Attached files
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
____________________________________________________
AMENDMENT NO. 2 TO FORM 10-K
____________________________________________________
(Mark One) | |
x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
The Fiscal Year Ended December 31, 2008
o
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TRANSITION
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
FOR THE
TRANSITION PERIOD FROM ______ TO ________
Commission
File No. 333-148661
GREEN
ENERGY LIVE, INC.
|
|
(Exact
name of issuer as specified in its charter)
|
|
Nevada
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33-1155965
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1740
44th Street, Suite 5-230
Wyoming,
MI
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49519-6443
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (866)
460-7336
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|
Securities
registered under Section 12(b) of the Exchange Act:
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None
|
Securities
registered under Section 12(g) of the Exchange Act:
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Common
stock, par value $0.0001 per share.
|
(Title
of class)
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yesx No o
Indicate
by check mark whether the registrant is a large accelerate filer, an accelerated
filer, a non-accelerated flier, or a smaller reporting
company.
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
|
Smaller
reporting company
|
x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No
x
State
issuer’s operating revenue for its most recent fiscal year:
$0.
Number of
the issuer’s Common Stock outstanding as of March 31, 2009 is
38,205,938 shares
of common stock.
The
aggregate market value of the registrant’s common stock held by non-affiliates
of the registrant, as of December 31, 2008 was $14,189,721.00
Documents
incorporated by reference: None.
Transitional
Small Business Disclosure Format (Check One): Yesx Noo
EXPLANATORY
NOTE
We are
filing this Amendment No. 2 on Form 10-K/A (the “Amendment”) to amend the
Green Energy Live, Inc. Annual Report on Form 10-K for the year ended
December 31, 2008 (the “Report”), which was originally filed with the U.S.
Securities and Exchange Commission on March 31, 2009 (the “Original Form 10-K”).
This Amendment is being filed to (i) expand the disclosure in the Management’s
Discussion and Analysis of Financial Condition and Results of Operations section
for changes between periods in our financial statement line items, (ii) expand
the disclosure in the Management’s Discussion and Analysis of Financial
Condition and Results of Operations section for our anticipated source of funds
needed for our planned development and current operating activities, (iii)
expand the disclosure in the Management’s Discussion and Analysis of Financial
Condition and Results of Operations section to discuss the changes in our
operating, investing and financing cash flows, (iv) amend the information
contained in Item 9A of the Original Filing, (v) and lastly to reflect the
correct Audit Report date.
We
previously filed an Amendment No. 1 (the “Amendment No. 1”) on September 4, 2009
on Form 10-K/A to our Annual Report on Form 10-K for the year ended December 31,
2008 (the “Original Form 10-K”), which was filed with the Securities Exchange
Commission on March 31, 2009. Amendment No. 1 was filed to change the check mark
on the Form 10-K cover page, from Yes to No, for the information on whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).
This
Amendment sets forth the full text of the Annual Report on Form 10-K for the
financial year ended December 31, 2008 in its entirely. However, this
Amendment does not affect the original financial statements or footnotes set
forth in the Original Form 10-K.
This
Amendment does not reflect events occurring after the filing of the Original
Form 10-K and no attempt has been made in this Amendment to modify or update
other disclosures affected by subsequent events. Accordingly, this Amendment
should be read in conjunction with our filings with the SEC subsequent to the
filing of the Original Form 10-K.
1
Green
Energy Live, Inc.
Annual
Report on Form 10-K
TABLE
OF CONTENTS
Part I
Item
1
|
Business
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3
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Item 1A
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Risk
Factors
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3
|
Item
2
|
Properties
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4
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Item
3
|
Legal
Proceedings
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5
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Item
4
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Submission
of Matters to a Vote of Security Holders
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5
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Part
II
Item
5
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Market
for Registrant’s Common Equity, Related Stockholder Matters, and Issuer
Purchase of Equity Securities
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6
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Item
6
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Selected
Financial Data
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6
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Item
7
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Management’s
Discussion and Analysis of Financial Condition and Plan of
Operation
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7
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Item
7A.
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Quantitative
and Qualitative Disclosures About Market Risk
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10
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Item
8
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Financial
Statements and Supplementary Data
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11
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Item
9
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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11
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Item
9A
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Controls
and Procedures
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11
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Part
III
Item
10
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Directors,
Executive Officers, and Corporate Governance
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14
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Item
11
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Executive
Compensation
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15
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Item
12
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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16
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Item
13
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Certain
Relationships and Related Transactions, and Director
Independence
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17
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Item
14
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Principal
Accountant Fees and Services
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17
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Part
IV
Item
15
|
Exhibits,
and Financial Statement Schedules
|
17
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SIGNATURES |
2
Forward-Looking
Statements
In addition to historical
information, this Annual Report on Form 10-K contains forward-looking
statements, including statements regarding product plans, future growth and
market opportunities which involve risks and uncertainties that could cause
actual results to differ materially from these forward-looking statements.
Factors that might cause or contribute to such differences include, but are not
limited to, those discussed under Item 1A, Risk Factors. You should carefully
review the risks described herein and in other documents we file from time to
time with the Securities and Exchange Commission (“SEC”), including the
Quarterly Reports on Form 10-Q to be filed in 2009. When used in this report,
the words “expects,” “could,” “would,” “may,” “anticipates,” “intends,” “plans,”
“believes,” “seeks,” “targets,” “estimates,” “looks for,” “looks to” and similar
expressions, as well as statements regarding our focus for the future, are
generally intended to identify forward-looking statements. You should not place
undue reliance on these forward-looking statements which speak only as of the
date of this Annual Report on Form 10-K. We undertake no obligation to publicly
release any revisions to the forward-looking statements or reflect events or
circumstances after the date of this document.
PART
I
Item
1. Description of Business.
We are a
development stage enterprise. We are a renewable energy technology company
focused on developing and commercializing energy conversion technology in the
emerging field of fossil fuel alternatives. Now that our company has
completed the requirements to be a publicly traded company, we are moving to the
next step of the Company’s development, which is to acquire profitable companies
that will leverage the technology that we have developed in the green energy
field. We have access to a proprietary prospecting system that
reviews dozens of companies on a monthly basis and we have signed Letters of
Intent to acquire two companies that will help us get our “biomass to green
energy” system developed and in place. These selected, profitable
companies have been in business over 19 and 3 years respectively. We
plan to complete the due diligence phase of these acquisitions in the first half
of 2009.
We have
developed, acquired and maintain a portfolio of pending patents and patent
applications that form the proprietary base for our research and development
efforts in the area of renewable energy research. We believe that our
intellectual property represents one of the strongest portfolios in the field.
This technology base will provide a competitive advantage and will facilitate
the successful development and commercialization of techniques and devices for
use in a wide array of alternative energy approaches including bio-fuels,
advanced fermentation, and a novel solar thermoelectric power generation
technology.
Our
belief that our intellectual property pipeline represents one of the strongest
portfolios in the field is supported by:
*
|
the
pace of filing and the focus of the portfolio,
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*
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the
relative immaturity of this field of study, and
|
*
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the
limited number of truly competitive portfolios of intellectual
property.
|
Alternative
energy source creation is a constantly growing field that is relatively new,
involving the development of techniques based on advances in biotechnology and
material science. We have developed and maintain a comprehensive portfolio with
ownership or exclusive licensing of pending patents in the field of chemical
processing and related technologies.
There are
strong competitors in our field, but currently, there are only a limited number
of companies fully operational in this field. Our intellectual property
portfolio and development pipeline compares favorably with those of our
competition based on market research and industry analysis that we have
conducted this past year.
All of
our research efforts to date are at the level of basic research or in the
prototype stage of development. We are focused on leveraging our key assets,
including our intellectual property, our engineering team, our market insight
and our capital, to accelerate the advancement of our two basic technologies. In
addition, we are pursuing strategic collaborations with members of academia,
industry and foundations to further accelerate the pace of our research efforts.
We are currently headquartered in Wyoming, Michigan (near Grand Rapids,
Michigan).
Item
1A. Risk Factors
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. Please note that throughout this prospectus, the words
”GEL”, “we”, “our” or “us” refer to the Company and not to the
selling stockholders.
Currently
the Company is relying on the private placement of restricted stock to fund
ongoing developmental activities. The announced acquisitions are
planned to be funded by the Company’s plan to register and sell an additional
20,000,000 Green Energy Live, Inc. common shares with the Securities Exchange
Commission. This industry segment, in general, could be impacted by
incentives and market influences from the U.S. Government and its push towards a
“green economy”. The Company plans to pursue its acquisitions and
development products independently of any subsidies from any government entity,
since such subsidies are subject to the political whims of change outside of the
Company’s influence. The Company perceives the sustainability of
government subsidies to be too risky to rely on for its business planning and
funding planning.
