3. Allow
suppliers to manufacture these parts using recycled plastics, and process them
using the same procedures used in manufacturing parts from virgin plastic;
and
4. Demonstrate
recovery technology that made plastic recycling more cost
effective.
To
demonstrate the Care Car Program, plastics were recovered from shredder residue
including PP/PE, ABS, PUR (defined below), as well as foam and rubber. These
materials were then used to create over150 pounds of recycled plastic that could
replace virgin plastics in a new vehicle. The program vehicles’ parts
(molded from recycled plastics) were then subjected to accelerated durability
testing and met all Chrysler’s performance and material specifications. The
vehicles were subsequently shown at the following technical and public events in
2002:
· New York
Auto Show;
· Paris
Auto Show;
· GPEC
International Plastics Convention, Detroit, MI;
· Automotive
Reporters Review, New York City, NY;
· Washington
DC (Received Environmental Award for the Year);
· Senior
Management- DaimlerChrysler, Auburn Hills MI. and Stuttgart
Germany;
· Ford
Motor Company, GM, Mercedes and Porsche;
This
demonstration program received numerous write-ups in technical magazines, SAE
Papers, newspapers and proved that substantial cost savings were available to
automotive manufacturers through the use of recycled plastic material. It was
determined that 100-150 pounds of recycled plastic could be implemented into
automotive plastics components for both the interior and exterior parts of new
vehicles. However, at the time (2001), the necessary production,
recovery, and cleaning technologies (removal of PCB’s) for recycling plastics
from waste were lacking, thus making large-scale operations
unfeasible.
8
That was
then. Today, our cleaning technologies can provide a viable stream of
recycled plastics into commerce. We intend to take advantage of the
increasing market for recycled goods (starting with automotive parts), and to
assist companies facing growing mandates to utilize recyclable material in their
products. With our strategic partners, we will focus on industries
faced with rising material costs and searching for ways to apply and introduce
“green” technology and materials to their products. Our technology
will allow these industries to reduce manufacturing costs and decrease the
carbon footprint of their products.
Ironically,
the automotive industry will supply the Shredder Residue used by PCT to create
commercially recycled plastics from the shredding of old
vehicles. Currently, about 15,000,000 automobiles get shredded every
year in the US alone. Accordingly, to the Institute for Scrap
Recycling Industries (ISRI) and US Car data, each vehicle contains roughly 300
pounds of plastics (recyclable potential: 4.5 billon pounds per year)
that can be recycled by our process. Therefore, we create
a virtuous circle of recycling: Shredder Residue from old vehicles creating
recycled plastics then sold to major automotive manufacturers for use in new
vehicles.
The Green EnviroTech “Plastistract™” Separation
Process
Our
recycling process begins by receiving Shredder Residue generated by metal
recycling companies. The Shredder Residue is separated into four (4) distinct
streams of material: plastics, foam, rubber, and waste. The automated
separation of shredder residue is a mechanical process developed by one of our
strategic partners (and a shareholder) Central Manufacturing in Groveland,
IL.
Once the
plastics are separated from the shredder residue, they are ground into inch long
pieces and the cleaning process starts. With our patent pending,
proprietary technology, we then remove any contaminants from the plastics stream
using a single step process consisting of a combination of two liquefied gases
under pressure. This innovative cleaning system is effective and extremely cost
efficient.
Plastic
resin which has been surface contaminated is submerged in a liquefied gas
mixture. The gas mixture works to remove the contaminants in a unique
way. A propane component of the mixture dissolves the heavy "oils" and
"waxes" because of its high solvent capability. A carbon dioxide component
provides light oil removal, a small molecule to reach deep into the material,
and a safety blanket for the propane. Throughout the system, the plastic
resin is contacted with the gas or liquid stream of the mixture and agitated to
ensure complete removal of the contaminants. The liquid mixture is then
distilled for reuse while the contaminants are safely collected. We
have termed the entire process “Plastistract™,” an illustration of which is
provided on the following page.
9
Once
cleaned, the plastic stream is then separated into three (3) separate streams
using sink float technology. The separated streams are then sent through a metal
detector and are ready for market—either packaged, or sent into a rail car or
bulk truck ready for use by our compounding partner. The three (3) output
streams offered for sale will include a PP/PE mix, an ABS / HIPS mix, and mixed
plastics. Rubber and foam waste streams will be disposed of,
and any plastic waste will be utilized in the P2Ffuel conversion process
wherever possible.
We plan
to combine our proprietary technology and the experience of our management team
to further streamline and improve this process over time. Our on-going research
and development efforts will be focused on continually improving the
characteristics and quality of the recycled plastics, thus allowing our
customers to use increased percentages of recycled material in their end
products. We plan to provide plastics parts manufacturing industries with
increasing cost savings, production efficiencies, and environmentally friendly
methods, which will allow them to integrate commercially recycled plastics into
the production of new products too.
Compounding
After Cleaning and Separation
The
Modern Plastics Encyclopedia (1995) defines “plastics compounding” as: the
incorporation of additional ingredients to base plastic types needed for
processing to create optimal properties in the finished material. These
ingredients may include additives to improve a polymer's physical properties,
stability or process-ability.
Compounding
is usually required for recycled materials for the following
reasons:
1.
|
It
allows virgin materials to be mixed with recycled materials to meet
material specifications for performance and recycled material content
(minimum: 25%) targets;
|
2.
|
It
allows additives to be compounded into the recycled material to meet
target application
requirements;
|
3.
|
Recycled
materials are typically ground from parts that produce flakes. The
compounding process turns them into pellets that can be more easily
handled by traditional plastics processing equipment;
and
|
4.
|
It
provides a very important homogenization step. Recycled materials are
usually a mix of many different grades of the same basic material. Even
though the materials might be from the same family, differences in
molecular weight, copolymer ratios, etc. can lead to a mixed material
having poor homogeneity. The intensive physical mixing in a molten polymer
that is achieved during extrusion can homogenize different grades of
materials.
|
Chemical
Resources, Inc. of Chesapeake, VA., will provide compounding services for us and
our end-user customers. They have a facility within ten (10) miles of
a projected Company plant location, and have easy access to multiple modes of
transportation including truck, rail, and ship on the site.
Facilities Locations Reduce
Transportation Costs
We will
keep our own production costs to a minimum by locating our recycling
facilities in close proximity to metal shredders, and thus our shredder residue
source material. Over thirty (30) potential sites nationally (and one
hundred forty (140) sites internationally) have been identified with the
assistance of one of our strategic partners, Sadoff & Rudoy Metals.
Additionally, we project to have one facility on the same site as our plastics
compounding partner, which will dramatically reduce our shipping costs and
(necessary) price mark-ups to end user customers. At these sites, we
intend to build or lease its facilities to minimize transportation costs, to
potentially reduce land and plant costs, and to help create and foster
relationships with our various partners’ industries. This location
strategy will continually benefit both our suppliers and customers.
Facilities Development
Plan
Due to
their proximity to both major shredder residue supply and our compounding
partner, we are likely to construct our first recycling facility in Oshkosh
WI.
Strategic Partners and
Business Synergies
We have
identified and are working with a large number of businesses that will act as
key strategic partners in this operation. Additionally, we are in
discussions with a large, international logistics company for providing us with
transportation services and operating facilities and with a plastics compounder
(Chemical Resources, Inc.) who may convert our recycled materials into a
recycle/virgin plastic “compound” to be used in end product
manufacture. We are working on a joint-venture
relationship which will allow us to convert “mixed ”
plastic to synthetic fuel.
10
We
believe that our strategic partners will play an integral role in supplying us
with source material, logistics, co-production of materials, and
sales. We believe that our transportation partner will increase
hauling volume and get facilities leases; our compounding partner gets new
business volume; and our fuels conversion partner will get a steady, lower-cost
source of feedstock.
Sales and
Marketing
While we
intend to focus our initial sales and marketing efforts on the automotive parts
manufacturing business, we also expect to begin approaching multiple durable
goods (appliance) manufacturers in year one as well. Our efforts will include
direct sales to auto and durable goods companies, as well as to various parts
suppliers.
Product
Focus
Keys to
Recycled Plastics Sales include having products that are:
·
|
Free
of substances of concern
|
·
|
Lower
Cost (than virgin)
|
·
|
Green/environmentally
responsible
|
·
|
Able
to provide Improved Life Cycle
Analysis
|
·
|
Able
to Reduced Carbon Foot Print in manufacturing
process
|
·
|
Offered
in large production volumes
|
·
|
Able
to meet Quality Control Standards
|
Potential
Customers:
Our
potential customers include automotive parts suppliers and car
manufactures.
