Attached files
file | filename |
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EX-31.02 - RTS Oil Holdings, Inc. | ex3102k033110.htm |
EX-10.03 - RTS Oil Holdings, Inc. | ex1003k033110.htm |
EX-10.04 - RTS Oil Holdings, Inc. | ex1004k033110.htm |
EX-32.01 - RTS Oil Holdings, Inc. | ex3201k033110.htm |
EX-10.02 - RTS Oil Holdings, Inc. | ex1002k033110.htm |
EX-31.01 - RTS Oil Holdings, Inc. | ex3101k033110.htm |
EX-32.02 - RTS Oil Holdings, Inc. | ex3202k033110.htm |
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE
FISCAL YEAR ENDED MARCH 31, 2010
Commission
File Number 000-53182
Geo
Point Technologies, Inc.
|
|
(Exact
name of registrant as specified in its charter)
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|
Utah
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11-3797590
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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257
East 200 South, Suite 490
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|
Salt
Lake City, UT
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84111
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(Address
of principal executive offices)
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(Zip
Code)
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801-810-4662
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(Registrant’s
telephone number, including area code)
|
|
Securities
registered pursuant to Section 12(b) of the Exchange
Act:
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|
Title
of each class
|
Name
of each exchange on which registered
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n/a
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n/a
|
Securities
registered pursuant to Section 12(g) of the Exchange
Act:
|
|
Common
Stock, Par Value $0.001
|
|
(Title
of Class)
|
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined by
Rule 405 of the Securities Act. Yes ¨ No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. Yes ¨ No x
Indicate
by check mark whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of
this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such
files). Yes ¨ No ¨
Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer o
|
Accelerated
filer ¨
|
Non-accelerated
filer o
|
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 the
aggregate market value of the voting and nonvoting common equity held by
nonaffiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter. As of
September 30, 2009, the aggregate market value of the voting and nonvoting
common equity held by nonaffiliates of the issuer was
$320,530.
Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date. As of July 12, 2010, issuer had
3,257,000 shares of issued and outstanding common stock, par value
$0.001.
DOCUMENTS
INCORPORATED BY REFERENCE: None.
TABLE
OF CONTENTS
Page
|
||
Part
I
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||
Item
1
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Business
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1
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Item
1A
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Risk
Factors
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4
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Item
1B
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Unresolved
Staff Comments
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4
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Item
2
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Properties
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4
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Item
3
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Legal
Proceedings
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5
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Item
4
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[Removed
and Reserved]
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5
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Part
II
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||
Item
5
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Market
for Registrant’s Common Equity, Related Stockholder
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Matters
and Issuer Purchases of Equity Securities
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5
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|
Item
6
|
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
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|
and
Results of Operations
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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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9
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Item
8
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Financial
Statements and Supplementary Data
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9
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Item
9
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Changes
in and Disagreements with Accountants on
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Accounting
and Financial Disclosure
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9
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Item
9A(T)
|
Controls
and Procedures
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9
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Item
9B
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Other
Information
|
10
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Part
III
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||
Item
10
|
Directors,
Executive Officers and Corporate Governance
|
11
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Item
11
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Executive
Compensation
|
12
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Item
12
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Security
Ownership of Certain Beneficial Owners and Management
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|
and
Related Stockholder Matters
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13
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|
Item
13
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Certain
Relationships and Related Transactions,
|
|
and
Director Independence
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14
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Item
14
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Principal
Accounting Fees and Services
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14
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Item
15
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Exhibits,
Financial Statement Schedules
|
15
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Signatures
|
17
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SPECIAL
NOTE ABOUT FORWARD-LOOKING INFORMATION
Certain
statements in this Annual Report on Form 10-K are forward-looking
statements. Forward-looking statements are typically identified by
the use of the words “believe,” “may,” “could,” “should,” “expect,”
“anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and similar
words and expressions. Statements that describe our future strategic
plans, goals, or objectives are also forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, performance, or achievements to
be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. The
forward-looking statements included in this report are made only as of the date
of this report.
i
PART
I
ITEM
1. BUSINESS
History
Geo Point
Technologies was formed as a DBA of our founder, William Lachmar, in 1997 and
then incorporated under the laws of California in 2002. In October
2006, we changed our state of incorporation from California to Utah by merging
with our wholly owned Utah subsidiary formed for that purpose. As
used in this report, the terms “we,” “us,” and “our” refer to Geo Point
Technologies, Inc., a corporation organized under Utah law.
Current
Activities
In May
2010, we entered into a share exchange agreement with GSM Oil Holdings Limited
(“GSM Oil Holdings”), a limited liability company organized in Cyprus, and
Summit Trustees PLLC, a Utah professional limited liability company, to acquire
all of the issued and outstanding stock of GSM Oil Holdings. GSM Oil
Holdings is in the process of acquiring Sinur Oil LLP (“Sinur Oil”) through its
wholly owned Dutch subsidiary, GSM Oil B.V. Sinur Oil LLP is a
development-stage oil refining company with operations in southern Kazakhstan
and has recently completed construction of its micro oil refinery. At
closing, we will issue 26,808,000 shares of our common stock to Summit Trustees
PLLC and will receive all of the outstanding shares of GSM Oil
Holdings. Significant conditions to closing must be resolved before
the transaction can be closed, including GSM Oil Holdings’ acquisition of Sinur
Oil and our satisfactory evaluation of the assets and operations of Sinur Oil’s
oil refinery.
To date,
our primary efforts have been in our environmental division, providing
historical site data searches, preliminary investigation and drilling, site
characterization modeling, regulatory agency liaison, and full environmental
clean-ups using such methods as vapor extraction, air sparging, bio-remediation,
ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection
treatment, air stripping, and ionic exchange.