3
We have a
limited operating history that you can use to evaluate us, and the likelihood of
our success must be considered in light of the problems, expenses, difficulties,
complications and delays that we may encounter because we are a small
development stage company. As a result, we may not be profitable and
we may not be able to generate sufficient revenue to develop as we have
planned.
Since
inception, the Company has been engaged in product development and
pre-operational activities. If we cannot generate revenue, we may have to alter
or delay implementing our plan of operations. We will require additional
financing which may require the issuance of additional shares that will dilute
the ownership held by our stockholders. We will require significant
financing to achieve our current business strategy and our inability to obtain
such financing could prohibit us from executing our business plan and cause us
to slow down our expansion of operations.
There are
significant regulatory restrictions in the production of bio-fuels, which is the
main focus of our business. There are governmental, safety, and industry
standards that must be met in order for our products to be available for sale in
the market. Failure to adhere or meet these standards will delay or
prevent revenue or sales for our Company. Finding the appropriate
personnel who understand these standards is crucial to the survival of the
Company.
We have
not paid any dividends on our common stock in the past, and do not anticipate
that we will declare or pay any dividends in the foreseeable future.
Consequently, you will only realize an economic gain on your investment in our
common stock if the price appreciates. You should not purchase our common stock
expecting to receive cash dividends. Therefore our failure to pay dividends may
cause you to not see any return on your investment even if we are successful in
our business operations. In addition, because we do not pay dividends we may
have trouble raising additional funds which could affect our ability to expand
our business operations.
Our
common stock is considered a penny stock, which is subject to restrictions on
marketability, so you may not be able to sell your shares. If our common
stock becomes tradable in the secondary market, we will be subject to the penny
stock rules adopted by the Securities and Exchange Commission that require
brokers to provide extensive disclosure to their customers prior to executing
trades in penny stocks. These disclosure requirements may cause a reduction in
the trading activity of our common stock, which in all likelihood would make it
difficult for our stockholders to sell their securities.
The
Company continues to operate with a limited amount of staff which may hinder the
progress of the Company forward with its business plan. The Company
anticipates being able to add key personnel in the finance, technology and
marketing areas in 2009, that will help move the Company toward accomplishing
its stated objectives.
Our
future success is dependent, in part, on the performance and continued service
of Karen Clark, our Chief Executive Officer. Without her continued service, we
may be forced to interrupt or eventually cease our operations. The loss of
her services would delay our business operations substantially.
Our
business is greatly dependent on our ability to attract key personnel. We will
need to attract, develop, motivate and retain highly skilled technical
employees. Competition for qualified personnel is intense and we may not be able
to hire or retain qualified personnel. Our management has limited experience in
recruiting key personnel which may hurt our ability to recruit qualified
individuals. If we are unable to retain such employees, we will not be able to
implement or expand our business plan.
Item
2. Properties.
Intellectual
Property (Patents Pending)
1)
|
Sensor
Wand, and Composting Apparatus Including Same Docket # 0196-05UA;
Application # 10/998,074; Filing Date November 26,
2004.
|
2)
|
Methane
Accumulator System for Septic Tanks Docket # 0196-06PPA; Application #
60/963,750; Filing Date August 7,
2007.
|
3)
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Direct
Steam Injection Heater with Integrated Reactor and Boiler U.S. Serial No.
11877059; Filing Date October 23,
2007.
|
Our
research and development is supported by a broad intellectual property
portfolio. We currently own or have exclusive ownership of three patent
applications pending in the field of chemical process
technology. Our success will likely depend upon our ability to
preserve our proprietary technologies and operate without infringing the
proprietary rights of other parties. However, we may rely on certain proprietary
technologies and know-how that are not patentable. We protect our proprietary
information, in part, by the use of confidentiality agreements with our
employees, consultants and certain of our contractors.
4
We
maintain a disciplined patent policy and, when appropriate, seek patent
protection for inventions in our core technologies and in ancillary technologies
that support our core technologies or which we otherwise believe will provide us
with a competitive advantage. We pursue this strategy by filing patent
applications for discoveries we make, either alone or in collaboration with
collaborators and strategic partners. We plan to obtain licenses or options to
acquire licenses to patent filings from other individuals and organizations that
we anticipate could be useful in advancing our research, development and
commercialization initiatives and our strategic business interests.
The
fundamental consequence of patent expiration is that the invention covered by
that patent will enter the public domain. However, the expiration of patent
protection, or anticipated patent protection, for most of our portfolio is not
scheduled to begin for approximately twenty years. Due to the rapid pace of
technology development in this field, and the volume of intellectual property
that we anticipate will be generated over the next decade, it is unlikely that
the expiration of any existing patents or patent rights would have an adverse
affect on our business. Due to our current stage of development, our existing
patent application portfolio is not currently supporting a marketed product, so
we will not suffer from any reduction in product revenue from patent expiration.
Any actual products that we develop are expected to be supported by intellectual
property covered by current patent applications that, if granted, would not
expire for twenty years from the date first filed. Patent #1, the
Sensor Wand, has initially been rejected by the U.S. Patent Office as too
similar to a previous patent. The Company is appealing this decision
and has retained the services of its Patent Attorney to represent the Company in
this appeal process.
Physical
Property
Our
company currently does not own any physical property. The company did
not purchase or sell any plant or equipment in 2008.
Item
3. Legal Proceedings.
We are
not engaged in any litigation, and we are unaware of any claims or complaints
that could result in future litigation.
Item
4. Submission of Matters to a Vote of Security
Holders.
None
5
PART
II
Item
5. Market for Registrant’s Common Equity and Related
Stockholder Matters and Issuer Purchase of Equity
Securities
Market
for Common Equity
Since
November 19, 2008, our common stock has been quoted on the OTC Bulletin Board
under the symbol "GELV.OB." The following table sets forth, for the fiscal
quarters indicated, the high and low bid prices. These quotations
reflect the closing inter-dealer prices, without mark-up, mark-down or
commission, and may not represent actual transactions.
High
and Low Sales Prices
|
||||||||
2008
|
||||||||
High
|
Low
|
|||||||
Fourth
Quarter
|
$ | 3.00 | $ | 3.00 |
As of
December 31, 2008, we have 37,929,907 shares of our common stock issued and
outstanding. Our shares of common stock are held by 248 stockholders of record.
The number of stock holders of record was determined from the records of our
transfer agent and does not include beneficial owners of our common stock whose
shares are held in the names of various securities brokers, dealers, and
registered clearing agencies.
We have
never declared or paid any cash dividends on our common stock. We do not
anticipate paying any cash dividends to stockholders in the foreseeable future.
In addition, any future determination to pay cash dividends will be at the
discretion of our Board of Directors and will be dependent upon our financial
condition, results of operations, capital requirements, and such other
factors as the board deems relevant.
Issuer
Purchase of Equity Securities
During
the fiscal year that ended December 31, 2008, Green Energy Live, Inc., did not
repurchase any of its equity securities.
Recent
Sales of Unregistered Securities
During
2008, we made sales to investors outside of the United States under Regulation
S, rule 903, under the 1933 Securities Act. Approximately 1,016,000
shares were sold to 110 stockholders in 162 transactions for the
approximate share price of $0.2972, as received by Green Energy Live,
Inc. These shares will not be available to be resold by the investors
until 1 year after purchase.
We relied
upon the exemption from registration as set forth in Regulation S of the
Securities Act for the issuance of these shares. The stockholders are not a
"U.S. Person" as that term is defined in the Securities Act, and at the time of
the offering and issuance of the shares, the stockholders were located outside
of the United States. In addition, the stockholders took the shares for
investment purposes without a view to distribution and had access to information
concerning the Company and our business prospects, and were permitted access to
the Company's management for the purpose of acquiring investment information, as
required by the Securities Act. Further, there was no general solicitation or
advertising for the issuance of the shares. The Company issued the shares
without compliance with the registration requirements of the Securities Act in
reliance upon the exemptions therefrom afforded by Section 4(2) and Regulations
D thereunder as well as Regulation S.
Item
6. Selected Financial Data
Not
applicable for smaller reporting company.
6
Item
7. Management’s Discussion and Analysis of Financial Conditions
and Plan of Operations.
In 2008,
our Company went through the registration process to become a publicly traded
company. During this process, by the nature of the requirements of this process,
the Company was in a “quiet” period and had to conserve resources, so
development projects were delayed until we received approval of our Form 15c211
application. We intend to hire a qualified individual to fill the role of our
Chief Financial Officer and are looking for a suitable individual for that
position. Once we have hired a Chief Financial Officer, that person shall be
charged with the responsibility of all of the financial operations, ensuring
that we are in compliance with regard to all financial matters and filings, as
well as all Sarbanes Oxley requirements. Locating a qualified individual to fill
the role of our Chief Financial Officer is a priority for the
Company.