Other
Markets--Opportunities
Durable
Goods Plastics
Manufactured
items with a useful life of more than three (3) years, including automobiles,
appliances, computers, etc., are called durable goods. Plastics can reduce
energy consumption for all of these industries, providing a substantial saving
in production costs.
Manufacturers
of durable goods choose plastics for other reasons as well. Appliance
manufacturers use plastics because of their ease of fabrication, wide range of
design potential, and thermal, electrical, and acoustic insulation.
Plastic insulation in refrigerators and freezers helps reduce operations costs
to the consumer. Plastics characteristics can significantly reduce
production and use energy consumption and greenhouse gas generation, thus
creating an environmentally friendly (“green”) marketing
opportunity. In major household appliances, plastic parts can
increase product life of some appliances by as much as sixty seven percent
(67%), and the possible applications for injection molded plastic parts are
virtually unlimited. For example:
1)
|
Use
of durable, inexpensive plastic parts in refrigerators, freezers and air
conditioners helps control costs;
|
2)
|
Injection
molded plastic parts have improved efficiency of major appliances by more
than 30 percent since the early 1970’s;
and
|
3)
|
Injection
molded plastic components help appliances resist
corrosion.
|
11
Some
examples of white goods products/parts using plastic and/or recycled
plastic:
Washing
Machine / Dryers
|
Refrigerators
|
Agitators
|
Ice
Trays
|
Knobs
|
Ice
Makers
|
Switches
|
Shelves
|
Gears
|
Drawers
|
Lint
Filters
|
Handles
|
Dishwashers
|
Air
Conditioners
|
Baskets
|
Vents
|
Dish
racks
|
Knobs/Switches
|
Rollers
|
Panels
|
Panels
|
Fan
Blades
|
Door
Seals
|
Blower
Wheels
|
Water
Tubes / Inlets
|
|
Valves
|
|
Refrigerators
|
Microwave
Ovens
|
Ice
Trays
|
Handles
|
Ice
Makers
|
Trays
|
Shelves
|
Switches
|
Drawers |
In light
of the above, the appliance industry also represents a potential market for
us.
In
addition the markets for off road vehicles, garden tools, including lawn mowers
.
In
addition we have potential markets in Asia.
Competition
Given the
substantial size and scope of the plastics industry worldwide, and the
commoditized nature of many of its “sub-markets” we recognize that we will be
operating in a volatile, and highly competitive international environment
consisting of large and small petroleum, chemical, and compounding
companies.
Employees
As of the
date of the filing of this report, we have four employees who are
full-time, two of which are executive officers. We consider our
employee relations to be good.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
12
Plan of Operation
We are a
development stage company. Since our formation, we have concentrated
on developing our business strategy and obtaining financing. We are a
plastics recovery, separation, cleaning, and recycling company. We intend to
supply recycled commercial plastics to industries such as the automotive and
consumer products industries, and plan to construct large-scale plastics
recycling facilities near automotive shredder locations nationwide. Operating
with large national metal recycling partners, the Company, using a
patent-pending process developed in conjunction with Ergonomy LLC and Thar
Process, Inc., will produce recycled plastics ready to be re-introduced
into commerce. Additionally, with other strategic partners, we
will convert waste and scrap plastic (both from its own processing and from
other sources) into high-value energy products, including synthetic
oil.
During
the next twelve months, the Company expects to build an approximately 100,000
square foot plant in Oshkosh, WI. Provided funding is received the company will
be able to break ground in March and start to install equipment in June
2010. The company has been negotiating to have a contractor build to
suit the plant. The site has rail access that will allow the Company to ship its
finished product to a compounding plant in Chesapeake, VA or local compounders
to be processed.. The plant will operate 24 hours a day 7 days a
week, and process approximately 100,000 tons of Shredder Residue per
year.
The
financial positions of Wolfe Creek Mining, Inc. and Green EnviroTech Corp. as of
September 30, 2009 are reflected in the Unaudited Pro Forma Consolidated Balance
Sheets. The cash and liabilities as shown are a result of cash injected into the
companies by their directors as a purchase of stock or loan by a director to the
company. The cash was used for operations of the companies during their
development stages.
Results
of Operations:
Green
EnviroTech Corp. since inception on October 6, 2008 has expended its financial
resources toward the completion of its development stage and to procure funding
for its first plant of operation in Oshkosh, Wisconsin. Negotiations
for the purchase of equipment needed in the plant as well as the engineering and
design of the plant have been ongoing. Thus, the company’s
financial resources have been used for travel, professional services in the form
of engineering, design, legal and accounting. The general and
administrative expenses as reflected in the December 31, 2008 financials in the
amount of $96,877 and as reflected in the September 30, 2009 financials in the
amount of $ 178,041 show the amounts expended for these purposes. Green
EnviroTech Corp on September 30, 2009 had a balance of cash in the bank in the
amount of $17,761 and had accounts payable to vendors in the amount of
$38,212. The balance due to related parties is the balance of the
loan to the company in the amount of $166,290 by its president and chief
executive officer, Mr. Gary DeLaurentiis. The equity of the company
is further explained in the notes to the Pro Froma Financial Statements. From
October 6, 2008 (inception) through December 31, 2008, we did not generate any
revenue.
13
Consulting
services and general administrative expenses from October 6, 2008 (inception)
through December 31, 2008 were $96,877.
The
Company had non operating expenses of $58 from October 6, 2008 (inception)
through December 31, 2008.
As a
result of the above, the Company had a net loss of $96,935 from October 6, 2008
(inception) through December 31, 2008
Off-Balance
Sheet Arrangements
None.
Item
3. Properties
Our
principal executive offices are located at 14699 Holman Mtn Rd Jamestown CA
95327
Item
4. Security Ownership of Certain Beneficial Owners and
Management
The
following table sets forth certain information, as of November 1, 2009 with
respect to the beneficial ownership of the outstanding Common Stock by (i) any
holder of more than five (5%) percent; (ii) each of the Company’s executive
officers and directors; and (iii) the Company’s directors and executive officers
as a group. Except as otherwise indicated, each of the stockholders listed below
has sole voting and investment power over the shares beneficially
owned.
Name
of Beneficial Owner (1)
|
Common
Stock
Beneficially
Owned
|
Percentage
of
Common
Stock (2)
|
||||||
Directors
and Officers:
|
||||||||
Gary
M. DeLaurentiis
|
1,020,000 | 25.49 | % | |||||
Andy
Kegler
|
359,890 | 9 | % | |||||
All
officers and directors as a group ( 2 persons)
|
||||||||
Beneficial
owners of more than 5%:
|
1,379,890 | 34.49 | % | |||||
Lalit
Chordia(3)
|
471,807 | 12 | % | |||||
Jeff
Chartier(4)
|
299,700 | 7.49 | % | |||||
* Less
than 1%
(1)
|
Except
as otherwise indicated, the address of each beneficial owner is 114 S Main
Street Suite 201.
|
(2)
|
Applicable
percentage ownership is based on 4,000,004 shares of Common Stock
outstanding as of November 1, 2009 together with securities
exercisable or convertible into shares of Common Stock within 60 days of
November 1, 2009 for each stockholder. Beneficial ownership is
determined in accordance with the rules of the SEC and generally includes
voting or investment power with respect to securities. Options
or Warrants to purchase shares of Common Stock that are currently
exercisable or exercisable within 60 days of November 1, 2009 are deemed
to be beneficially owned by the person holding such securities for the
purpose of computing the percentage of ownership of such person, but are
not treated as outstanding for the purpose of computing the percentage
ownership of any other person.
|
(3)
|
The
address for Lalit Chordia is 730, William Pitt Way, Pittsburg
PA.
|
(4)
|
The
address for Jeff Chartier is 227 Mott Street, New York, New York,
10012.
|
14
Item
5. Directors and Executive Officers
Below are
the names and certain information regarding the Company’s executive officers and
directors following the acquisition of Green EnviroTech.
Name
|
Age
|
Position
|
Gary
M. DeLaurentiis
|
65
|
Chief
Executive Officer and Chairman
|
Andy
Kegler
|
44
|
Chief
Technology Officer and Director
|
Directors
serve until the next annual meeting of stockholders or until their successors
are elected and qualified. Officers serve at the discretion of the
board of directors.