Our
engineering division has provided consulting and compliance services for new
utility installation and general site erosion control for housing tracts and
updating service station underground storage tanks and dispensing systems to
comply with continually changing C.A.R.B. (California Air Resources Board)
regulations.
Our
petroleum geology division has not promoted its services to customers but has
been engaged in research and development of hydrocarbon-indicating methods and
technology.
Upon the
completion of the acquisition of Sinur Oil, we plan to shift our focus to oil
refining activities. To carry out this transition, we will continue
the operations of our other divisions until such time as the oil refining
division is generating sufficient revenue to be self-sustaining. At
that point, we will evaluate whether or not to continue the operations of our
environmental, engineering, and petroleum geology divisions or to focus all of
our resources on our petroleum refining division.
Corporate
Objective
We intend
to become an oil refiner through our acquisition of Sinur Oil. The
Sinur Oil refinery is located in Karatau, Kazakhstan. The refinery is
designed to process crude oil into diesel, gasoline, and mazut, a fuel
oil. We would then market and sell the refined products domestically,
as well as export them to the surrounding region.
1
Business
Strategy
Our
primary objective will be the achievement of profitability and self-sustaining
growth by:
●
|
sourcing
high-quality crude oil at favorable prices from local oil
fields;
|
●
|
refining
oil at our Karatau, Kazakhstan, micro-refinery;
and
|
●
|
selling
the finished products, which consist of diesel, petroleum, and mazut, both
to domestic and international
customers.
|
The
Sinur Oil Plant at Karatau
The site
of the Sinur Oil refinery was previously a fuel depot. It was
acquired by the Sinur Oil principals in 2007. Since then, it has been
remodeled and enhanced to turn it into a fully functional oil
refinery. The plant is expected to produce approximately 25,000 tons
annually of refined products. The micro-refinery is based on
technology that has been in use since the 1990s and is currently deployed in
over a dozen micro refineries throughout Kazakhstan. The refinery is
located in Karatau, Kazakhstan, which is about 50 miles from Taraz, the fifth
largest city in Kazakhstan. The existing infrastructure, which
includes electrical supply, water, boiler room, reservoirs, pipeline access,
rail access, and administrative buildings, should be able to support an increase
in refining activity. Throughout Kazakhstan there are several smaller
oil fields, similar to one of Sinur Oil’s current suppliers, Turan Barlau, that
are looking for access to refineries, but do not produce sufficient volume to
supply larger refineries.
The
technology for the main refining stack has been provided by Montazh-Engineering
LLP, a Kazakh company. It relies on electromagnetic induction instead
of traditional open-flame combustion as its major heat source. We
believe that this new “green” technology provides the following advantages over
traditional refineries:
·
|
Environmentally
Friendly - The absence of emissions from combustion products results in a
cleaner, less-polluted environment.
|
·
|
Consistency
– The induction heater enables operators to adjust temperatures with more
precision than oil-fired furnaces, resulting in a more consistent and
uniform finished product.
|
·
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Reduced
Labor – The highly automated process requires fewer employees to oversee
and make adjustments.
|
·
|
Safety
– The absence of an open flame combined with lower excess pressure,
compared to other refining technologies, offers a safer work environment
for plant operators.
|
·
|
Energy
Efficiency – Oil-fired furnaces lose large amounts of heat through exhaust
fumes, resulting in heat transfer efficiencies of less than
60%. The electromagnetic inductors, on the other hand, can
convert electrical energy into heat at over 98% efficiency
on-site.
|
·
|
Cost
Savings – Plant construction requires a fraction of the initial capital
expenditures necessary for the traditional billion dollar
refineries.
|
·
|
Modularity
- The modular design of the micro-refinery enables it to be expanded in
relatively brief time (6-9 months) by constructing additional refining
stacks. This also allows one stack to be shut down for
maintenance independently of the others, allowing the plant to remain in
operation, as compared to the large-scale refineries that have to
completely shut down annually for up to 30 days at a time to perform
maintenance.
|
2
Competition
Petroleum
refining and marketing is highly competitive. Within Kazakhstan,
there are three major refineries – Shymkent, Pavlodar, and Atyrau – that supply
the majority of the country’s refined petroleum needs. The Shymkent
refinery is located in southern Kazakhstan within 200 kilometers of the Sinur
Oil refinery in Karatau. The other major Kazakh refineries in
Pavlodar and Atyrau are located more than 1,500 kilometers
away. There are also several smaller micro-refineries, similar to
Sinur Oil’s, throughout Kazakhstan.
Russia
supplies significant quantities of refined products to the Kazakhstan
market. Russian refineries have supplied, on a regular basis,
products that are not available or are in short supply from Kazakhstan
refineries. Russian refineries emerge as competitors in the southern
Kazakhstan market primarily when supply and demand, currency imbalances, or
differing interpretations of applicable legal and tax requirements create
opportunities for them to export bulk products into the region.
The
principal competitive factors that would affect our refining operations are
crude oil and other feedstock costs, refinery efficiency, refinery product mix
and product distribution, and transportation costs. Certain
competitors have refineries that are larger and more complex and, as a result,
could have lower per unit costs or higher margins per unit of
throughput. Sinur Oil has no crude oil reserves and does not plan to
engage in exploration at this time. We believe that we will be able
to obtain adequate crude oil and other feedstock at generally competitive prices
for the foreseeable future.