Plan
of Operations
In April
2008, we signed an agreement with a third party to place 3,000,000 shares of our
common stock for sale to that third party’s clients at an issuance of $1.50 per
share, of which we received a per share amount after payment of negotiated
placement costs. These funds were used for our development and ongoing
activities during 2008. Approximately 324,166 shares were issued with
this agreement until it was closed in July 2008.
Once our
Form 15c211 application was approved, effective September 10, 2008, and we
became a fully reporting, publicly traded company, we signed a new agreement
with a third party to place an additional 3,000,000 shares of our common stock
for sale to that third party’s clients at an issuance price that would vary with
the market bid prices.
We intend
to hire a qualified individual to fill the role of Chief of Technology. We
plan to hire engineers and scientists in house or to contract certain research
and development efforts with trusted partners. In late 2009, we
expect to develop our prototype facility with trusted partners, which we
anticipate will cost up to $5,000,000. We expect to use $1,000,000 to
develop the current patents explained under the “Description of Property”
section of this year end report. The Company also expects to continue
to submit patent applications inspired by our research efforts at a conservative
rate of one per quarter, commencing the second half of Fiscal Year 2009. This
prediction is based on:
*
|
the
rate of progress in the program,
|
*
|
the
novel area of inventions,
|
*
|
the
past achievements of our intellectual property development
program.
|
By the
third quarter of 2009, we expect to be developing business units to utilize our
pending-patent bioreactor technology that targets the bioremediation market.
This technology has the flexibility to be applied across many industries and
thus broadening the prospective list of acquisitions. We plan to target
companies capable of leveraging the technology and capital, while also still
conforming to the financial selection criteria. This is a duplication
of the business development strategy planned for the biomass to business
unit. We will acquire an ongoing entity in each market, develop a
working prototype in each market and then implement the marketing plan for
penetration of our technology.
Our
strategy for acquiring existing entities is to give our Company the revenue
earned in the acquired entity and capital volume to be listed on the exchanges,
as well as to maximize shareholder value. We believe that such
acquisitions will allow us access to lower cost funding for future
growth. In 2009, we are targeting companies to acquire in the range
of $5 million to $25 million in annual revenue. As stated earlier in
this report, we have two companies under a Letter of Intent agreement that are
in the due diligence phase of this acquisition process. We continue
our proprietary prospecting system to seek other companies that are a good fit
for our business plan.
Ethanol
Plan
We plan
to create an economically sustainable, socially beneficial, environmentally
responsible agricultural development that uses an integrated approach to
resource management for the economic and social betterment of the world’s
farmers, rural communities, and citizens. The ethanol market is a
very high cost entry market at this current time. We are exploring
ways to produce ethanol with non food bio resources at a much smaller scale than
currently being done. One of our pending patent applications
addresses one of the phases of production that will allow for smaller scale and
thus lower cost operations. However, with the volatile crude oil
market swings of 2008, the Company is postponing any entry into the ethanol
production for 2009, until the market conditions for Ethanol
stabilize.
Bio-Waste
Plan
Green
Energy Live, Inc. is developing new technologies and along with America’s
farmers and livestock businesses, will be working together to provide “Green Energy” for our future
today. This market is currently barely addressed in the Green Energy
industry, thus there are very few competitors in this arena. The
Company has searched widely for an acquisition company in this market and has
been unable to locate any competitors that have done more an a one time
installation. Green Energy Live has targeted this part of the Green
Energy industry to concentrate our resources in 2009 because of the apparent
lack of competition.
7
With the
lower cost to produce facilities that use biomass waste, as well as the lack of
competitors in this market, Green Energy Live will have the ability to move in
this market and make a good market penetration to capture a large market
share.
The
recycling of diverse consumables, such as the re-use of cooking oils and that of
animal fats and their waste product, is one part of the bio-fuels innovations,
but there are other important aspects regarding this diversity we can also
appreciate. By using otherwise waste and by-products in this manner we do not
upset the ‘balance’ of the agricultural panoply. Animals raised and plants grown
that are already designated for human consumption are not in excess of current
needs. However, when it comes to growing crops for biomass fuels for specific
use, which unlike fossil fuels are not already there on tap, agricultural
planners and environmentalists need to take care that this particular form of
supply for modern energy production does not cause us unwanted
problems. In 2008, the price of corn went very high because of
ethanol production. This in turn, affected the price of food in the
United States as well as in other countries. This is not a
sustainable business model, thus Green Energy Live is turning to the use of
animal waste for the biomass fuel source. Not only does this animal
waste need to be handled to prevent it from contaminating the watersheds, but it
represents a cost to the animal farmers, ranchers and feed lot owners that
affect their profits. Using this animal waste to create energy,
instead, turns a cost to the operator into a potential profit center if enough
energy can be created to send out to the grid. At the very least,
this animal waste can be used to reduce their demand and cost for utilities,
thus reducing the overhead of their operations in two ways, eliminating the cost
to haul the animal waste off the land and reducing their demand for outside
electricity from the grid. There are very few companies offering
solutions in this market segment and Green Energy Live, Inc. has determined that
this is the best entry point for a new company with limited
resources.
Critical Accounting
Policies
Development
Stage Activities
The
Company is currently a development stage enterprise. All losses
accumulated since the inception of business have been considered as part of the
development stage activities.
The
accompanying financial statements have been prepared on the basis that the
Company will continue as a going concern, which assumes the realization of
assets and the satisfaction of liabilities in the normal course of
business. Since inception, the Company has been engaged in product
development and pre-operational activities. No operating revenue has
been generated and the Company has incurred accumulated losses and negative
operating cash flows of $1,354,879 and $851,119 respectively, for the period
from inception through December 31, 2008.
Capital
raised during the development stage period has been utilized to secure product
patents critical to the Company’s future growth and to facilitate the creation
of strategic plans that may include acquisitions in the Company’s target
industry, and/or having the ability to manufacture the Company’s patented
products.
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 disclosure 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.
Accounting
Period
The
Company has adopted a calendar year reporting period. These annual
financial statements are prepared in conjunction with the Company’s current
development stage activities.
Deferred
Costs of Developing Patents
The
Company has three patents pending final federal regulatory approval. In
accordance with Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible
Assets, these patent amounts, consisting of consulting and legal fees,
are stated at cost and are expected to be amortized over their regulatory life
if and when patent protection is granted by the United States Patent
office. As of December 31, 2008, the official patent authorization
had not been granted.
Equipment
and Depreciation
Equipment
is stated at cost. Depreciation is computed using the straight-line
method over the estimated useful lives of the related assets, which range from 3
to 7 years. Management periodically reviews these assets to determine
whether carrying values have been impaired.
8
Income
Taxes
Deferred
income tax assets and liabilities are computed annually for differences between
the financial statements and federal income tax basis of assets and liabilities
that will result in taxable or deductible amounts in the future, based on
enacted tax laws and rates applicable to the period in which the differences are
expected to affect taxable income. Deferred income tax benefits
result from net operating loss carryforwards. Valuation allowances
are established when necessary to reduce the deferred tax assets to the amount
expected to be realized. Due to the development stage nature of the
Company’s business, any deferred tax benefit from the anticipated utilization of
net operating losses generated during the interim period have been completely
offset by a valuation allowance. Income tax expense is the tax
payable or refundable for the period plus, or minus the change during the period
in deferred tax assets and liabilities.
Earnings
Per Common Share
Basic
earnings per share represents income available to common shareholders divided by
the weighted average number of common shares outstanding during each reporting
period. After each day with transactions of shares, the total number
of shares outstanding multiplied by the number of days until the next
transaction of shares, divided by the days in the reporting period. The weighted
average number of shares outstanding since inception was
36,100,073. The weighted number of shares outstanding for the
reporting periods of 2008 and 2007 were 37,215,240 and 34,930,585
respectively.
Recent Accounting
Pronouncements
In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141R, Business
Combinations (SFAS 141R), which replaces SFAS No. 141, Business Combinations. SFAS
No. 141R establishes principles and requirements for determining how an
enterprise recognizes and measures the fair value of certain assets and
liabilities acquired in a business combination, including non controlling
interests, contingent consideration, and certain acquired contingencies. SFAS
No. 141R also requires acquisition-related transaction expenses and
restructuring costs be expensed as incurred rather than capitalized as a
component of the business combination. SFAS No. 141R will be applicable
prospectively to business combinations beginning in the Company’s 2009 fiscal
year.
On March
19, 2008, the FASB issued Statement of Financial Accounting Standards No. 161
(SFAS No.161) Disclosures
about Derivative Instruments and Hedging Activities. The objective of
SFAS No. 161 is to enhance disclosures about an entity’s derivative and hedging
activities and thereby improve the transparency of financial reporting. SFAS No.