Gary
M. De Laurentiis, Chairman and Chief Executive Officer
Mr. De
Laurentiis, 65, Mr. DeLaurentiis has been our Chief Executive Officer since July
2009. Prior to that he served as our Chief Operating Officer from
September 2008 until July 2009. Mr. DeLaurentiis has been active in
the plastics recycling business for nearly 20 years. In partnership with the
Chinese government, he designed and built his first plastics recycling plant in
1987. In the years since, he has designed, remodeled, built and operated plants
in Mexico, North Carolina, Ohio, Florida, California and Canada for both local
governments and private industries. From 1992 to 1995, Mr. De Laurentiis worked
directly with the state government in Campeche Mexico, living on-site for
eighteen (18) months while directing the entire project. In 1996, an Ohio based
group recruited Mr. De Laurentiis to open a shuttered recycling plant. Mr. De
Laurentiis left the company in 1999 to start ECO2 Plastics Inc. Left Eco2
Plastics in September 2008 to start Green EnviroTech
Andrew
Kegler , Chief Technology Officer and Director
Mr. Kegler, 44, has been our Chief
Technology Officer and a Director since 2008. He holds multiple patents/patents
pending for chemical and mechanical equipment design; has long been
involved in process and project management; and has design experience in
rotating machinery, sheet metal, pressure vessels, pneumatics, hydraulics, PLC
and electronics, thermodynamics, fluid mechanics, and plastic injection molded
parts. He led teams at American Dryer Corp. & Alliance Laundry
Systems, LLC (Speed Queen) in developing first commercially introduced CO2 dry
cleaning machines. Mr. Kegler is currently a consultant & designer of
CO2
cleaning machines across multiple other industries, including plastics
and food processing. He has a demonstrated history of leadership with
diverse groups of technical personnel, and supervisory experience with
engineering teams and union labor. Mr. Kegler’s knowledge of company structures
with regard to technical business decisions, creative approaches to problem
solving and his experience in new product development, budgeting and production
validation make him an invaluable member of any technical team. In 1986, Mr.
Kegler earned a Bachelor of Science degree in Mechanical Engineering Roger
Williams University.
Item
6. Executive Compensation
The
following table sets forth all compensation paid in respect of our Chief
Executive Officer and those executive officers who received compensation in
excess of $100,000 per year for the period from October 6, 2008 (date of
inception) to December 31, 2008. No executive officer of the Company received
compensation in excess of $100,000 per year for the period from October 6, 2008
(date of inception) to December 31, 2008.
15
SUMMARY
COMPENSATION TABLE
Name
& Principal
Position
|
Year
|
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in Pension
Value
and Non-
Qualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||
Gary
DeLaurentiis
|
2008
|
|
0 |
0
|
|||||||||||||||
Chief
Executive Officer and Chairman
|
|
Employment
Agreements
We
currently have no formal employment or consulting agreements with our executive
officers.
Director
Compensation
No
director of Green EnviroTech Corp. received any compensation for services as
director for the year ended December 31, 2008.
Item
7. Certain Relationships and Related Transactions, and Director
Independence
Certain
Relationships and Related Transactions
Gary
DeLaurentiis has provided Green EnviroTech with an unsecured line of credit of
up to $200,000. Interest on the line of credit is 4% per annum. As of June 30,
2009, Mr. DeLaurentiss has loaned the Company $30,790 pursuant to the line of
credit and there is interest due of $409.
Director
Independence
Our sole
director is not independent as that term is defined under the Nasdaq Marketplace
Rules.
Item
8. Legal Proceedings
We are
not party to any legal proceedings.
Item
9. Market Price of and Dividends on Common Equity and Related Stockholder
Matters
The
Common Stock is eligible for quotation on the Over-the-Counter Bulletin Board
under the symbol “WCRM.OB”. As of the date of the filing of this
report, there has been no trading in the Common Stock.
As of
November 1, 2009, there were approximately 26 holders of record of the Common
Stock.
Dividends
The
Company has never declared or paid any cash dividends on its Common Stock. The
Company currently intends to retain future earnings, if any, to finance the
expansion of its business. As a result, the Company does not anticipate paying
any cash dividends in the foreseeable future.
16
Securities
Authorized for Issuance Under Equity Compensation Plans
The
Company has not adopted any equity compensation plan as of December 31,
2009.
Item
10. Recent Sales of Unregistered Securities
See Item
3.02.
Item
11 Description of Securities
The
Company’s authorized capital stock consists of 75,000,000 shares of Common Stock
at a par value of $0.001 per share and 25,000,000 authorized preferred
shares. As of November 1, 2009, there were 4,000,004 shares of
common shares of the Company’s Common Stock issued and outstanding held by 26
stockholders of record.
The
holders of our common stock (i) have equal ratable rights to dividends from
funds legally available therefore, when, as and if declared by our Board of
Directors; (ii) are entitled to share in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or winding
up of our affairs; (iii) do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions or rights; and
(iv) are entitled to one non-cumulative vote per share
on all
matters on which stockholders may vote.
NON-CUMULATIVE
VOTING
Holders
of shares of our common stock do not have cumulative voting rights,
which
means that the holders of more than 50% of the outstanding shares, voting for
the election of directors, can elect all of the directors to be elected, if they
so choose, and, in such event, the holders of the remaining shares will not be
able to elect any of our directors.
PREFERRED
STOCK
Our
Certificate of Incorporation authorizes the issuance of 25,000,000 shares of
preferred stock, .001 par value per share. No preferred shares have been
issued.
Item
12. Indemnification of Directors and Officers
Wolfe
Creek’s By-Laws allow for the indemnification of the officers and directors in
regard to their carrying out the duties of their offices. The board of directors
will make determination regarding the indemnification of the director, officer
or employee as is proper under the circumstances if he/she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law.
As to
indemnification for liabilities arising under the Securities Act of 1933for
directors, officers or persons controlling Wolfe Creek Mining, Inc., we have
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
Item
13. Financial Statements and Supplementary Data
With
regard to Wolfe Creek’s financial statements, reference is made to the filings
with the SEC made by Wolfe Creek Mining on Form 10-K on February 9, 2009, and
Form 10-Q on August 6, 2009.
The
financial statements of Green EnviroTech Corp. begin on Page
F-1 to this Form 8-K.
17
Item
14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Item
3.02 Unregistered Sales of Equity Securities.
On
October 15, 2007 Wolfe Creek issued a total of 3,000,000 shares of common stock
to Kristen Paul, Wolfe Creek’s sole officer and director, for cash at $0.005 per
share for a total of $15,000. These securities were issued in reliance upon the
exemption contained in Section 4(2) of the Securities Act of 1933 for
transactions not involving a public offering. These securities bear a
restrictive legend and were issued to an accredited investor.
On
November 2009, pursuant to the Merger Agreement, the Company
issued 3,000,004 shares of common stock of the Company to the shareholders of
Green EnviroTech. Pursuant to the Merger Agreement, the outstanding shares of
common stock of Green EnviroTech were cancelled.
In
connection with the foregoing, the Company relied upon the exemption from
securities registration afforded by Rule 506 of Regulation D as promulgated by
the United States Securities and Exchange Commission under the Securities Act of
1933, as amended (the “Securities Act”) and/or Section 4(2) of the Securities
Act. No advertising or general solicitation was employed in offering the
securities. The offerings and sales were made to a limited number of persons,
all of whom were accredited investors, and transfer was restricted by the
Company in accordance with the requirements of the Securities Act of
1933.
At
inception in October 2008, Green EnviroTech issued 8,823,529 shares of common
stock to its founders for $30,000 in cash and services valued at
$58,235.
In
connection with the foregoing, Green Envirotech relied upon the exemption from
securities registration afforded by Section 4(2) of the Securities Act for
transactions not involving a public offering. No advertising or general
solicitation was employed in offering the securities. Transfer was restricted by
Green EnviroTech in accordance with the requirements of the Securities
Act.
Item
5.01 Changes in Control of Registrant.
See Item
2.01.
See Item
1.01.
Item
5.06 Change in Shell Company Status.
See Item
1.01.
Item
9.01 Financial Statements and Exhibits.
(a) Financial
statements of Green EnviroTech Corp. . See Page F-1.
(b) Pro forma financial information. See Exhibit 99.1.
(c) Shell
Company Transactions. See (a) and (b) of this Item 9.01.