Manufacturing
Capacity and Suppliers
The main
piece of equipment for the Sinur Oil refinery, the refining stack, was produced
by and bought from Montazh-Engineering LLP, a Kazakh company. There
are other producers of similar micro-refining equipment in Kazakhstan that Sinur
Oil evaluated before deciding to use Montazh-Engineering. If Sinur
Oil were to expand its refining capacity, it could take up to a year for
Montazh-Engineering to produce and install more refining stacks.
To
operate profitably, it is important that Sinur Oil have a reliable supply of
quality crude oil for its refining activities. Sinur Oil has entered
into an agreement with the Turan Barlau oil field, located in southern
Kazakhstan, to provide enough crude to keep Sinur Oil operating at current
maximum capacity.
Governmental
and Environmental Regulation
Sinur
Oil’s operations are subject to various levels of government control and
regulation in Kazakhstan. We plan to focus on compliance with all
legal requirements in the conduct of our operations and employ business
practices that we consider to be prudent under the circumstances in which we
operate. In Kazakhstan, legislation affecting the oil and gas
industry is under constant review for amendment or
expansion. Pursuant to such legislation, various governmental
departments and agencies have issued extensive rules and regulations that affect
the oil and gas industry, some of which carry substantial penalties for failure
to comply. These laws and regulations can have a significant impact
and could adversely affect our profitability by increasing the cost of doing
business and by imposition of new taxes, tax rates, and tax
schemes. Inasmuch as new legislation affecting the industry is
commonplace and existing laws and regulations are frequently amended or
reinterpreted, we are unable to predict the future cost or impact of complying
with such laws and regulations.
3
We do not
expect that any of these government controls or regulations will affect projects
in which we participate in a manner materially different than they would affect
other projects of similar size or scope of operations. All current
legislation is a matter of public record, and we are not able to accurately
predict what additional legislation or amendments may be
enacted. Governmental regulations may be changed from time to time in
response to economic or political conditions.
One of
the conditions to closing the Sinur Oil acquisition is that Sinur Oil obtain a
general refinery license from the government of Kazakhstan. This
license will allow Sinur Oil to sell the finished products it refines itself, as
well as allow it to buy and sell petroleum products from other
suppliers. Once the plant was completed and Sinur Oil was fully
capitalized, the license application was submitted to the government and is now
pending.
Research
and Development
To date,
our research and development activities have focused on developing, improving,
and testing our hydrocarbon-indicating technology and related
components. We are dedicating our expenditures in the areas of base
research for equipment design and enhancement of application interpretation
capability. Research and development expenses for the years ended
March 31, 2010 and 2009, were $37,042 and $2,451, respectively.
Employees
We
currently have one full-time employee. After completion of the
acquisition, it is anticipated that we will have approximately 40
employees.
Office
and Facilities
Our
executive offices are located at 257 East 200 South, Suite 490, Salt Lake City,
Utah 84111. Our telephone number at that address is 801-810-4662, and
our facsimile number is 801-820-3070.
ITEM
1A. RISK FACTORS
Not
applicable.
ITEM
1B. UNRESOLVED STAFF COMMENTS
Not
applicable.
ITEM
2. PROPERTIES
Our
executive offices are currently located in office space that has been made
available to us by a non-related party free of charge. We cannot be
sure that this space will remain available to us or will continue to be
sufficient for our needs. We rent our environmental remediation
offices in Santa Ana, California, on a month-to-month basis, which means that we
could choose to leave or the property owner could require us to leave with one
month’s notice. Our current rental payment is approximately $1,000.00
per month.
4
ITEM
3. LEGAL PROCEEDINGS
We are
not a party to any legal proceedings and no legal proceedings have been
threatened by us or, to the best of our knowledge, against us.
ITEM
4. [REMOVED AND RESERVED]
PART
II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Common
Stock
Our
common stock has been quoted on the Over-the-Counter Bulletin Board since May
14, 2009. The following table sets forth for the period indicated the
high and low closing sales prices for our common stock as quoted under the
symbol GNNC on the Over-The-Counter Bulletin Board:
Low
|
High
|
||
2010:
|
|||
Second
Quarter (through July 12, 2010)
|
$3.00 | $3.00 | |
First
Quarter
|
1.40
|
3.00
|
|
2009:
|
|||
Fourth
Quarter
|
1.33
|
1.33
|
|
Third
Quarter
|
1.33
|
1.33
|
|
Second
Quarter
|
1.24
|
1.33
|
|
First
Quarter
|
1.05
|
1.36
|
As of
July 12, 2010, we had 3,257,000 shares of common stock issued and
outstanding. Of those shares, 3,000,000 shares are held by William C.
Lachmar, Manager of Environmental Remediation and a director.
As of
July 12, 2010, there were approximately 160 holders of record of our common
stock.
Dividend
Policy
We have
never paid cash dividends on our common stock and do not anticipate that we will
pay dividends in the foreseeable future. We intend to use any future
earnings primarily for the expansion of our business.
5
Recent
Issuances of Unregistered Securities
In May
2010, we entered into an agreement for financial advising and investment banking
services. In connection with that agreement we issued warrants to
purchase 250,000 shares of our common stock at an exercise price of $1.75 per
share. Those warrants expire five years from the date of
grant.
No
general solicitation was used, no commission or other remuneration was paid in
connection with the foregoing transaction, and no underwriter
participated. The purchaser acknowledged, in writing, the receipt of
restricted securities. This transaction was effected in reliance on
the exemption from registration provided in Section 4(2) of the Securities Act
of 1933, as amended, for transactions not involving any public
offering.