161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008 and is not expected to have a
significant impact on the Company’s financial statements.
In May
2008, the FASB issued Statement of Financial Accounting Standards No. 162 (SFAS
No.162) The Hierarchy of
Generally Accepted Accounting Principles. The objective of SFAS No. 162
is to identify the sources of accounting principles and the framework for
selecting the principles to be used in the preparation of financial statements
of nongovernmental entities that are presented in conformity with generally
accepted accounting principles (GAAP) in the United States (the GAAP hierarchy).
SFAS No. 162 is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles and is not
expected to have a significant impact on the Company’s financial
statements.
In
October 2008, the FASB staff issued Staff Position No. FSP 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active. FSP 157-3
clarifies the application of SFAS 157, which the Corporation adopted as of
January 1, 2007, in cases where a market is not active. The Company has
considered the guidance provided by FSP 157-3, which was effective on October
10, 2008, in its determination of estimated fair values as of December 31, 2008,
as applicable.
The FASB
Issued EITF No. 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities
in June 2008. FSP EITF 03-6-1 provides that unvested share-based payment
awards that contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) are participating securities and shall be included in
the computation of earnings per share pursuant to the two-class method. FSP EITF
03-6-1 will be effective on January 1, 2009. All previously reported earnings
per share data will be retrospectively adjusted to conform with the provisions
of FSP EITF 03-6-1. The Company is considering the impact of FSP EITF 03-6-1 on
its financial statements upon issuance of such share-based
payments.
Off-Balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
9
Results
of Operations
Revenues
–
Total
revenue for the year ended December 31, 2008 and the period from January 17,
2007 (date of inception) to December 31, 2007 was $16 and $122, respectfully,
solely consisting of interest income.
Total
Expenses –
Total
expenses were $658,930 the year ended December 31, 2008 compared to $696,087 for
the period from January 17, 2007 (date of inception) to December 31, 2007, an
decrease of $37,157 or 5%. The decrease in total expenses is
attributable to decreases in consulting fees to shareholders ($67,454) and loss
on disposal of asset ($5,975) offset by increases in professional fees ($11,959)
and general and administrative expenses ($24,313).
Liquidity
and Capital Resources
As of
December 31, 2008, we had cash of $4,467 and a deficit in working capital of
$326,349. This compares with cash of $31,916 and a surplus in working
capital of $28,419 as of December 31, 2007. Our cash used by
operations was $320,922 for the year ended December 31, 2008 versus cash used by
operations of $530,197 for the period from January 17, 2007 (date of inception)
to December 31, 2007. Our decrease in cash used by operations was
primarily due to an increase in accrued consulting fees to shareholders of
$330,000 offset by a reduction in the share-based payments of
$176,334. Our cash flow used in investing activities was $7,949 for
the year ended December 31, 2008, which primarily reflects deferred costs of
developing patents of $7,155, related to the development of biomass
technologies. Our cash used in investing activities of $104,589 for
the period from January 17, 2007 (date of inception) to December 31, 2007, which
primarily reflects deferred costs of developing patents of $68,390 and capital
expenditures of $36,199, related to the development of biomass technologies and
general equipment purchases, respectively. Our cash flow from
financing activities was $301,422 for the year ended December 31, 2008 versus
cash flow from financing activities of $666,702 for the period from January 17,
2007 (date of inception) to December 31, 2007, which primarily reflects cash
flow from the sale of common stock under a series of Regulation S agreements.
Much of Fiscal Year 2008 activity was concentrated on the application process
for the GELV trading symbol. This application was prepared during the first
quarter and filed just prior to the end of that quarter. Much of the
next two quarters were spent in the correspondence phase with FINRA, responding
to various questions submitted to us prior to issuing the GELV trading
symbol. During that time, we were required to defer raising funds through
new stock sales. The GELV trading symbol was issued in September,
2008. Once we were able to commence fund raising again, the capital markets
were noticeably slower than the prior year.
To date,
we have been financing our development activities through cash flows from the
sale of common stock under a series of Regulation S agreements. We
expect to finance our planned development and operating activities principally
through cash flows from further Regulation S common stock sales, issuance of
restricted common stock for various consulting services and cash flows from our
planned SEC stock registration stock sales. We anticipate that the
planned SEC stock registration will result in raising capital and facilitate
further stock sales. However, this plan is dependent upon approval of
the registration statement by the SEC and there is no guarantee this
registration will result in raising sufficient capital to meet our needs, if any
at all. We believe that cash to be generated from future financing
activities are adequate to satisfy our operating and capital expenditure
requirements for the foreseeable future. However, we may from time to
time, seek additional funding through a combination of new collaborative
agreements, strategic alliances and debt financing from other
sources.
Item
7A. Quantitative and Qualitative Disclosures About Market
Risk
Not
applicable for smaller reporting company.
10
Item 8. Financial
Statements.
The
financial statements and related notes are included as part of this Annual
Report as indexed in the appendix on page F-1 through F-9.
Item
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
We do not
presently intend to change accountants. At no time have there been
any disagreements regarding any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or
procedure.
Item
9A. Controls and Procedures.
Evaluation of Disclosure
Controls and Procedures
We
conducted an evaluation under the supervision and with the participation of our
management, of the effectiveness of the design and operation of our disclosure
controls and procedures. The term “disclosure controls and
procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other
procedures of a company that are designed to ensure that information required to
be disclosed by the company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and
forms. Disclosure controls and procedures also include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by a company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the company's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate, to allow timely decisions
regarding required disclosure. Based on this evaluation, our Chief Executive
Officer concluded as of December 31, 2008 that our disclosure controls and
procedures were not effective at the reasonable assurance level due to the
material weaknesses in our internal controls over financial reporting discussed
immediately below.
Management’s Report on
Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Our internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles. Our evaluation of internal control over financial
reporting includes using the COSO framework, an integrated framework for the
evaluation of internal controls issued by the Committee of Sponsoring
Organizations of the Treadway Commission, to identify the risks and control
objectives related to the evaluation of our control environment. The
internal controls for the Company are provided by executive management’s review
and approval of all transactions. Our internal control over financial
reporting also includes those policies and procedures that:
(1)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our
assets;
(2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with U.S. GAAP, and
that our receipts and expenditures are being made only in accordance with the
authorization of our management; and
(3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may
deteriorate.
Management
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2008. This Annual Report does not include an
attestation report of our registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject
to attestation by our registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permits us to provide only
management's report in this Annual Report.
11
Identified
Material Weaknesses
A
material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the financial statements will not be prevented or
detected.
Management identified the following
material weaknesses during its assessment of our internal control over financial
reporting as of December 31, 2008:
•
|
Policies
and Procedures for the Financial Close and Reporting Process — Currently
there are no written policies or procedures that clearly define the roles
in the financial close and reporting process. The various roles
and responsibilities related to this process should be defined,
documented, updated and communicated. Failure to have such
policies and procedures in place amounts to a material weakness to the
Company’s internal controls over its financial reporting
processes.
|
|
•
|
Accounting
and Finance Personnel Weaknesses — Our current accounting staff is
relatively small and we do not have the required infrastructure of meeting
the higher demands of being a U.S. public company. Due to the size of our
accounting staff, we have limitations in the segregation of duties
throughout the financial reporting processes. Due to the
pervasive nature of this issue, the lack of segregation of duties amounts
to a material weakness to the Company’s internal controls over its
financial reporting processes
|
|
|
|
|
• |
Lack
of functioning Audit Committee — Currently do not have an audit committee
member who has been designated or qualifies as a financial expert, and did
not have sufficient ongoing oversight by the
committee resulting in ineffective oversight in establishing
and monitoring of required financial reporting internal control
procedures.
|
|
•
|
The need to file this Amendment No. 2 on Form 10-K/A to remedy
certain required disclosure omissions as detailed in our Explanatory Note
at the beginning of this Amendment. |
12
Management’s
Remediation Initiatives
In light
of the foregoing, we plan to implement a number of remediation measures to
address the material weaknesses described above. These organizational
and process changes will improve our internal controls
environment. The changes made through the date of the filing of this
amended 10-K includes our retention of an outside Certified Public
Accounting firm to assist us in the evaluation and testing of our
internal control system and to identify improvement opportunities
related to our accounting and financial reporting processes in
order to streamline and improve the effectiveness of these
processes. The Company's remediation plans include complete
implementation and execution of controls and procedures identified in
management's assessment of the entity level, financial reporting and other
process level controls.
Management
recognizes that many of these enhancements require continual monitoring and
evaluation for effectiveness. The development of these actions is an
iterative process and will evolve as the Company continues to evaluate and
improve our internal controls over financial
reporting.