(d)
Exhibits
Exhibit
Number
|
Description
|
|
99.1
|
Agreement
and Plan of Merger, dated November 20, 2009, among Wolfe Creek
Mining, Inc. Green EnviroTech Corp. and Green EnviroTech
Acquisition Corp.
|
|
99.2 | Proforma financial information |
18
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WOLFE CREEK MINING, INC. | |||
Dated:
November 25,
2009
|
By:
|
/s/ Gary M. De Laurentiis | |
Name:
Gary M. De Laurentiis
Title:
Chief Executive Officer
|
|||
19
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
INDEX
TO FINANCIAL STATEMENTS
Financial
Statements:
Report of Independent Registered Public Accounting Firm | F-2 |
|
Balance
Sheet as of September 30, 2009 (unaudited) and December 31,
2008
|
F-3
|
|
Statements
of Operations For the Nine Months Ended September 30, 2009 and Period
October 6, 2008 (Inception) through September 30, 2009
(unaudited)
|
F-4
|
|
Statements
of Changes in Stockholders’ Equity (Deficit) For the Nine Months Ended
September 30, 2009 (unaudited) and Period October 6, 2008 (Inception)
through September 30, 2009
|
F-5
|
|
Statements
of Cash Flows For the Nine Months Ended September 30, 2009 and Period
October 6, 2008 (Inception) through September 30, 2009
(unaudited)
|
F-6
|
|
Notes to Financial Statements
|
F-7
|
F-1
Report
of Independent Registered Public Accounting Firm
To the
Directors of
Green
EnviroTech Corp.
(formerly
EnviroPlastics Corporation)
We have
reviewed the accompanying balance sheet of Green EnviroTech Corp. (formerly
EnviroPlastics Corporation) (the "Company") (a development stage company) as of
September 30, 2009, and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the nine months ended
September 30, 2009 as well as the period October 6, 2008 (inception) through
September 30, 2009 for the statements of operations, stockholders’ equity
(deficit) and cash flows. These interim financial statements are the
responsibility of the Company's management.
We
conducted the reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on
our review, we are not aware of any material modifications that should be made
to the accompanying interim financial statements for them to be in conformity
with U.S. generally accepted accounting principles.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has sustained operating losses and capital
deficits that 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 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/KBL,
LLP
New York,
NY
November
13, 2009
F-2
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
SEPTEMBER
30, 2009 (UNAUDITED) AND DECEMBER 31, 2008
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 17,761 | $ | - | ||||
Total current assets | 17,761 | - | ||||||
|
||||||||
TOTAL
ASSETS
|
$ | 17,761 | $ | - | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable and accrued expenses
|
$ | 38,212 | $ | 58 | ||||
Loan
payable - related party
|
166,290 | 8,642 | ||||||
Total current liabilities | 204,502 | 8,700 | ||||||
TOTAL
LIABILITIES
|
204,502 | 8,700 | ||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||||||
Preferred
stock, $0.001 par value, 100,000,000 shares authorized,
|
||||||||
0
shares issued and outstanding
|
- | - | ||||||
Common
stock, $0.001 par value, 500,000,000 shares authorized,
|
||||||||
8,823,529
shares issued and outstanding
|
8,824 | 8,824 | ||||||
Additional
paid in capital
|
79,411 | 79,411 | ||||||
Deficit
accumulated during the development stage
|
(274,976 | ) | (96,935 | ) | ||||
Total stockholders' equity (deficit) | (186,741 | ) | (8,700 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 17,761 | $ | - | ||||
The
accompanying notes are an integral part of these financial
statements.
|
F-3
GREEN
ENVIROTECH CORP.
(FORMERLY ENVIROPLASTICS CORPORATION)
OCTOBER
6,
|
||||||||
2008 | ||||||||
NINE
MONTHS
|
(INCEPTION)
|
|||||||
ENDED
|
THROUGH
|
|||||||
SEPTEMBER
30, 2009
|
SEPTEMBER
30, 2009
|
|||||||
REVENUE
|
$ | - | $ | - | ||||
COST
OF REVENUES
|
- | - | ||||||
GROSS
PROFIT
|
- | - | ||||||
OPERATING
EXPENSES
|
||||||||
Professional
fees and consulting services
|
120,233 | 178,468 | ||||||
General
and administrative
|
56,674 | 95,316 | ||||||
Total
operating expenses
|
176,907 | 273,784 | ||||||
NON-OPERATING
EXPENSES
|
||||||||
Interest
expense
|
1,134 | 1,192 | ||||||
Total
non-operating expenses
|
1,134 | 1,192 | ||||||
NET
(LOSS)
|
$ | (178,041 | ) | $ | (274,976 | ) | ||
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
|
8,823,529 | 8,823,529 | ||||||
NET
(LOSS) PER SHARE
|
$ | (0.02 | ) | $ | (0.03 | ) | ||
The
accompanying notes are an integral part of these financial
statements.
|
F-4
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009
FOR
THE PERIOD OCTOBER 6, 2008 (INCEPTION) THROUGH SEPTEMBER 30,
2009
(UNAUDITED)
Deficit
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
During
the
|
|||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Development
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||||||||
Balance
- October 6, 2008
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Common
shares issued to founders for cash
|
- | - | 3,000,000 | 3,000 | 27,000 | - | 30,000 | |||||||||||||||||||||
Common
shares issued to founders for services
|
- | - | 5,823,529 | 5,824 | 52,411 | - | 58,235 | |||||||||||||||||||||
Net
loss for the period
|
- | - | - | - | - | (96,935 | ) | (96,935 | ) | |||||||||||||||||||
Balance
- December 31, 2008
|
- | - | 8,823,529 | 8,824 | 79,411 | (96,935 | ) | (8,700 | ) | |||||||||||||||||||
Net
loss for the period
|
- | - | - | - | - | (178,041 | ) | (178,041 | ) | |||||||||||||||||||
Balance
- September 30, 2009
|
- | $ | - | 8,823,529 | $ | 8,824 | $ | 79,411 | $ | (274,976 | ) | $ | (186,741 | ) | ||||||||||||||
The
accompanying notes are an integral part of these financial
statements.
|
F-5
GREEN
ENVIROTECH CORPORATION
(FORMERLY ENVIROPLASTICS CORPORATION)
OCTOBER
6,
|
||||||||
2008 | ||||||||
NINE
MONTHS
|
(INCEPTION)
|
|||||||
ENDED
|
THROUGH
|
|||||||
SEPTEMBER
30, 2009
|
SEPTEMBER
30, 2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
(loss)
|
$ | (178,041 | ) | $ | (274,976 | ) | ||
Adjustments
to reconcile net (loss)
|
||||||||
to
net cash used in operating activities:
|
||||||||
Common
stock issued for services
|
- | 58,235 | ||||||
Change
in assets and liabilities
|
||||||||
Increase
in accounts payable and accrued expenses
|
38,154 | 38,212 | ||||||
Total
adjustments
|
38,154 | 96,447 | ||||||
Net
cash (used in) operating activities
|
(139,887 | ) | (178,529 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Issuance
of stock for cash
|
- | 30,000 | ||||||
Proceeds
received from loan payable - related party
|
157,648 | 166,290 | ||||||
Net
cash provided by financing activities
|
157,648 | 196,290 | ||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
17,761 | 17,761 | ||||||
|
||||||||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
- | - | ||||||
|
||||||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ | 17,761 | $ | 17,761 | ||||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | - | $ | - | ||||
NON-CASH
SUPPLEMENTAL INFORMATION:
|
||||||||
Stock
issued for services
|
$ | - | $ | 58,235 | ||||
The
accompanying notes are an integral part of these financial
statements.
|
F-6
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
1-
|
ORGANIZATION AND BASIS
OF PRESENTATION
|
On
October 6, 2008, EnviroPlastics Corporation (the “Company”) was incorporated in
the State of Nevada.
The
Company is a plastics recovery, separation, cleaning, and recycling company,
with the intent to supply recycled commercial plastics to industries such as the
automotive and consumer products industries, and it plans to construct
large-scale plastics recycling facilities near automotive shredder locations
nationwide. Operating in conjunction with large national recycling partners, the
Company using a patent pending process developed in conjunction with Thar
Process, Inc. will produce recycled commercial grade plastics ready to be
re-introduced into commerce. Additionally, the Company will convert waste and
scrap plastic into high-value energy products, including synthetic
oil.
On
September 22, 2009, the Company changed its name to Green EnviroTech
Corp.
Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted
Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB
Accounting Standards Codification (the “Codification”) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with U.S. GAAP. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. All guidance contained in the Codification carries an equal
level of authority. The Codification superseded all existing non-SEC accounting
and reporting standards. All other non-grandfathered, non-SEC accounting
literature not included in the Codification is non-authoritative. The FASB will
not issue new standards in the form of Statements, FASB Positions or Emerging
Issue Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.