Penny
Stock Regulations
Our stock
is presently regulated as a penny stock, and broker-dealers will be subject to
regulations that impose additional requirements on us and on broker-dealers that
want to publish quotations or make a market in our common stock. The
Securities and Exchange Commission has promulgated rules governing
over-the-counter trading in penny stocks, defined generally as securities
trading below $5.00 per share that are not quoted on a securities exchange or
NASDAQ or which do not meet other substantive criteria. Under these
rules, our common stock is currently classified as a penny stock. As
a penny stock, our common stock is currently subject to rules promulgated by the
Securities and Exchange Commission that impose additional sales practice
requirements on broker-dealers that sell such securities to persons other than
established customers and institutional accredited investors. For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser’s written
consent to the transaction prior to sale. Further, if the price of
the stock is below $5.00 per share and the issuer does not have $2.0 million or
more net tangible assets or is not listed on a registered national securities
exchange or Nasdaq, sales of such stock in the secondary trading market are
subject to certain additional rules promulgated by the Securities and Exchange
Commission. These rules generally require, among other things, that
brokers engaged in secondary trading of penny stocks provide customers with
written disclosure documents, monthly statements of the market value of penny
stocks, disclosure of the bid and asked prices, and disclosure of the
compensation to the broker-dealer and the salesperson working for the
broker-dealer in connection with the transaction. These rules and
regulations may affect the ability of broker-dealers to sell our common stock,
thereby effectively limiting the liquidity of our common stock. These
rules may also adversely affect the ability of persons who acquire our common
stock to resell their securities in any trading market that may exist at the
time of such intended sale.
Equity
Compensation Plans
We do not
have any securities authorized for issuance under any equity compensation
plans.
ITEM
6. SELECTED FINANCIAL DATA
Not
applicable.
6
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The
following discussion should be read in conjunction with our audited financial
statements and notes to our financial statements included elsewhere in this
report. This discussion contains forward-looking statements that
involve risks and uncertainties. Actual results could differ
materially from those anticipated in these forward-looking statements as a
result of various factors discussed elsewhere in this report.
Certain
information included herein contains statements that may be considered
forward-looking statements, such as statements relating to our anticipated
revenues, gross margin and operating results, future performance and operations,
plans for future expansion, capital spending, sources of liquidity, and
financing sources. Such forward-looking information involves
important risks and uncertainties that could significantly affect anticipated
results in the future, and accordingly, such results may differ from those
expressed in any forward-looking statements made herein. These risks
and uncertainties include those relating to our liquidity requirements, future
events that may result in the need for additional capital, the cost and
availability of additional capital
that
we may require and possible related restrictions on our future operating or
financing flexibility, our future ability to attract industry or financial
participants to share the costs of exploration, exploitation, development, and
acquisition activities, future plans and the financial and technical resources
of industry or financial participants, and other factors.
Overview
We are a
provider of geological and earth study services related to land surveying for
new construction, soil testing and environmental risk and impact assessments,
and natural resource assessments with an emphasis on oil and gas deposit
discovery. Our services generally are provided in connection with
construction projects.
In the
future, we intend to shift our focus to oil refining. Upon completion
of the acquisition of Sinur Oil, we will own and operate a micro-refinery in
Karatau, Kazakhstan.
Sources
of Revenues
We derive
our revenues through geological and earth study services related to land
surveying for new construction, soil and groundwater environmental impact
assessments, environmental clean-up, and natural resource assessments with an
emphasis on oil and gas deposit discovery. Thus far, all of our
revenues have been derived in the state of California.
Cost
of Revenues and Operating Expenses
Cost of
Revenues. Cost of revenues consists of supplies, parts, and
direct labor related to the fulfillment of the final
deliverable. These costs are charged to expense on a per-job
basis.
General and
Administrative Expenses. General and administrative expenses
consist of compensation and related expenses for executive, finance, accounting,
administrative, legal, professional fees, other corporate expenses, and
marketing.
7
Critical
Accounting Policies
Our
financial statements are prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues, costs and expenses, and
related disclosures. On an ongoing basis, we evaluate our estimates
and assumptions. Our actual results may differ from these estimates
under different assumptions or conditions.
We
believe that of our significant accounting policies, which are described in Note
2 to the financial statements, the following accounting policy involves a
greater degree of judgment and complexity. Accordingly, this is the
policy we believe is the most critical to aid in fully understanding and
evaluating our financial condition and results of operations.
Revenue
Recognition. We recognize revenue when it is realized and
earned. We consider revenue realized or realizable and earned when:
(1) we have persuasive evidence of an arrangement; (2) services have
been rendered and invoiced; (3) the price is fixed or determinable; and
(4) collectability is reasonably assured. We generate revenues
from two environmental services: land surveying and engineering for new
construction and environmental impact studies and clean-up
services. Operations associated with the oil and gas segment have not
yet generated revenues. If and when oil refining begins, revenue will
be recorded when the product is delivered to the purchaser.
Results
of Operations
Comparison
of Year Ended March 31, 2010 and 2009
Revenues. Revenues
for the year ended March 31, 2010, were $185,986, a decrease of $25,250 below
revenues of $211,236 for the comparable period in 2009. The decrease
in revenues was due primarily to the completion of two significant contracts
during the first quarter of fiscal 2009. Increased competition from
competitive proposals was an additional factor.
Cost of
Revenues. Cost of revenues for 2010 was $61,001, an increase
of $739 over cost of revenues of $60,262 for 2009. The increase in
cost of revenues from fiscal 2009 to 2010 was directly related to the lower
margins obtained on current-year projects due to increased competition from
competitive proposals.