Management
plans to appoint an Audit Committee financial expert and have specified audit
committee meetings that ensure ongoing oversight by the
committee.
Management
will review progress on these activities on a consistent and ongoing basis at
the Chief Executive Officer and senior management level in conjunction with our
Board of Directors. We also plan to take additional steps to elevate
Company awareness about, and communication of, these important issues through
formal channels such as Company meetings, departmental meetings, and
training.
This
Annual Report does not include an attestation report of the company's registered
public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
company's registered public accounting firm pursuant to rules of the Securities
and Exchange Commission that permit the company to provide only management's
report in this Annual Report.
Conclusion
As a
result of management's assessment of the effectiveness of our internal control
over financial reporting as of December 31, 2008, and the identification of the
material weakness set forth above, management has concluded that our internal
control over financial reporting is not effective. It is reasonably
possible that, if not remediated, the material weaknesses noted above, could
result in a material misstatement in our reported financial statements that
might result in a material misstatement in a future annual or interim
period. In light of the identified material weakness and the
conclusion that our internal control over financial reporting is not effective,
management will take the remediation initiatives set forth
above.
Changes in Internal Control
over Financial Reporting
There
have been no changes in our internal controls over financial reporting that
occurred during our most recently completed fiscal quarter that have materially
affected or are reasonably likely to materially affect, our internal control
over financial reporting, as required by Rules 13a-15(d) and 15d-15(d) under the
Exchange Act.
13
PART
III
Item 10. Directors and Executive Officers of
the Registrant.
Our
executive officers and directors and their ages as of March 31, 2009 is as
follows:
NAME
|
AGE
|
POSITION
|
||
Keith
M.Field
|
56
|
Chairman
of the Board of Directors
|
||
Karen
E. Clark
|
54
|
President,
Chief Executive Officer, and Chief Financial Officer
|
||
Bill
McFarland
|
53
|
Director
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years.
Keith Michael Field, 56, Chairman of
the Board. Mr. Field is currently chairman of the Company. Mr.
Field has been the chief writer for several businesses and has developed and
written their business plans, marketing strategy and website content. Mr. Field
co-developed the current UAV VTOL military and civilian applications including
the concept of Pedestrian Proximity. As coordinator for the US Navy
CRADA Cooperative Research and Development Agreement from 2000-2004 he
prospected all CNC steel and composite parts vendors, design and aviation
engineers, business acquisitions and services and continues work with US NAVY
patent attorneys. Mr. Field has been a prospecting analyst and coordinator since
2000 having successfully prospected industry profiles in all 50 states in
manufacturing, communications, biotech, medical, real estate, finance, broker,
auto dealers, electric motors, production studios, satellite, timber, exotic
woods, PR firms and many more. In high tech marketing and sales for over 25
years and a manager for ITT 1995-96 and consultant for AT&T 1991-93, Mr.
Field majored in Architectural Engineering and received honors from Illinois
Institute of Technology. Mr. Field attended Drake University
where he majored in Business/Psychology. Mr. Field received/academic
scholarship to Loyola University’s Medical school and majored in
Bio/Psychology, completed internship program as Loyola counselor & staff,
studied Computer Science at Roosevelt University, Chicago. Finally, Mr.
Field has played stringed instruments since he was 5 and has owned a recording
studio for over 30 years. Mr. Field has composed, performed, and
produced 100s of songs, commercials and film scores from Pacific Bell and the LA
Lakers themes to Bay Watch, National Geographic and Pulp Fiction. Mr. Field owns
KMFMuzik and is a partner with TrackTown Records.
Karen E. Clark, 54, CEO /
Director. Karen has 30 years of industry and marketing
experience. She has a Bachelor of Engineering degree from Purdue University
and an MBA from Pepperdine University. She has held various staff and
management positions in leading edge technology companies in the aerospace,
automation and controls, automotive, financial, and the consumer goods
industries. For the past decade, Karen has owned and operated her own Management
Consulting Company working with start-up companies on strategic planning,
marketing, and internal operations.
14
Bill McFarland, 53,
Director. Mr. McFarland recently celebrated 30 years in the
automotive industry. He spent his first six years in sales and sales management
and the next eight years in finance & insurance, specializing in building
lending relationships between finance institutions and his customers. His
success in building these relationships resulted in record sales volume. Since
August 1990 Bill has purchased and operated 4 dealership facilities with seven
different automobile franchises in Chicago Illinois’ metro and suburban
markets. Since August 2006 Bill has been selling the last of his dealerships in
order to devote 100% of his time and energy on mergers and acquisitions along
with management and consulting for Green Energy Live, Inc.
Term
of Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our stockholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
Current
Issues and Future Management Expectations
No board
audit committee has been formed as of the filing of this Annual
Report.
Compliance
With Section 16(A) Of The Exchange Act.
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended December 31,
2008.
Code
of Ethics
The
Company is drafting a Code of Ethics applicable to its Directors, Chief
Executive Officer and Chief Financial Officer. This code of ethics is expected
to be in place by the end of the Second Quarter 2009.
Item
11. Executive Compensation
The table
below summarizes all compensation awarded to, earned by, or paid to our
executive officers by any person for all services rendered in all capacities to
us.
Name and Principal
Position
|
Bonus
|
Stock
Awards
($)
|
Option
Awards
($)
|
Totals
($)
|
|||||||||||||||||
Year
|
Salary
|
||||||||||||||||||||
Karen Clark, President, Chief Executive Officer, Director*
|
2008
|
$
|
125,000
|
N/A
|
N/A
|
N/A
|
$
|
125,000
|
|||||||||||||
Karen Clark, President, Chief Executive Officer, Director**
|
2007
|
$
|
56,000
|
N/A
|
N/A
|
N/A
|
$
|
56,000
|
|||||||||||||
Bill McFarland, Director
|
2008
|
$
|
-
|
N/A
|
N/A
|
N/A
|
$
|
-
|
|||||||||||||
Bill McFarland, Director
|
2007
|
$
|
-
|
N/A
|
N/A
|
N/A
|
$
|
-
|
|||||||||||||
Keith Field, Chairman of the Board of Directors***
|
2008
|
$
|
62,300
|
N/A
|
N/A
|
N/A
|
$
|
62,300
|
|||||||||||||
Keith Field, Chairman of the Board of Directors**
|
2007
|
$
|
53,000
|
N/A
|
N/A
|
N/A
|
$
|
53,000
|
* Of the
$125,000 in contractual compensation, only $55,000 was actually
received. The rest of the compensation was deferred until operational
cash flow improves.
** The
2007 figure was modified from the prior filing reflecting payments made through
an employee leasing service arrangement.
*** Of
the $60,000 in compensation, only $10,000 was actually received and $50,000 was
deferred until operational cash flow improves. The additional $2,300
was an expense reimbursement of the expense incurred setting up communications
with the various advisors that work with our shareholders. Mr. Field
also has a health insurance policy which is included in the employee leasing
contract.
Stock
Option Grants
None.
Employment
Agreements
We have
an employment agreement with our President and Chief Executive Officer, Karen
Clark. There are no other employment agreements in place for
2008. The terms of this employment agreement are:
15
Under the
terms of this agreement, Karen Clark is hereby appointed as President and Chief
Executive Officer of Green Energy Live Corporation, Inc., a company incorporated
in the state of Nevada. This agreement goes into effect on November
1st, 2007 and remains in effect until terminated or amended upon mutual
agreement of both parties. Either party may terminate the agreement as long as
30 days written notice is provided. Compensation will be paid during the 30 day
notice period.
Karen
Clark is contracted to perform various executive, accounting and administrative
tasks associated with operating and managing a public company and executing the
Business Plan. Ms. Clark will have full authority provided to an
officer of the corporation. Ms. Clark is also performing the Chief
Financial Officer responsibilities until additional staff is hired that can
assume this area of responsibility.
Karen
Clark will receive a monthly payment of $3,000. The first payment was due by
November 1st, 2007 directly from the Company and an additional $7,000 monthly
payment through an employee leasing agreement with HRMS. Should either party
terminate this agreement, payment will be made on a pro-rata basis for the 30
days following the termination date.
Upon
mutual agreement, Karen Clark may become an employee of GEL. In such a case,
this agreement is null and void and will be replaced by an employment agreement.
Until that time, Karen Clark is an independent contractor hired to fulfill the
official duties of President and CEO of GEL. This agreement replaces any and all
former agreements that exist between Karen Clark and GEL. In January,
2009, Karen Clark became an official employee of Green Energy Live, Inc. at a
monthly salary of $10,000. There are no additional benefits in the
compensation package at the present time.
Item
12. Security Ownership of Certain
Beneficial Owners and Management Related Stockholder
Matters.