Going
Concern
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated revenues since
inception and has generated losses totaling $274,976 through September 30, 2009,
and needs to raise additional funds to carry out their business
plan.
F-7
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
1-
|
ORGANIZATION AND BASIS
OF PRESENTATION
|
Going Concern
(Continued)
The
continuation of the Company as a going concern is dependent upon the continued
financial support from its shareholders, and the ability of the Company to
obtain necessary equity financing to continue operations.
The
Company has had very little operating history to date. These financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going concern.
These factors raise substantial doubt regarding the ability of the Company to
continue as a going concern.
Besides
generating revenues from proposed operations, the Company may need to raise
additional capital to expand operations to the point at which the Company can
achieve profitability. The terms of equity that may be raised may not be on
terms acceptable by the Company. If adequate funds cannot be raised outside of
the Company, the Company’s officers and directors may need to contribute funds
to sustain operations.
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Development Stage
Company
The
Company is considered to be in the development stage as defined in ASC 915,
“Accounting and Reporting by
Development Stage Enterprises”. The Company has devoted substantially all
of its efforts to the corporate formation and the raising of
capital.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Cash and Cash
Equivalents
The
Company considers all highly liquid debt instruments and other short-term
investments with maturity of three months or less, when purchased, to be cash
equivalents.
The
Company maintains cash and cash equivalent balances at one financial institution
that is insured by the Federal Deposit Insurance Corporation.
F-8
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Fixed
Assets
Although
the Company does not have any fixed assets at this point, any fixed assets
acquired in the future will be stated at cost, less accumulated depreciation.
Depreciation will be provided using the straight-line method over the estimated
useful lives of the related assets. Costs of maintenance and repairs will be
charged to expense as incurred.
Recoverability of Long-Lived
Assets
Although
the Company does not have any long-lived assets at this point, for any
long-lived assets acquired in the future the Company will review their
recoverability on a periodic basis whenever events and changes in circumstances
have occurred which may indicate a possible impairment. The assessment for
potential impairment will be based primarily on the Company’s ability to recover
the carrying value of its long-lived assets from expected future cash flows from
its operations on an undiscounted basis. If such assets are determined to be
impaired, the impairment recognized is the amount by which the carrying value of
the assets exceeds the fair value of the assets. Fixed assets to be disposed of
by sale will be carried at the lower of the then current carrying value or fair
value less estimated costs to sell.
Fair Value of Financial
Instruments
The
carrying amount reported in the balance sheet for cash and cash equivalents,
accounts payable, and accrued expenses approximate fair value because of the
immediate or short-term maturity of these financial instruments. The Company
does not utilize derivative instruments.
Income
Taxes
The
Company accounts for income taxes utilizing the liability method of
accounting. Under the liability method, deferred taxes are determined
based on differences between financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in years in which differences are
expected to reverse. Valuation allowances are established, when
necessary, to reduce deferred tax assets to amounts that are expected to be
realized.
F-9
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Revenue
Recognition
The
Company will generate revenue from sales as follows:
1)
|
Persuasive
evidence of an arrangement exists;
|
2)
|
Delivery
has occurred or services have been
rendered;
|
3)
|
The
seller’s price to the buyer is fixed or determinable,
and
|
4)
|
Collectable
is reasonably assured.
|
The
Company anticipates that the plastics that are recovered will be their main
source of revenue, with the automotive parts manufacturers being the primary
market. However, the use of the Company’s recycled materials is not limited to
just automotive parts, therefore the Company will market numerous other
industries both domestically and internationally.
In
addition, the Company believes that they will generate revenue from joint
ventures with companies in the waste oil and waste plastics recycling
businesses, including royalties generated by the sale of synthetic oil products
developed by the joint venture partners.
(Loss) Per Share of Common
Stock
Basic net
loss per common share is computed using the weighted average number of common
shares outstanding. Diluted earnings per share (EPS) include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants. Common stock
equivalents are not included in the computation of diluted earnings per share
when the Company reports a loss because to do so would be anti-dilutive for
periods presented. The following is a reconciliation of the computation for
basic and diluted EPS:
F-10
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
(Loss) Per Share of Common
Stock (Continued)
September
30,
|
||||
2009
|
||||
Net
loss
|
$ | (178,041 | ) | |
Weighted-average
common shares
|
||||
outstanding
(Basic)
|
8,823,529 | |||
Weighted-average
common stock
|
||||
Equivalents
|
||||
Stock
options
|
- | |||
Warrants
|
- | |||
Weighted-average
common shares
|
||||
outstanding
(Diluted)
|
8,823,529 |
Uncertainty in Income
Taxes
The
Company follows ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC
740-10”). This interpretation requires recognition and measurement of uncertain
income tax positions using a “more-likely-than-not” approach. ASC 740-10 is
effective for fiscal years beginning after December 15, 2006. Management has
adopted ASC 740-10 for 2007, and they evaluate their tax positions on an annual
basis, and has determined that as of September 30, 2009, no additional accrual
for income taxes is necessary.
F-11
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards
In
September 2006, ASC issued 820, Fair Value Measurements. ASC
820 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosure about fair
value measurements. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007. Early adoption is
encouraged. The adoption of ASC 820 is not expected to have a material impact on
the financial statements.
In
February 2007, ASC issued 825-10, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of ASC 320-10,
(“ASC 825-10”) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. ASC 825-10 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
In
December 2007, the ASC issued ASC 810-10-65, Noncontrolling Interests in
Consolidated Financial Statements. ASC 810-10-65 establishes accounting
and reporting standards for ownership interests in subsidiaries held by parties
other than the parent, changes in a parent’s ownership of a noncontrolling
interest, calculation and disclosure of the consolidated net income attributable
to the parent and the noncontrolling interest, changes in a parent’s ownership
interest while the parent retains its controlling financial interest and fair
value measurement of any retained noncontrolling equity investment.
ASC
810-10-65 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. Early adoption is prohibited. Management is determining the impact that
the adoption of ASC 810-10-65 will have on the Company’s financial position,
results of operations or cash flows.
In
December 2007, the Company adopted ASC 805, Business Combinations (“ASC
805”). ASC 805 retains the fundamental requirements that the acquisition method
of accounting be used for all business combinations and for an acquirer to be
identified for each business combination. ASC 805 defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. ASC 805 will require an entity to record separately
from the business combination the direct costs, where previously these costs
were included in the total allocated cost of the acquisition. ASC 805
will require an entity to recognize the assets acquired, liabilities assumed,
and any non-controlling interest in the acquired at the acquisition date, at
their fair values as of that date.
F-12
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards (Continued)
ASC 805
will require an entity to recognize as an asset or liability at fair value for
certain contingencies, either contractual or non-contractual, if certain
criteria are met. Finally, ASC 805 will require an entity to
recognize contingent consideration at the date of acquisition, based on the fair
value at that date. This will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008. Early adoption is not permitted and the ASC is to
be applied prospectively only. Upon adoption of this ASC, there would
be no impact to the Company’s results of operations and financial condition for
acquisitions previously completed. The adoption of ASC 805 is not
expected to have a material effect on the Company’s financial position, results
of operations or cash flows.
In March
2008, ASC issued ASC 815, Disclosures about Derivative
Instruments and Hedging Activities”, (“ASC 815”). ASC 815 requires
enhanced disclosures about an entity’s derivative and hedging activities. These
enhanced disclosures will discuss: how and why an entity uses derivative
instruments; how derivative instruments and related hedged items are accounted
for and its related interpretations; and how derivative instruments and related
hedged items affect an entity’s financial position, financial performance, and
cash flows. ASC 815 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The Company does
not believe that ASC 815 will have an impact on their results of operations or
financial position.
Effective
April 1, 2009, the Company adopted ASC 855, Subsequent Events (“ASC
855”). ASC 855 establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. It requires disclosure of the date
through which an entity has evaluated subsequent events and the basis for that
date – that is, whether that date represents the date the financial statements
were issued or were available to be issued. This disclosure should alert all
users of financial statements that an entity has not evaluated subsequent events
after that date in the set of financial statements being presented. Adoption of
ASC 855 did not have a material impact on the Company’s results of operations or
financial condition. The Company has evaluated subsequent events through
November 13, 2009, the date the financial statements were issued.
F-13
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards (Continued)
In April
2008, the FASB issued ASC 350, “Determination of the Useful Life of Intangible
Assets”. The Company adopted ASC 350 on October 1, 2008. The guidance in ASC 350
for determining the useful life of a recognized intangible asset shall be
applied prospectively to intangible assets acquired after adoption, and the
disclosure requirements shall be applied prospectively to all intangible assets
recognized as of, and subsequent to, adoption. The Company does not believe ASC
350 will materially impact their financial position, results of operations or
cash flows.
Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurement and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted market price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using certain
techniques. ASU 2009-05 also clarifies that when estimating the fair value of a
liability, a reporting entity is not required to include a separate input or
adjustment to other inputs relating to the existence of a restriction that
prevents the transfer of a liability. ASU 2009-05 also clarifies that both a
quoted price in an active market for the identical liability at the measurement
date and the quoted price for the identical liability when traded as an asset in
an active market when no adjustments to the quoted price of the asset are
required for Level 1 fair value measurements. Adoption of ASU 2009-05 did not
have a material impact on the Company’s results of operations or financial
condition.
Other
ASU’s that have been issued or proposed by the FASB ASC that do not require
adoption until a future date and are not expected to have a material impact on
the financial statements upon adoption.
NOTE
3-
|
STOCKHOLDERS’ EQUITY
(DEFICIT)
|
The
Company was established with two classes of stock, common stock – 500,000,000
shares authorized at a par value of $0.001; and preferred stock – 100,000,000
shares authorized at a par value of $0.001.
At
inception, the Company issued 8,823,529 shares of common stock to the Company’s
founders at inception for $30,000 cash and $58,235 for services rendered, all
shares issued at $0.01 per share. The $30,000 was cash paid directly from a
founder for expenses related to the start-up of the company as well as
establishing relationships for the company’s business.
As of
September 30, 2009 and December 31, 2008, the Company has these 8,823,529 shares
of common stock issued and outstanding.
The
Company has not issued any preferred stock, options or warrants to
date.
F-14
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
4-
|
LOAN PAYABLE – RELATED
PARTY
|
|
The
Company has an unsecured, loan payable in the form of a line of credit
with their President. The President has provided a line of credit up to
$200,000 at 4% interest per annum to the Company to cover various expenses
and working capital infusions of cash until the Company can be funded. The
President advanced $166,290 through September 30, 2009. The interest
accrued for the nine months ended September 30, 2009 and period October 6,
2008 (inception) through September 30, 2009 is $1,134 and $1,192,
respectively.
|
The line
of credit matures on December 31, 2009.
NOTE
5-
|
PROVISION FOR INCOME
TAXES
|
Deferred
income taxes are determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities. Deferred income taxes are measured
based on the tax rates expected to be in effect when the temporary differences
are included in the Company’s tax return. Deferred tax assets and
liabilities are recognized based on anticipated future tax consequences
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.
As of
September 30, 2009, there is no provision for income taxes, current or
deferred.
Net
operating losses
|
$ | 93,492 | ||
Valuation
allowance
|
(93,492 | ) | ||
$ | - |
At
September 30, 2009, the Company had a net operating loss carry forward in the
amount of $274,976, available to offset future taxable income through
2029. The Company established valuation allowances equal to the full
amount of the deferred tax assets due to the uncertainty of the utilization of
the operating losses in future periods.
A
reconciliation of the Company’s effective tax rate as a percentage of income
before taxes and federal statutory rate for the nine months ended September 30,
2009 and period October 6, 2008 (inception) through September 30, 2009 is
summarized below.
Federal
statutory rate
|
(34.0 | )% | ||
State
income taxes, net of federal benefits
|
0.0 | |||
Valuation
allowance
|
34.0 | |||
0 | % |
F-15
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2009 (UNAUDITED)
NOTE
6-
|
FAIR VALUE MEASUREMENTS |
The
Company adopted certain provisions of ASC Topic 820. ASC 820 defines fair value,
provides a consistent framework for measuring fair value under generally
accepted accounting principles and expands fair value financial statement
disclosure requirements. ASC 820’s valuation techniques are based on observable
and unobservable inputs. Observable inputs reflect readily obtainable data from
independent sources, while unobservable inputs reflect our market assumptions.
ASC 820 classifies these inputs into the following hierarchy:
Level 1
inputs: Quoted prices for identical instruments in active markets.
Level 2
inputs: Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
Level 3
inputs: Instruments with primarily unobservable value drivers.
The
following table represents the fair value hierarchy for those financial assets
and liabilities measured at fair value on a recurring basis as of September 30,
2009:
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Cash
|
17,761 | - | - | 17,761 | ||||||||||||
Total
assets
|
17,761 | - | - | 17,761 | ||||||||||||
NOTE
7-
|
SUBSEQUENT
EVENTS
|
In
November 2009, the Company entered into an Agreement and Plan of Merger
(“Agreement”) with Wolfe Creek Mining, Inc. (“Wolfe Creek”) by which the Company
will exchange 100% of their issued and outstanding shares for 3,000,004 shares
of Wolfe Creek. There will be an acquisition subsidiary formed to complete the
transaction which will be in the form of a reverse triangular merger. The
Company will be the accounting acquirer in the transaction.
F-16
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
INDEX
TO FINANCIAL STATEMENTS
Financial
Statements:
Report of Independent Registered Public Accounting Firm | F-18 |
Balance Sheet as of December 31, 2008 |
F-19
|
|
Statements
of Operations For the Period October 6, 2008 (Inception) through December
31, 2008
|
F-20
|
|
Statements
of Changes in Stockholders’ Equity (Deficit) For the Period October 6,
2008 (Inception) through December 31, 2008
|
F-21
|
|
Statements
of Cash Flows For the Period October 6, 2008 (Inception) through December
31, 2008
|
F-22
|
|
Notes to Financial Statements
|
F-23
|
F-17
Report
of Independent Registered Public Accounting Firm
To the
Directors of
Green
EnviroTech Corp.
(formerly
EnviroPlastics Corporation)
We have
audited the accompanying balance sheet of Green EnviroTech Corp. (formerly
EnviroPlastics Corporation) (the "Company") (a development stage company) as of
December 31, 2008, and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the period October 6, 2008
(Inception) through December 31, 2008. Our responsibility is to express an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with 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. We were
not engaged to perform an audit of the Company’s 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 includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Green EnviroTech Corp. (formerly
EnviroPlastics Corporation) (a development stage company) as of December 31,
2008, and the results of its statements of operations, changes in stockholders’
equity (deficit), and cash flows for the period October 6, 2008 (Inception)
through December 31, 2008 in conformity with U.S. generally accepted accounting
principles.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company is in process of executing its business plan and
expansion. The Company has not generated significant revenue to this point,
however, has been successful in raising funds in their private placement. The
lack of profitable operations and the need to continue to raise funds raise
significant doubt about the Company’s ability to continue as a going concern.
Management’s plans in this regard are described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/KBL,
LLP
New York,
NY
October
7, 2009
F-18
GREEN
ENVIROTECH CORP.
(FORMERLY ENVIROPLASTICS CORPORATION)
(A DEVELOPMENT STAGE
COMPANY)
ASSETS
|
||||
CURRENT
ASSETS
|
||||
Cash
|
$ | - | ||
Total current assets | - | |||
|
||||
TOTAL
ASSETS
|
$ | - | ||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||
CURRENT
LIABILITIES
|
||||
Accounts
payable and accrued expenses
|
$ | 58 | ||
Loan
payable - related party
|
8,642 | |||
Total current liabilities | 8,700 | |||
TOTAL
LIABILITIES
|
8,700 | |||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||
Preferred
stock, $0.001 par value, 100,000,000 shares authorized,
|
||||
0
shares issued and outstanding
|
- | |||
Common
stock, $0.001 par value, 500,000,000 shares authorized,
|
||||
8,823,529
shares issued and outstanding
|
8,824 | |||
Additional
paid in capital
|
79,411 | |||
Deficit
accumulated during the development stage
|
(96,935 | ) | ||
Total stockholders' equity (deficit) | (8,700 | ) | ||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | - | ||
The
accompanying notes are an integral part of these financial
statements.
|
F-19
GREEN
ENVIROTECH CORP.