General and Administrative
Expenses. General and administrative expenses for 2010 were
$172,694, a decrease of $107,658 below general and administrative expenses of
$280,352 for 2009. This decrease was primarily due to the reduction
in professional fees and other general corporate expenditures in
comparison to the previous year, including approximately $130,000 of bad
debt expense. In addition, the current year included $37,042 in
research and development costs, which were minimal in the previous
year.
Liquidity
and Capital Resources
Net Cash Used in
Operating Activities. Net cash used in operating activities
during the year ended March 31, 2010, was $34,959, compared to net cash used in
operating activities for the year ended March 31, 2009, of
$34,113. The change in periods was immaterially different; however,
the biggest difference related to a significant write off of bad debts in the
previous year in which was not present in the current year.
8
Net Cash Used in
Investing Activities. Net cash used in or provided by
investing activities during the year ended March 31, 2010, was $0, compared
to net cash used of $1,800 by investing activities for the year ended March 31
2009.
As of
March 31, 2010, our principal source of liquidity was cash totaling
$121,848. The primary source of our liquidity during the year ended
March 31, 2010, was cash on hand, which funded our
operations. We believe that our current cash together with our
expected cash flows from operations will be sufficient to meet our anticipated
cash requirements for working capital and capital expenditures, including our
marketing efforts, for at least the next 12 months.
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not
applicable.
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our
financial statements, including the report of independent registered public
accounting firm, are included beginning at page F-1 immediately following the
signature page of this registration statement.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM
9A(T). CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
We
maintain disclosure controls and procedures as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, that are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit to the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized, and reported within the time periods specified by the Securities and
Exchange Commission’s rules and forms, and that information is accumulated and
communicated to our management, including our principal executive officer and
principal financial officer (whom we refer to as our Certifying Officers), as
appropriate to allow timely decisions regarding required
disclosure.
Our
Certifying Officers evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) as
of March 31, 2010, pursuant to Rule 13a-15(b) under the Securities Exchange
Act. Based upon that evaluation, our Certifying Officers concluded
that, as of March 31, 2010, our disclosure controls and procedures were
effective.
9
Management’s
Annual Report on Internal Control over Financial Reporting
This
annual report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of our
registered public accounting firm due to a transition period established by
rules of the Securities and Exchange Commission for newly public
companies.
Internal
Controls over Financial Reporting
Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally
accepted accounting principles. There has been no change in our
internal control over financial reporting during the year ended March 31, 2010,
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Our
management, including our Certifying Officers, does not expect that our
disclosure controls and procedures or our internal controls will prevent all
errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no
evaluation of the controls can provide absolute assurance that all control
issues and instances of fraud, if any, within our company have been
detected.
Our
Certifying Officers conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework in Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, they concluded that
our internal control over financial reporting was effective as of March 31,
2010.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in
this annual report.
There
were no changes in our internal control over financial reporting that occurred
during the quarter ended March 31, 2010, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
ITEM
9B. OTHER INFORMATION
In May
2010, we entered into an agreement for financial advising and investment banking
services with National Securities Corporation. A copy of that
agreement is filed as an exhibit to this report. Under the agreement,
we issued warrants to purchase 250,000 shares of our common stock for $1.75 a
share and agreed to issue warrants to purchase an additional 250,000 shares upon
our acceptance of certain funding agreements. In addition, we agreed
to pay National Securities a total of $20,000 over the course of three months,
6% of equity capital raised, 3% of debt raised, and warrants to purchase 6% of
the number of common shares sold by us. A cash success fee of the
greater of 2-3% of any transaction and $100,000 may also be payable under the
agreement.
Additionally,
see Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities: Recent Issuances of Unregistered
Securities.
10
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
Executive
Officers and Directors
The
following table sets forth the name, age, and position of each of our current
directors and executive officers:
Name
|
Age
|
Title
|
||
Jeffrey
Jensen
|
31
|
President
and Director
|
||
William
Lachmar
|
53
|
Director,
Manager of Environmental Remediation
|
||
Jeffrey
Brimhall
|
29
|
Secretary/Treasurer,
Director
|
The
principal occupation, title, and business experience of our executive officers
and directors during the last five years, including the names and locations of
employers, are indicated below.
Jeffrey
Jensen became our director in August 2007, and our president and chief
executive officer in March 2010. Mr. Jensen is the president and
owner of Jensen Consulting Group, a business consulting firm he founded in April
2007 that helps companies perform financial analysis, forecast cash flow needs,
and secure investment capital. In 2003, he founded Pacific Industrial
Contractor Screening, a proprietary online clearinghouse that assists
petrochemical companies prequalify contractors, and served as its chief
information officer from 2003 through September 2007. Mr. Jensen
earned an M.B.A. from Brigham Young University in 2006 and a B.S. in electrical
and computer engineering, magna cum laude, from Brigham Young University in
2003.
Jeffrey
Brimhall has been our director and chief financial officer since March
2010. Mr. Brimhall has several years of accounting and financial
reporting experience. He is currently a Financial Reporting Analyst
with Resolute Energy Corp. and was previously an audit supervisor and audit
associate with Hein & Associates LLP and Grant Thornton LLP,
respectively. Mr. Brimhall earned his B.S. in accounting from Brigham
Young University in 2005 and is a Certified Public Accountant licensed in the
state of Colorado.
William
Lachmar currently serves as our director. He was our president
and chief executive officer from inception in 1997 and incorporation in 2002
until March 2010, when he resigned and was appointed as manager of environmental
remediation. Mr. Lachmar is a registered geologist in both California
and Texas, and is a member of the American Association of Petroleum Geologists,
the Association of Ground Water Scientists and Engineers, the Society of
Environmental Geoscientists, and the Houston Geological Society. Mr.