The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding common stock as of December 31,
2008, and by the officers and directors, individually and as a group.
Except as otherwise indicated, all shares are owned directly.
Title
of Class
|
Name
and Address of Beneficial
Owner
|
Amount
and Nature of
Beneficial
Owner
|
Percent
of Class
|
|||||||
Common
Stock
|
Kaleidoscope,
Inc., Nevada
6757
Paljay Ct.
Las
Vegas, NV 89103
|
15,000,000 | 39.55 | % | ||||||
Common
Stock
|
The
Good One, Inc.
3540
West Sahara Avenue, Suite 657
Las
Vegas, NV 89102
|
15,000,000 | 39.55 | % | ||||||
Common
Stock
|
Keith
Field (Chairman)
|
2,000,000 | 5.27 | % | ||||||
Common
Stock
|
Bill
McFarland (Board Member)
|
1,000,000 | 2.64 | % | ||||||
Common
Stock
|
Karen
Clark (President, Chief Executive Officer, and Board
Member)
|
200,000 | 0.53 | % |
The
percent of class is based on 37,929,907 shares of common stock issued and
outstanding as of December 31, 2008.
Kaleidoscope
Real Estate, Inc. is a founding shareholder/member of Green Energy Live, Inc.
Currently it has no relationship other than incorporating the
Company.
The Good
One, Inc., has entered into a consulting agreement with Green Energy Live, Inc.
The consulting agreement was signed on January 11, 2007 for the purpose of
providing assistance with due diligence processes, capital structures, capital
resources, structuring and providing alternative sources for accounts
receivable, purchase order and other asset-based or cash flow financing;
identify and coordinate investor relations services; guidance and assistance in
available alternatives to maximize shareholder value; development of potential
strategic alliances, mergers and acquisitions; and periodic preparation and
distribution of research reports and other information to the investment banking
community. The compensation was $20,000 a month for six months commencing March
1, 2007, and was then converted to a month to month contract and is currently
ongoing at the same monthly compensation. The expense is included
with consulting fees to shareholders in the Statement of Operations in the
Company’s Financial Statements.
There are
no director fees for the members of the Board of Directors. There is
no other stated compensation for serving on the Board of Directors at this
time.
16
Item
13. Certain Relationships and Related Transactions, and
Director Independence.
There
were no transactions that, outside of fees paid for hours worked, occurred with
our officers or directors with the company. Furthermore, there were no
transactions between our officers or directors with the Company where 1) there
were no competitive bidding; 2) rates or charges was not fixed by law or
governmental authority; 3) the transaction did not involved services as a bank
depositary of funds, transfer agent, registrar, trustee under a trust indenture,
or similar services; 4) the amount involved exceeded $60,000; or 5) the interest
of the person rose beyond the ownership of securities of the Company and the
person received extra or special benefit that was not shared equally (pro rata)
by all holders of securities of the class.
Item
14. Principal Accounting Fees and
Services.
Audit
Fees
For our
fiscal year ended December 31, 2008 and 2007, we were invoiced approximately
$25,750 and $17,500, respectively for professional services rendered for the
audit of the Company’s annual statements and reviews of interim quarterly
financial statements included in the Company’s Forms 10-Qs in 2008.
Audit Related
Fees
Additional
audit fees of approximately $6,060 and $2,500 were invoiced for professional
services rendered related to SB-2 and Form 15c211 filings in 2008 and 2007
respectively. In addition, we were invoiced $14,350 in 2008 for
professional services rendered for acquisitions. For our fiscal
period ending December 31, 2007, we were not invoiced for professional services
rendered for audit related fees.
Tax Fees
For our
fiscal year ended December 31, 2007, we were invoiced approximately $185 for
professional services. Services performed related to research and
discussions of share based compensation. There were no tax fees
invoiced from our principal accountant for the year ended December 31,
2008.
All Other
Fees
The
Company incurred approximately $6,650 in other fees related to
services rendered by our principal accountant for the fiscal year ended December
31, 2007, principally related to accounting and research.
Pre-approval
Policy
Our Board
of Directors has adopted a procedure for pre-approval of all fees charged by the
our independent auditors. Under the procedure, the Board approves the engagement
letter with respect to audit, tax and review services. Other fees are subject to
pre-approval by the Board, or, in the period between meetings, by a designated
member of Board. Any such approval by the designated member is disclosed to the
entire Board at the next meeting. The audit and tax fees paid to the auditors
with respect to fiscal year 2008 and 2007 were pre-approved by the entire Board
of Directors.
Part
IV
Item
15. Exhibits, Financial Statement Schedules
a).
Documents filed as part of this Annual Report
1.
Financial Statements
2.
Financial Statement – not applicable
3. Exhibits
Exhibit
No.
|
Title
of Document
|
|
3.1
|
Articles
of Incorporation*
|
|
3.2
|
Bylaws
*
|
|
14
|
Code
of Ethics
|
|
31.1
|
Certification
of Karen Clark, Chief Executive Officer, and Chief Financial Officer of
Green Energy Live, Inc., pursuant to 18 U.S.C. §1350, as
adopted pursuant to §302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
|
Certification
of Karen Clark, Chief Executive Officer and Chief Financial Officer of
Green Energy Live, Inc., pursuant to 18 U.S.C. §1350, as
adopted pursuant to §906 of the Sarbanes-Oxley Act of
2002.
|
*
Incorporated by reference to Form SB-2, filed on January 15, 2008 (File
No. 333-148661)
17
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated:
December 31 , 2009
By /s/ KarenE. Clark
Karen E.
Clark,
President,
Chief
Executive Officer,
Principal
Accounting Officer
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature
|
Title
|
Date
|
||
/s/
Karen E. Clark
|
President,
|
December
31, 2009
|
||
Karen
E. Clark
|
Chief
Executive Officer,
Chief
Financial Officer, Principal Accounting Officer
|
|||
/s/
Keith Michael
Field
|
Chairman
of the Board of Directors
|
December
31, 2009
|
||
Keith
Michael Field
|
||||
/s/
Bill McFarland
|
Director
|
December
31, 2009
|
||
Bill
McFarland
|
||||
18
GREEN
ENERGY LIVE, INC.
(A
DEVELOPMENT STAGE ENTITY)
WYOMING,
MICHIGAN
FINANCIAL
STATEMENTS
YEAR
ENDED DECEMBER 31, 2008 AND
THE
PERIOD FROM JANUARY 17, 2007
(DATE
OF INCEPTION) TO
DECEMBER
31, 2007
GREEN
ENERGY LIVE, INC.
(A
DEVELOPMENT STAGE ENTITY)
TABLE
OF CONTENTS
PAGE
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Financial
Statements for the Year Ended December 31, 2008 and the Period
From
|
|
January
17, 2007 (Date of Inception) to December 31, 2007
|
|
Balance
Sheets
|
F-2
|
Statements
of Operations
|
F-3
|
Statements
of Stockholders’ (Deficit) Equity
|
F-4
|
Statements
of Cash Flows
|
F-5
|
Notes
to Financial Statements
|
F-6
to F-9
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders
and Board of Directors
Green
Energy Live, Inc.
Wyoming,
Michigan
We have
audited the accompanying balance sheet of Green Energy
Live, Inc. (a development stage entity) as of December 31, 2008 and 2007,
and the related statements of operations, stockholders’ (deficit) equity, and
cash flows for the year ended December 31, 2008 , and
the period from January 17, 2007 (date of inception) to December 31,
2007. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Green Energy
Live, Inc. as of December 31, 2008 and 2007 and the results of its
operations and its cash flows for the year ended December 31, 2008 and the
period from January 17, 2007 (date of inception) to December 31, 2007, in
conformity with accounting principles generally accepted in the United States of
America.
/s/
Rehmann Robson P.C.
Rehmann
Robson P.C.