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF OPERATIONS
FOR
THE PERIOD OCTOBER 6, 2008 (INCEPTION) THROUGH DECEMBER 31, 2008
OCTOBER
6, 2008
|
||||
(INCEPTION)
|
||||
THROUGH
|
||||
DECEMBER
31, 2008
|
||||
REVENUE
|
$ | - | ||
COST
OF REVENUES
|
- | |||
GROSS
PROFIT
|
- | |||
OPERATING
EXPENSES
|
||||
Consulting
services
|
58,235 | |||
General
and administrative
|
38,642 | |||
Total
operating expenses
|
96,877 | |||
NON-OPERATING
EXPENSES
|
||||
Interest
expense
|
58 | |||
Total
non-operating expenses
|
58 | |||
NET
(LOSS)
|
$ | (96,935 | ) | |
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
|
8,823,529 | |||
NET
(LOSS) PER SHARE
|
$ | (0.01 | ) | |
The
accompanying notes are an integral part of these financial
statements.
|
F-20
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR
THE PERIOD OCTOBER 6, 2008 (INCEPTION) THROUGH DECEMBER 31,
2008
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||
Deficit
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
During
the
|
|||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Development | |||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||||||||
Balance
- October 6, 2008
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Common
shares issued to founders for cash
|
- | - | 3,000,000 | 3,000 | 27,000 | - | 30,000 | |||||||||||||||||||||
Common
shares issued to founders for services
|
- | - | 5,823,529 | 5,824 | 52,411 | - | 58,235 | |||||||||||||||||||||
Net
loss for the period
|
- | - | - | - | - | (96,935 | ) | (96,935 | ) | |||||||||||||||||||
Balance
- December 31, 2008
|
- | $ | - | 8,823,529 | $ | 8,824 | $ | 79,411 | $ | (96,935 | ) | $ | (8,700 | ) | ||||||||||||||
The
accompanying notes are an integral part of these financial
statements.
|
F-21
ENVIROPLASTICS
CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CASH FLOW
FOR
THE PERIOD OCTOBER 6, 2008 (INCEPTION) THROUGH DECEMBER 31, 2008
OCTOBER
6, 2008
|
||||
(INCEPTION)
|
||||
THROUGH
|
||||
DECEMBER
31, 2008
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||
Net
(loss)
|
$ | (96,935 | ) | |
Adjustments
to reconcile net (loss)
|
||||
to
net cash used in operating activities:
|
||||
Common
stock issued for services
|
58,235 | |||
Change
in assets and liabilities
|
||||
Increase
in accounts payable and accrued expenses
|
58 | |||
Total
adjustments
|
58,293 | |||
Net
cash (used in) operating activities
|
(38,642 | ) | ||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||
Issuance
of stock for cash
|
30,000 | |||
Proceeds
received from loan payable - related party
|
8,642 | |||
Net
cash provided by financing activities
|
38,642 | |||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
- | |||
|
||||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
- | |||
|
||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ | - | ||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
||||
Cash
paid during the period for:
|
||||
Interest
|
$ | - | ||
NON-CASH
SUPPLEMENTAL INFORMATION:
|
||||
Stock
issued for services
|
$ | 58,235 | ||
The
accompanying notes are an integral part of these financial
statements.
|
F-22
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
1-
|
ORGANIZATION AND BASIS
OF PRESENTATION
|
On
October 6, 2008, EnviroPlastics Corporation (the “Company”) was incorporated in
the State of Nevada.
The
Company is a plastics recovery, separation, cleaning, and recycling company,
with the intent to supply recycled commercial plastics to industries such as the
automotive and consumer products industries, and it plans to construct
large-scale plastics recycling facilities near automotive shredder locations
nationwide. Operating in conjunction with large national recycling partners, the
Company using a patent pending process developed in conjunction with Thar
Process, Inc. will produce recycled commercial grade plastics ready to be
re-introduced into commerce. Additionally, the Company will convert waste and
scrap plastic into high-value energy products, including synthetic
oil.
On
September 22, 2009, the Company changed its name to Green EnviroTech
Corp.
Going
Concern
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated revenues since
inception and has generated losses totaling $96,935 in their initial period, and
needs to raise additional funds to carry out their business plan. The
continuation of the Company as a going concern is dependent upon the continued
financial support from its shareholders, and the ability of the Company to
obtain necessary equity financing to continue operations. The Company has had
very little operating history to date. These financial statements do not include
any adjustments to the recoverability and classification of recorded asset
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern. These factors raise
substantial doubt regarding the ability of the Company to continue as a going
concern.
Besides
generating revenues from proposed operations, the Company may need to raise
additional capital to expand operations to the point at which the Company can
achieve profitability. The terms of equity that may be raised may not be on
terms acceptable by the Company. If adequate funds cannot be raised outside of
the Company, the Company’s officers and directors may need to contribute funds
to sustain operations.
F-23
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Development Stage
Company
The
Company is considered to be in the development stage as defined in Statement of
Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by
Development Stage Enterprises”. The Company has devoted substantially all
of its efforts to the corporate formation and the raising of
capital.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Cash and Cash
Equivalents
The
Company considers all highly liquid debt instruments and other short-term
investments with maturity of three months or less, when purchased, to be cash
equivalents.
The
Company maintains cash and cash equivalent balances at one financial institution
that is insured by the Federal Deposit Insurance Corporation.
Fixed
Assets
Although
the Company does not have any fixed assets at this point, any fixed assets
acquired in the future will be stated at cost, less accumulated depreciation.
Depreciation will be provided using the straight-line method over the estimated
useful lives of the related assets. Costs of maintenance and repairs will be
charged to expense as incurred.
Recoverability of Long-Lived
Assets
Although
the Company does not have any long-lived assets at this point, for any
long-lived assets acquired in the future the Company will review their
recoverability on a periodic basis whenever events and changes in circumstances
have occurred which may indicate a possible impairment. The assessment for
potential impairment will be based primarily on the Company’s ability to recover
the carrying value of its long-lived assets from expected future cash flows from
its operations on an undiscounted basis. If such assets are determined to be
impaired, the impairment recognized is the amount by which the carrying value of
the assets exceeds the fair value of the assets. Fixed assets to be disposed of
by sale will be carried at the lower of the then current carrying value or fair
value less estimated costs to sell.
F-24
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Fair Value of Financial
Instruments
The
carrying amount reported in the balance sheet for cash and cash equivalents,
accounts payable, and accrued expenses approximate fair value because of the
immediate or short-term maturity of these financial instruments. The Company
does not utilize derivative instruments.
Income
Taxes
The
Company accounts for income taxes utilizing the liability method of
accounting. Under the liability method, deferred taxes are determined
based on differences between financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in years in which differences are
expected to reverse. Valuation allowances are established, when
necessary, to reduce deferred tax assets to amounts that are expected to be
realized.
Revenue
Recognition
The
Company will generate revenue from the sales in accordance with Staff Accounting
Bulletin 101. The criteria for recognition are as follows:
1)
|
Persuasive
evidence of an arrangement exists;
|
2)
|
Delivery
has occurred or services have been
rendered;
|
3)
|
The
seller’s price to the buyer is fixed or determinable,
and
|
4)
|
Collectable
is reasonably assured.
|
The
Company anticipates that the plastics that are recovered will be their main
source of revenue, with the automotive parts manufacturers being the primary
market. However, the use of the Company’s recycled materials is not limited to
just automotive parts, therefore the Company will market numerous other
industries both domestically and internationally.
In
addition, the Company believes that they will generate revenue from joint
ventures with companies in the waste oil and waste plastics recycling
businesses, including royalties generated by the sale of synthetic oil products
developed by the joint venture partners.
F-25
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
(Loss) Per Share of Common
Stock
Basic net
loss per common share is computed using the weighted average number of common
shares outstanding. Diluted earnings per share (EPS) include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants. Common stock
equivalents are not included in the computation of diluted earnings per share
when the Company reports a loss because to do so would be anti-dilutive for
periods presented. The following is a reconciliation of the computation for
basic and diluted EPS:
December
31,
|
||||
2008
|
||||
Net
loss
|
$ | (96,935 | ) | |
Weighted-average
common shares
|
||||
outstanding
(Basic)
|
8,823,529 | |||
Weighted-average
common stock
|
||||
Equivalents
|
||||
Stock
options
|
- | |||
Warrants
|
- | |||
Weighted-average
common shares
|
||||
outstanding
(Diluted)
|
8,823,529 |
Uncertainty in Income
Taxes
In July
2006, the FASB issued Interpretation No. 48 (FIN No. 48), “Accounting for
Uncertainty in Income Taxes.” This interpretation requires recognition and
measurement of uncertain income tax positions using a “more-likely-than-not”
approach. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. Management has adopted FIN 48 for 2007, and they evaluate their tax
positions on an annual basis, and has determined that as of December 31, 2008,
no additional accrual for income taxes is necessary.
F-26
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards
In
September 2006, the FASB issued SFAS 157, “Fair Value Measurements.” This
standard defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosure about fair
value measurements. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007. Early adoption is
encouraged. The adoption of SFAS 157 is not expected to have a material impact
on the financial statements.