Lachmar received a B.S. in geology from the University of California at Los
Angeles in 1979.
Code
of Ethics
We have
adopted a code of ethics that applies to all of our employees, including our
executive officers, a copy of which was attached as Exhibit 14.01 to our Annual
Report on Form 10-K for the Year Ended March 31, 2009.
11
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers, and persons that own more than 10% of a
registered class of our equity securities to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of our equity securities. Officers, directors, and greater
than 10% stockholders are required to furnish us with copies of all Section
16(a) forms they file.
Based
solely upon a review of Forms 3, 4, and 5 and amendments thereto filed with the
Securities and Exchange Commission during or respecting the last fiscal year
ended March 31, 2010, no person that, at any time during the most recent fiscal
year, was a director, officer, beneficial owner of more than 10% of any class of
our equity securities, or any other person known to be subject to Section 16 of
the Exchange Act failed to file, on a timely basis, reports required by Section
16(a) of the Securities Exchange Act.
ITEM
11. EXECUTIVE COMPENSATION
Executive
Compensation
The
following table sets forth, for the last three fiscal years, the dollar value of
all cash and noncash compensation earned by the person who was our chief
executive officer (our “Named Executive Officer”) as of the end of the last
fiscal year:
Name
and Principal Position
|
Year
Ended March 31
|
Salary
($)
|
Bonus
($)
|
Stock
Award(s)
($)
|
Option
Awards ($) |
Non-Equity
Incentive Plan Compen-sation
|
Non-Qualified
Deferred Compen-
sation Earnings ($) |
All
Other Compen-
sation ($) |
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Jeffrey
Jensen CEO(1)
|
2010
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
Jeffrey
Brimhall CFO(1)
|
2010
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
William
C. Lachmar(2)
|
2010
|
$23,806
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
CEO
and CFO
|
2009
|
23,806
|
--
|
--
|
--
|
--
|
--
|
--
|
$23,806
|
2008
|
23,806
|
--
|
--
|
--
|
--
|
--
|
--
|
23,806
|
(1)
|
Hired
March 29, 2010, and serving without compensation until our financial
position permits us to pay
compensation.
|
(2)
|
Resigned
March 29, 2010.
|
We do not
have a written employment agreement with Mr. Lachmar. Mr. Lachmar
resigned as our chief executive and financial officer on March 29,
2010. He continues to serve as our manager of environmental
remediation at the same annual salary. Mr. Lachmar’s services may be
terminated by either party without any required notice.
Our
compensation committee reviews our financial condition and internal projections
for the following year before setting our officers’ salaries.
No other
employee received any compensation from us in the fiscal years ended March 31,
2010 and 2009.
We have
an informal profit-sharing plan that provides for an additional payment of up to
25% of Mr. Lachmar’s salary. To date, we have not made any payments
under this informal plan.
12
No
employees received any equity incentive awards during the fiscal years ended
March 31, 2010 and 2009.
We do not
have any plans that provide for the payment of any retirement benefits to any
employee, and there are no contracts, agreements, plans, or arrangements that
provide for any payment to any of our executive officers in the event of
resignation, retirement, or other termination of employment with
us.
Directors’
Compensation
Our
directors are not compensated for their services.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
Principal
Stockholders
The
following table sets forth, as of July 12, 2010, the name, address, and
stockholdings of each person who owns of record, or was known by us to own
beneficially, 5% or more of our common stock currently issued and outstanding;
the name and stockholdings of each director; and the stockholdings of all
executive officers and directors as a group. Unless otherwise
indicated, all shares consist of common stock, and all such shares are owned
beneficially and of record by the named person or group:
Name of Person or Group
|
Nature of Ownership
|
Amount
|
Percent
|
|||
Principal
Stockholders:
|
||||||
William
C. Lachmar
|
Common
Stock
|
3,000,000
|
92.1%
|
|||
1306
Edinger Avenue, Unit C
|
||||||
Santa
Ana, CA 92705
|
||||||
Directors:
|
||||||
William
C. Lachmar
|
----------See
above----------
|
|||||
Jeffrey
Brimhall
|
Common
Stock
|
--
|
--
|
|||
257
East 200 South, #490
|
||||||
Salt
Lake City, UT 84111
|
||||||
Jeffrey
Jensen
|
Common
Stock
|
16,000(1)
|
*
|
|||
257
East 200 South, #490
|
||||||
Salt
Lake City, UT 84111
|
||||||
All
Executive Officers and
|
||||||
Directors
as a Group (three persons):
|
Common
Stock
|
3,016,000(1)
|
92.6%
|
_______________
* Less
than 1%.
(1)
|
Shares
of common stock are held by Jeffrey Jensen, his wife, Casey Jensen, or JTJ
Holdings LLC, CLJ Holdings LLC, Data System Innovations, and Jensen
Consulting Group LLC, of which he and his spouse are members and/or
managers
|
13
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
We have
not entered into any transactions with related parties since the beginning of
the fiscal year ended March 31, 2010.
Director
Independence
None of
our directors is considered an independent member of our board of directors
under NASD Rule 5605(a)(2).
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit
Fees
We were
billed $31,765 and $26,580 for professional services rendered for the audit and
reviews of our annual and interim financial statements for fiscal years ended
March 31, 2010 and 2009, respectively.
Audit
Related Fees
For our
fiscal years ended March 31, 2010 and 2009, we did not incur any audit related
fees.
Tax
Fees
For our
fiscal years ended March 31, 2010 and 2009, we did not incur any fees for
professional services rendered for tax compliance.