Grand
Rapids, Michigan
March 31,
2009
F-1
GREEN
ENERGY LIVE, INC.
|
||||||||
(A
DEVELOPMENT STAGE ENTITY)
|
||||||||
BALANCE
SHEETS
|
||||||||
December
31
|
||||||||
ASSETS
|
2008
|
2007
|
||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$
|
4,467
|
$
|
31,916
|
||||
Other
assets
|
||||||||
Equipment
(net of accumulated depreciation of $10,192 in 2008 and $3,721 in
2007)
|
20,826
|
26,503
|
||||||
Deferred
costs of developing patents
|
75,545
|
68,390
|
||||||
Prepaid
expenses and other assets
|
20,757
|
24,359
|
||||||
Total
assets
|
$
|
121,595
|
$
|
151,168
|
||||
LIABILITIES
AND STOCKHOLDERS' (DEFICIT) EQUITY
|
||||||||
Current
and total liabilities
|
||||||||
Accounts
payable
|
$
|
816
|
$
|
3,497
|
||||
Accrued
consulting fees - shareholders
|
330,000
|
-
|
||||||
Total
Liabilities
|
330,816
|
3,497
|
||||||
Commitments
(Note 5)
|
||||||||
Stockholders'
(Deficit) Equity
|
||||||||
Common
stock, $0.0001 par value; 100,000,000 shares authorized,
|
||||||||
37,929,907 shares
issued and outstanding (36,913,650 as of 2007)
|
3,793
|
3,691
|
||||||
Additional
paid-in capital
|
1,141,865
|
839,945
|
||||||
Deficit
accumulated during the development stage
|
(1,354,879
|
)
|
(695,965
|
)
|
||||
Total
stockholders' (deficit) equity
|
(209,221
|
)
|
147,671
|
|||||
Total
liabilities and stockholders' (deficit) equity
|
$
|
121,595
|
$
|
151,168
|
The
accompanying notes are an integral part of these financial
statements
F-2
GREEN
ENERGY LIVE, INC.
|
||||||||||||
(A
DEVELOPMENT STAGE ENTITY)
|
||||||||||||
STATEMENTS
OF OPERATIONS
|
||||||||||||
YEAR
ENDED DECEMBER 31, 2008
|
PERIOD
FROM JANUARY 17, 2007 (DATE OF INCEPTION) TO DECEMBER 31,
2007
|
CUMULATIVE
PERIOD
FROM
JANUARY 17, 2007 (DATE OF INCEPTION) TO DECEMBER 31, 2008
|
||||||||||
Revenues
|
||||||||||||
Interest
income
|
$
|
16
|
$
|
122
|
$
|
138
|
||||||
Expenses
|
||||||||||||
Consulting
fees to shareholders
|
427,300
|
494,754
|
922,054
|
|||||||||
Professional
Fees
|
87,809
|
75,850
|
163,659
|
|||||||||
General
and administrative
|
143,821
|
119,508
|
263,329
|
|||||||||
Loss
on disposal of asset
|
-
|
5,975
|
5,975
|
|||||||||
Total
expenses
|
658,930
|
696,087
|
1,355,017
|
|||||||||
Net
loss
|
$
|
(658,914
|
)
|
$
|
(695,965
|
)
|
$
|
(1,354,879
|
)
|
|||
Common
Shares Outstanding
|
37,929,907
|
36,915,150
|
37,929,907
|
|||||||||
Weighted
Average Shares Outstanding
|
37,215,240
|
34,930,585
|
36,100,073
|
|||||||||
Basic
and Fully Diluted Loss Per Share
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
$
|
(0.04
|
)
|
The
accompanying notes are an integral part of these financial
statements.
F-3
GREEN
ENERGY LIVE, INC.
|
||||||||||||||||||||
(A
DEVELOPMENT STAGE ENTITY)
|
||||||||||||||||||||
STATEMENTS
OF STOCKHOLDERS' (DEFICIT) EQUITY
|
||||||||||||||||||||
Deficit
Accumulated
During
the
Development
Stage
|
||||||||||||||||||||
Additional
Paid-in
Capital
|
Total
Stockholders'
Equity
(Deficit)
|
|||||||||||||||||||
Common
Stock
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||
Issuances
of common stock for cash
|
36,423,650 | $ | 3,642 | $ | 708,060 | $ | - | $ | 711,702 | |||||||||||
Issuances
of common stock in exchange for consulting services
|
||||||||||||||||||||
520,000 | 52 | 176,882 | - | 176,934 | ||||||||||||||||
Redemption
of common stock
|
(30,000 | (3 | ) | (44,997 | ) | - | (45,000 | ) | ||||||||||||
Net
loss
|
- | - | - | (695,965 | ) | (695,965 | ) | |||||||||||||
Balances,
December 31, 2007
|
36,913,650 | 3,691 | 839,945 | (695,965 | ) | 147,671 | ||||||||||||||
Issuances
of common stock for cash
|
1,014,257 | 102 | 301,320 | - | 301,422 | |||||||||||||||
Issuances
of common stock in exchange for consulting services
|
2,000 | - | 600 | - | 600 | |||||||||||||||
Net
loss
|
- | - | - | (658,914 | ) | (658,914 | ) | |||||||||||||
Balances,
December 31, 2008
|
37,929,907 | $ | 3,793 | $ | 1,141,865 | $ | (1,354,879 | ) | $ | (209,221 | ) |
The
accompanying notes are an integral part of these financial
statements.
F-4
GREEN ENERGY LIVE,
INC.
(A
DEVELOPMENT STAGE ENTITY)
STATEMENTS
OF CASH FLOWS
Year
ended
December
31, 2008
|
Period
from January 17, 2007 (date of inception) to
December
31, 2007
|
Cumulative
period from January 17, 2007 (date of inception) to December 31,
2008
|
||||||||||
Cash
flows from operating activities
|
||||||||||||
Net
loss
|
$
|
(658,914
|
)
|
$
|
(695,965
|
)
|
$
|
(1,354,879
|
)
|
|||
Adjustments
to reconcile net loss to net
|
||||||||||||
cash
used in operating activities
|
||||||||||||
Depreciation
|
6,471
|
3,721
|
10,192
|
|||||||||
Share-based
payments
|
600
|
176,934
|
177,534
|
|||||||||
Loss
on disposal of equipment
|
-
|
5,975
|
5,975
|
|||||||||
Change in operating assets and liabilities which
provided (used) cash
|
||||||||||||
Prepaid
expenses and other assets
|
3,602
|
(24,359
|
)
|
(20,757
|
)
|
|||||||
Accounts
payable
|
2,681
|
3,497
|
816
|
|||||||||
Accrued
consulting fees to shareholders
|
330,000
|
-
|
330,000
|
|||||||||
Net
cash used in operating activities
|
(320,922
|
)
|
(530,197
|
)
|
(851,119
|
)
|
||||||
Cash
flows from investing activities
|
||||||||||||
Purchases
of equipment
|
(794
|
)
|
(36,199
|
)
|
(36,993
|
)
|
||||||
Deferred
costs of developing patents
|
(7,155
|
)
|
(68,390
|
)
|
(75,545
|
)
|
||||||
Net cash used in investing
activities
|
(7,949
|
)
|
(104,589
|
)
|
(112,538
|
)
|
||||||
Cash
flows from financing activities
|
||||||||||||
Issuance
of common stock
|
301,422
|
711,702
|
1,013,124
|
|||||||||
Advances
on unissued stock
|
-
|
(45,000
|
)
|
-
|
||||||||
Repayments
of note payable
|
-
|
--
|
(45,000
|
)
|
||||||||
Net
cash provided by financing activities
|
301,422
|
666,702
|
968,124
|
|||||||||
Net
(decrease) increase in cash and cash equivalents
|
(27,449
|
)
|
31,916
|
(27,449
|
)
|
|||||||
Cash
and cash equivalents at beginning of period
|
31,916
|
-
|
-
|
|||||||||
Cash
and cash equivalents at end of period
|
$
|
4,467
|
$
|
31,916
|
$
|
4,467
|
||||||
The
accompanying notes are an integral part of these financial
statements.
F-5
GREEN
ENERGY LIVE, INC.
(A
DEVELOPMENT STAGE ENTITY)
NOTES
TO FINANCIAL STATEMENTS
1.
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature
of Organization
Green Energy
Live, Inc. (the “Company”) was incorporated on January 17, 2007
under the laws of the State of Nevada. The Company is currently in
the process of developing a strategic plan, raising equity capital and seeking
acquisition candidates to accomplish its growth strategies. The
Company intends to conduct business in the emerging waste/biomass-to-ethanol
industry. The Company intends to convert biomass wastes that are
currently being landfilled into ethanol and other valuable co-products using
proprietary patented gasification and conversion technology.
Development
Stage Activities
The
Company is currently a development stage enterprise. All losses
accumulated since the inception of business have been considered as part of the
development stage activities.
The
accompanying financial statements have been prepared on the basis that the
Company will continue as a going concern, which assumes the realization of
assets and the satisfaction of liabilities in the normal course of
business. Since inception, the Company has been engaged in product
development and pre-operational activities. No operating revenue has
been generated and the Company has incurred accumulated losses and negative
operating cash flows of $1,354,879 and $851,119 respectively for the period from
inception through December 31, 2008 and 2007.
Capital
raised during the development stage period has been utilized to secure product
patents critical to the Company’s future growth and to facilitate the creation
of strategic plans that may include acquisitions in the Company’s target
industry, and/or having the ability to manufacture the Company’s patented
products.