In
February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of FASB Statement No.
115”, (“FAS 159”) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. FAS 159 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent,
changes in a parent’s ownership of a noncontrolling interest, calculation and
disclosure of the consolidated net income attributable to the parent and the
noncontrolling interest, changes in a parent’s ownership interest while the
parent retains its controlling financial interest and fair value measurement of
any retained noncontrolling equity investment.
SFAS 160
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited. Management is determining the impact that the adoption of SFAS
No. 160 will have on the Company’s financial position, results of operations or
cash flows.
In
December 2007, the FASB issued SFAS 141R, Business Combinations (“SFAS
141R”), which replaces FASB SFAS 141, Business
Combinations. This Statement retains the fundamental
requirements in SFAS 141 that the acquisition method of accounting be used for
all business combinations and for an acquirer to be identified for each business
combination.
F-27
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards (Continued)
SFAS 141R
defines the acquirer as the entity that obtains control of one or more
businesses in the business combination and establishes the acquisition date as
the date that the acquirer achieves control. SFAS 141R will require
an entity to record separately from the business combination the direct costs,
where previously these costs were included in the total allocated cost of the
acquisition. SFAS 141R will require an entity to recognize the assets
acquired, liabilities assumed, and any non-controlling interest in the acquired
at the acquisition date, at their fair values as of that date. This
compares to the cost allocation method previously required by SFAS No.
141. SFAS 141R will require an entity to recognize as an asset or
liability at fair value for certain contingencies, either contractual or
non-contractual, if certain criteria are met. Finally, SFAS 141R will
require an entity to recognize contingent consideration at the date of
acquisition, based on the fair value at that date. This Statement
will be effective for business combinations completed on or after the first
annual reporting period beginning on or after December 15,
2008. Early adoption of this standard is not permitted and the
standards are to be applied prospectively only. Upon adoption of this
standard, there would be no impact to the Company’s results of operations and
financial condition for acquisitions previously completed. The
adoption of SFAS No. 141R is not expected to have a material effect on the
Company’s financial position, results of operations or cash flows.
In
December 2007, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 110, “Use of a Simplified Method in Developing Expected Term of
Share Options” (“SAB 110”). SAB 110 expresses the current view of the
staff that it will accept a company’s election to use the simplified method
discussed in Staff Accounting Bulletin 107, Share Based Payment, (“SAB
107”), for estimating the expected term of “plain vanilla” share options
regardless of whether the company has sufficient information to make more
refined estimates. SAB 110 became effective for the Company in
2008. The adoption of SAB 110 is not expected to have a material
impact on the Company’s financial position.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS 161”).
SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging
activities. These enhanced disclosures will discuss: how and why an entity uses
derivative instruments; how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations; and how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. The Company does not believe that SFAS 161 will have an impact on
their results of operations or financial position.
F-28
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
2-
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
|
Recent Issued Accounting
Standards (Continued)
In April
2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible
Assets”. The Company was required to adopt FSP 142-3 on October 1, 2008. The
guidance in FSP 142-3 for determining the useful life of a recognized intangible
asset shall be applied prospectively to intangible assets acquired after
adoption, and the disclosure requirements shall be applied prospectively to all
intangible assets recognized as of, and subsequent to, adoption. The Company
does not believe FSP 142-3 will materially impact their financial position,
results of operations or cash flows.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162). SFAS 162 makes the hierarchy of generally
accepted accounting principles explicitly and directly applicable to preparers
of financial statements, a step that recognizes preparers’ responsibilities for
selecting the accounting principles for their financial statements. The
effective date for SFAS 162 is 60 days following the U.S. Securities and
Exchange Commission’s approval of the Public Company Accounting Oversight
Board’s related amendments to remove the GAAP hierarchy from auditing standards,
where it has resided for some time. The adoption of SFAS 162 will not have an
impact on the Company’s results of operations or financial
position.
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of SFAS No. 60” (SFAS 163). SFAS 163
prescribes accounting for insures of financial obligations, bringing consistency
to recognizing and recording premiums and to loss recognition. SFAS 163 also
requires expanded disclosures about financial guarantee insurance contracts.
Except for some disclosures, SFAS 163 is effective for financial statements
issued for fiscal years beginning after December 15, 2008. The adoption of SFAS
163 will not have an impact on the Company’s results of operations or financial
position.
In May
2009, the FASB published SFAS No. 165, “Subsequent Events” (“SFAS 165”). SFAS
165 requires the Company to disclose the date through which subsequent events
have been evaluated and whether that date is the date the financial statements
were issued or the date the financial statements were available to be issued.
SFAS 165 is effective for financial periods ending after June 15, 2009.
Management has adopted SFAS 165 for their report for December 31, 2008 and has
evaluated subsequent events through October 7, 2009, the date the financial
statements were issued.
Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.
F-29
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
3-
|
STOCKHOLDERS’ EQUITY
(DEFICIT)
|
The
Company was established with two classes of stock, common stock – 500,000,000
shares authorized at a par value of $0.001; and preferred stock – 100,000,000
shares authorized at a par value of $0.001.
At
inception, the Company issued 8,823,529 shares of common stock to the Company’s
founders at inception for $30,000 cash and $58,235 for services rendered, all
shares issued at $0.01 per share. The $30,000 was cash paid directly from a
founder for expenses related to the start-up of the company as well as
establishing relationships for the company’s business.
As of
December 31, 2008, the Company has these 8,823,529 shares of common stock issued
and outstanding.
The
Company has not issued any preferred stock, options or warrants to
date.
NOTE
4-
|
LOAN PAYABLE – RELATED
PARTY
|
The
Company has an unsecured, loan payable in the form of a line of credit with
their President. The President has provided a line of credit up to $200,000 at
4% interest per annum to the Company to cover various expenses until the Company
can be funded. The President advanced $8,642 through December 31, 2008. The
interest accrued for the period October 6, 2008 (inception) through December 31,
2008 is $58.
NOTE
5-
|
PROVISION FOR INCOME
TAXES
|
Deferred
income taxes are determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities. Deferred income taxes are measured
based on the tax rates expected to be in effect when the temporary differences
are included in the Company’s tax return. Deferred tax assets and
liabilities are recognized based on anticipated future tax consequences
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.
As of
December 31, 2008, there is no provision for income taxes, current or
deferred.
Net
operating losses
|
$ | 32,958 | ||
Valuation
allowance
|
(32,958 | ) | ||
$ | - |
F-30
GREEN
ENVIROTECH CORP.
(FORMERLY
ENVIROPLASTICS CORPORATION)
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2008
NOTE
5-
|
PROVISION FOR INCOME
TAXES (CONTINUED)
|
At
December 31, 2008, the Company had a net operating loss carry forward in the
amount of $96,935, available to offset future taxable income through
2028. The Company established valuation allowances equal to the full
amount of the deferred tax assets due to the uncertainty of the utilization of
the operating losses in future periods.
A
reconciliation of the Company’s effective tax rate as a percentage of income
before taxes and federal statutory rate for the period October 6, 2008
(inception) through December 31, 2008 is summarized below.
Federal
statutory rate
|
(34.0 | )% | ||
State
income taxes, net of federal benefits
|
0.0 | |||
Valuation
allowance
|
34.0 | |||
0 | % |
NOTE
6-
|
FAIR VALUE MEASUREMENTS |
In 2008,
the Company adopted SFAS 157. SFAS 157 defines fair value, provides a consistent
framework for measuring fair value under generally accepted accounting
principles and expands fair value financial statement disclosure requirements.
SFAS 157’s valuation techniques are based on observable and unobservable inputs.
Observable inputs reflect readily obtainable data from independent sources,
while unobservable inputs reflect our market assumptions. SFAS 157 classifies
these inputs into the following hierarchy:
Level 1
inputs: Quoted prices for identical instruments in active markets.
Level 2
inputs: Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
Level 3
inputs: Instruments with primarily unobservable value drivers.
NOTE
7-
|
SUBSEQUENT
EVENTS
|
In
November 2009, the Company entered into an Agreement and Plan of Merger
(“Agreement”) with Wolfe Creek Mining, Inc. (“Wolfe Creek”) by which the Company
will exchange 100% of their issued and outstanding shares for 3,000,004 shares
of Wolfe Creek. There will be an acquisition subsidiary formed to complete the
transaction which will be in the form of a reverse triangular merger. The
Company will be the accounting acquirer in the transaction.
On
September 22, 2009, the Company changed their name to Green EnviroTech
Corp.
F-31