Audit
and Nonaudit Service Preapproval Policy
In
accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated thereunder, the board of directors has, as of
September 25, 2006, adopted an informal approval policy that it believes will
result in an effective and efficient procedure to preapprove services performed
by the independent registered public accounting firm.
Audit
Services. Audit services
include the annual financial statement audit (including quarterly reviews) and
other procedures required to be performed by the independent registered public
accounting firm to be able to form an opinion on our financial
statements. The audit committee preapproves specified annual audit
services engagement terms and fees and other specified audit
fees. All other audit services must be specifically preapproved by
the audit committee. The audit committee monitors the audit services
engagement and may approve, if necessary, any changes in terms, conditions, and
fees resulting from changes in audit scope or other items.
Audit-Related
Services. Audit-related
services are assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements that historically
have been provided to us by the independent registered public accounting firm
and are consistent with the Securities and Exchange Commission’s rules on
auditor independence. All audit-related services must be preapproved
by the audit committee.
Tax
Services. The audit
committee must preapprove any tax services.
14
All Other
Services. Other services
are services provided by the independent registered public accounting firm that
do not fall within the established audit, audit-related, and tax services
categories. The audit committee must preapprove any other
services.
Procedures. All proposals for
services to be provided by the independent registered public accounting firm,
which must include a detailed description of the services to be rendered and the
amount of corresponding fees, are submitted to the audit committee.
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number*
|
Title
of Document
|
Location
|
||
Item
2
|
Plan
of Acquisition, Reorganization, Arrangement, Liquidation or
Succession
|
|||
2.01
|
Articles
of Merger
|
Incorporated
by reference from initial filing of the registration statement on Form 10,
SEC File No. 000-53182, filed June 23, 2008.
|
||
Item
3.
|
Articles
of Incorporation and Bylaws
|
|||
3.01
|
Articles
of Incorporation
|
Incorporated
by reference from initial filing of the registration statement on Form 10,
SEC File No. 000-53182, filed June 23, 2008.
|
||
3.02
|
Bylaws
|
Incorporated
by reference from initial filing of the registration statement on Form 10,
SEC File No. 000-53182, filed June 23, 2008.
|
||
Item
4.
|
Instruments
Defining the Rights of Security Holders, Including
Indentures
|
|||
4.01
|
Specimen
stock certificate—Common Stock
|
Incorporated
by reference from initial filing of the registration statement on Form 10,
SEC File No. 000-53182, filed June 23, 2008.
|
||
Item
10.
|
Material
Contracts
|
|||
10.01
|
License
Agreement between Geo Point Technologies, Inc. and Bill Lachmar, as of
January 31, 2008
|
Incorporated
by reference from initial filing of the registration statement on Form 10,
SEC File No. 000-53182, filed June 23,
2008.
|
15
Exhibit Number* |
Title of Document | Location | ||
10.02
|
Share
Exchange Agreement among Geo Point Technologies, Inc., GSM Oil Holdings
Limited, and Summit Trustees PLLC, dated May 7, 2010
|
This
filing.
|
||
10.03
|
Engagement
Agreement with National Securities Corp. dated May 28,
2010
|
This
filing.
|
||
10.04
|
Form
of Warrant with schedule
|
This
filing.
|
||
Item
14.
|
Code
of Ethics
|
|||
14.01
|
Code
of Ethics
|
Incorporated
by reference from our annual report on Form 10-K for the year ended March
31, 2009, filed June 24, 2009.
|
||
Item
21.
|
Subsidiaries
|
|||
21.01
|
Schedule
of Subsidiaries
|
Incorporated
by reference from our annual report on Form 10-K for the year ended March
31, 2009, filed June 24, 2009.
|
||
Item
31.
|
Rule
13a-14(a)/15d-14(a) Certifications
|
|||
31.01
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14
|
This
filing.
|
||
31.02
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14
|
This
filing.
|
||
Item
32.
|
Section
1350 Certifications
|
|||
32.01
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
This
filing.
|
||
32.02
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
This
filing.
|
______________
*
|
The
number preceding the decimal indicates the applicable SEC reference number
in Item 601, and the number following the decimal indicating the sequence
of the particular document.
|
16
SIGNATURES
Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GEO
POINT TECHNOLOGIES, INC.
|
||
Date: July 14,
2010
|
By:
|
/s/
Jeffrey Jensen
|
Jeffrey
Jensen
|
||
President,
Principal Executive Officer
|
||
Date: July 14,
2010
|
By:
|
/s/
Jeffrey Brimhall
|
Jeffrey
Brimhall
|
||
Principal
Financial Officer
|
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date: July 14,
2010
|
/s/
Jeffrey Jensen
|
Jeffrey
Jensen, Director
|
|
President
and Principal Executive Officer
|
|
Date: July 14,
2010
|
/s/
William C. Lachmar
|
William
C. Lachmar, Director
|
|
Date: July 14,
2010
|
/s/
Jeffrey Brimhall
|
Jeffrey
Brimhall, Director
|
|
Principal
Financial Officer, Secretary and
Treasurer
|
17
INDEX
TO FINANCIAL STATEMENTS
|
||
Financial
Statements of Geo Point Technologies, Inc.
|
||
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
Balance
Sheets as of March 31, 2010 and 2009
|
F-3
|
|
Statements
of Operations for the Years Ended March 31, 2010 and 2009
|
F-4
|
|
Statements
of Shareholders’ Equity for the Years Ended March 31, 2009
|
||
and
2010
|
F-5
|
|
Statements
of Cash Flows for the Years Ended March 31, 2010 and 2009
|
F-6
|
|
Notes
to the Financial Statements
|
F-7
|
F-1
HANSEN, BARNETT & MAXWELL,
P.C.
|
|
A
Professional Corporation
|
|
CERTIFIED
PUBLIC ACCOUNTANTS
|
|
5
Triad Center, Suite 750
|
|
Salt
Lake City, UT 84180-1128
|
|
Phone:
(801) 532-2200
|
|
Fax:
(801) 532-7944
|
|
www.hbmcpas.com
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and the Shareholders
We have
audited the accompanying balance sheets of Geo Point Technologies, Inc. (the
“Company”) as of March 31, 2010 and 2009, and the related statements of
operations, shareholders’ equity and cash flows for each of the years then
ended. 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 Geo Point Technologies, Inc. as of
March 31, 2010 and 2009, and the results of its operations and its cash flows
for each of the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/
HANSEN, BARNETT & MAXWELL, P.C.