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 disclosure 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
Cash and
cash equivalents consist of demand deposits in banks and cash on
hand. In the normal course of business, the Company may maintain
financial institution deposits that periodically exceed federally insured
limits. Management does not consider uninsured cash to be a
significant risk.
Deferred
Costs of Developing Patents
The
Company has three patents pending final federal regulatory approval. In
accordance with Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible
Assets, these patent amounts, consisting of consulting and legal fees,
are stated at cost and are expected to be amortized over their regulatory life
if and when patent protection is granted by the United States Patent
office. As of December 31, 2008, the official patent authorization
has not been granted.
Equipment
and Depreciation
Equipment
is stated at cost. Depreciation is computed using the straight-line
method over the estimated useful lives of the related assets, which range from 3
to 7 years. Management periodically reviews these assets to determine
whether carrying values have been impaired. Depreciation expense was
$6,471 and $3,721 for the periods ended December 31, 2008 and 2007,
respectively.
F-6
GREEN
ENERGY LIVE, INC.
(A
DEVELOPMENT STAGE ENTITY)
NOTES
TO FINANCIAL STATEMENTS
Income
Taxes
Deferred
income tax assets and liabilities are computed annually for differences between
the financial statements and federal income tax basis of assets and liabilities
that will result in taxable or deductible amounts in the future, based on
enacted tax laws and rates applicable to the period in which the differences are
expected to affect taxable income. Deferred income tax benefits
result from net operating loss carryforwards. Valuation allowances
are established when necessary to reduce the deferred tax assets to the amount
expected to be realized. Due to the development stage nature of the
Company’s business, any deferred tax benefit from the anticipated utilization of
net operating losses generated during the interim period have been completely
offset by a valuation allowance. Income tax expense is the tax
payable or refundable for the period plus, or minus the change during the period
in deferred tax assets and liabilities.
Earnings
Per Common Share
Basic
earnings per share represents income available to common shareholders divided by
the weighted average number of common shares outstanding as of the year end
December 31, 2008 and for the period from inception to the year ended December
31, 2007 and from the period from inception through the year ended December 31,
2007.
Reclassifications
Certain
amounts as reported in the 2007 financial statements have been reclassified to
conform with the 2008 presentation.
2. RECENT
ACCOUNTING PRONOUNCEMENTS
In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141R, Business
Combinations (SFAS 141R), which replaces SFAS No. 141, Business Combinations. SFAS
No. 141R establishes principles and requirements for determining how an
enterprise recognizes and measures the fair value of certain assets and
liabilities acquired in a business combination, including non controlling
interests, contingent consideration, and certain acquired contingencies. SFAS
No. 141R also requires acquisition-related transaction expenses and
restructuring costs be expensed as incurred rather than capitalized as a
component of the business combination. SFAS No. 141R will be applicable
prospectively to business combinations beginning in the Company’s 2009 fiscal
year.
On March
19, 2008, the FASB issued Statement of Financial Accounting Standards No. 161
(SFAS No.161) Disclosures
about Derivative Instruments and Hedging Activities. The objective of
SFAS No. 161 is to enhance disclosures about an entity’s derivative and hedging
activities and thereby improve the transparency of financial reporting. SFAS No.
161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008 and is not expected to have a
significant impact on the Company’s financial statements.
In
October 2008, the FASB staff issued Staff Position No. FSP 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active. FSP 157-3
clarifies the application of SFAS 157, which the Corporation adopted as of
January 1, 2007, in cases where a market is not active. The Company has
considered the guidance provided by
FSP
157-3, which was effective on October 10, 2008, in its determination of
estimated fair values as of December 31, 2008, as applicable and it had no
affect on the 2008 financial statements.
F-7
GREEN
ENERGY LIVE, INC.
(A
DEVELOPMENT STAGE ENTITY)
NOTES
TO FINANCIAL STATEMENTS
The FASB
Issued EITF No. 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities
in June 2008. FSP EITF 03-6-1 provides that unvested share-based payment
awards that contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) are participating securities and shall be included in
the computation of earnings per share pursuant to the two-class method. FSP EITF
03-6-1 will be effective on January 1, 2009. All previously reported earnings
per share data will be retrospectively adjusted to conform with the provisions
of FSP EITF 03-6-1. The Company is considering the impact of FSP EITF 03-6-1 on
its financial statements upon issuance of such share-based
payments.
3. COMMON STOCK
In April
2008, we signed an agreement with a third party to place 3,000,000 shares of our
common stock for sale to that third party’s clients, of which we received a per
share amount net of negotiated placement costs of $0.29 per share. These funds
were used for our development and ongoing activities during 2008. Approximately
324,166 shares were issued with this agreement until it was closed in July
2008.
Once our
Form 15c211 application was approved, effective September 9, 2008, and we became
a fully reporting, publicly traded company, we signed a new agreement with a
third party to place an additional 3,000,000 shares of our common stock for sale
to that third party’s clients at an issuance price that would vary with the
market bid prices.
4. SHARE-BASED
PAYMENTS
During
the period ended December 31, 2007 the Company issued 520,000 shares of common
stock as compensation under a consulting agreement for professional services
performed in furtherance of the Company’s business objectives. In
accordance with Statement of Financial Accounting Standards (SFAS) 123(R) Share-Based Payments and SEC
Staff Accounting Bulletin No. 107 (SAB 107) the issued shares have been
recorded at fair value ($176,882) determined by reference to recent sale
activity of common shares issued in exchange for cash during the
period. The consulting agreements relate to strategic professional
services rendered in the areas of investor identification and relations,
financial resources, and due diligence procedures.
5. RELATED PARTY TRANSACTIONS AND
COMMITMENTS
Shareholder
Contracts
The
Company has entered into various agreements with its shareholders to provide
services. Fees for these services are included in the statement of operations in
the consulting fees to shareholders. The terms of the agreements are
described below.
The
Company entered into an agreement on January 18, 2007, with
a shareholder to provide consulting services at a rate of $20,000 per
month. The terms of the agreement are month to
month. The fees for services for 2008 and 2007 were $240,000
and $220,000, respectively. Amounts payable related to this contract were
$200,000 as of December 31, 2008. No amounts were payable
under this contract as of December 31, 2007.
The Company
entered in an agreement with the President of the company effective January 17,
2007, to provide consulting services at rates ranging from $3,000 to
$5,000 per month, as well as an agreement to serve as President of the company
and perform related services for $5,000 per month. Both contracts
terms are month to month. The fees for both services for 2008 and
2007 were $120,000 and $56,000, respectively. Amounts payable related
to this contract were $70,000 as of December 31, 2008. No amounts
were payable under the contract as of December 31, 2007.
F-8
GREEN ENERGY LIVE,
INC.
(A
DEVELOPMENT STAGE ENTITY)
NOTES
TO FINANCIAL STATEMENTS
In
addition, the Company has an agreement with the Chairman of the Board of
Directors effective January 17, 2007, to provide consulting services to the
Company at a rate of $5,000 per month. The terms of the agreement are month to
month. The fees for services for 2008 and 2007 were $60,000 and $50,000,
respectively. Amounts payable related to these contracts were $50,000 as of
December 31, 2008. No amounts were payable under this contract as of December
31, 2007.
Service
Contracts to Non-Shareholders
The
Company has entered into an agreement effective July 2, 2007, with a consultant
to provide business acquisition prospecting on behalf of the Company for $500
per week, plus reimbursement of certain other costs incurred in the
prospecting. The terms of the agreement were month to month and
the contract was replaced effective October 2007 by the contract discussed
below. The fees for services for 2007 were $9,328. Fees for
these services are included in the statement of operations in the general and
administrative expenses.
The
Company has entered into an agreement with an employee leasing company to
provide administration for contract payments and other certain administrative
and prospecting services on behalf of the Company, effective October 2007, with
fees ranging from $19,000 to $20,000 per month. The fees paid under
the contract include amounts which are then remitted to the shareholders under
the agreements described in the preceding section. The prospecting
portion of the services fees paid in 2008 totaled $70,000 with no payables for
this portion as of December 31, 2008. The prospecting portion of the
services fees paid are not performed by or paid to shareholders of
record. In 2008, the administration services, provided by
shareholders and paid through this employee leasing company contracts as
discussed above, totaled $144,000. Of this $144,000 billed in 2008,
there remained a payable of $120,000 unpaid compensation to shareholders. Along
with this unpaid compensation to shareholders, there is an additional $10,000 in
payables related to the compensation which covers employer taxes and insurance
expenses. There were no payables in 2007 for any portion of this
employee leasing contract.
6. SUPPLEMENTAL CASH FLOWS
INFORMATION
The
Company redeemed 30,000 shares of common stock during the period ended December
31, 2007, in exchange for the issuance of a note payable in the amount of
$45,000. The last installment payment on the note was paid November
20, 2007.
F-9