Salt Lake
City, Utah
July 14,
2010
F-2
GEO
POINT TECHNOLOGIES, INC.
|
||||||
BALANCE
SHEETS
|
||||||
March
31,
|
March
31,
|
|||||
2010
|
2009
|
|||||
ASSETS
|
||||||
Current
Assets
|
||||||
Cash
|
$ |
121,848
|
$ |
156,807
|
||
Accounts
receivable, net of allowance for bad debt
|
||||||
of
$3,618 and $60,333, respectively
|
60,850
|
11,228
|
||||
Prepaid
expenses and other current assets
|
-
|
4,125
|
||||
Total
Current Assets
|
182,698
|
172,160
|
||||
Furniture
and equipment, net of accumulated depreciation of $39,815
and
|
||||||
$34,819,
respectively
|
8,362
|
13,358
|
||||
Other
assets
|
1,000
|
1,000
|
||||
Total
Assets
|
$ |
192,060
|
$ |
186,518
|
||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||
Current
Liabilities
|
||||||
Accounts
payable and accrued liabilities
|
$ |
66,473
|
$ |
69,400
|
||
Income
taxes payable
|
-
|
13,887
|
||||
Total
Current Liabilities
|
66,473
|
83,287
|
||||
Revolving
Credit Facility
|
-
|
-
|
||||
Long-Term
Convertible Notes Payable, net of unamortized discount
|
||||||
of
$1,165,617 at December 31, 2006
|
-
|
-
|
||||
Total
Liabilities
|
66,473
|
83,287
|
||||
Shareholders'
Equity
|
||||||
Preferred
Stock - $0.001 par value; 5,000,000 shares authorized;
|
||||||
none
outstanding
|
-
|
-
|
||||
Common
stock - $0.001 par value; 100,000,000 shares authorized;
|
||||||
3,257,000
and 3,257,000 shares issued and outstanding, respectively
|
3,257
|
3,257
|
||||
Additional
paid-in capital
|
246,693
|
246,693
|
||||
Accumulated
deficit
|
(124,363)
|
(146,719)
|
||||
Total
Shareholders' Equity
|
125,587
|
103,231
|
||||
Total
Liabilities and Shareholders' Equity
|
$ |
192,060
|
$ |
186,518
|
||
The
accompanying notes are an integral part of the financial
statements.
F-3
GEO
POINT TECHNOLOGIES, INC.
|
||||||
STATEMENTS
OF OPERATIONS
|
||||||
For
the Years Ended
|
||||||
March
31,
|
||||||
2010
|
2009
|
|||||
Sales
|
$ |
185,986
|
$ |
211,236
|
||
Cost
of Sales
|
61,001
|
60,262
|
||||
Gross
Profit
|
124,985
|
150,974
|
||||
Operating
Expenses
|
||||||
General
and administrative
|
135,652
|
277,901
|
||||
Research
and development
|
37,042
|
2,451
|
||||
Total
Operating Expenses
|
172,694
|
280,352
|
||||
Operating
Loss
|
(47,709)
|
(129,378)
|
||||
Collection
of receivables deemed uncollectible
|
70,186
|
-
|
||||
Other
income (expense)
|
(121)
|
1,958
|
||||
Income
(loss) before provision for income taxes
|
22,356
|
(127,420)
|
||||
Provision
for income taxes
|
-
|
858
|
||||
Net
Income (Loss)
|
$ |
22,356
|
$ |
(128,278)
|
||
Basic
and Diluted Income (Loss) per Share
|
$ |
0.01
|
$ |
(0.04)
|
||
Basic
and Diluted Weighted-Average
|
||||||
Common
Shares Outstanding
|
3,257,000
|
3,257,000
|
||||
The
accompanying notes are an integral part of the financial
statements.
F-4
GEO
POINT TECHNOLOGIES, INC.
|
|||||||||
STATEMENT
OF SHAREHOLDERS’ EQUITY
|
|||||||||
FOR
THE YEARS ENDED MARCH 31, 2009 AND 2010
|
|||||||||
Additional
|
|||||||||
Common
Stock
|
Paid-in
|
Accumulated
|
|||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
|||||
Balance
at March 31, 2008
|
3,257,000
|
$ 3,257
|
$ 246,693
|
$ (18,441)
|
$ 231,509
|
||||
Net
loss
|
-
|
-
|
-
|
(128,278)
|
(128,278)
|
||||
Balance
at March 31, 2009
|
3,257,000
|
3,257
|
246,693
|
(146,719)
|
103,231
|
||||
Net
income
|
-
|
-
|
-
|
22,356
|
22,356
|
||||
Balance
at March 31, 2010
|
3,257,000
|
$ 3,257
|
$ 246,693
|
$ (124,363)
|
$ 125,587
|
||||
The
accompanying notes are an integral part of the financial
statements.
F-5
GEO
POINT TECHNOLOGIES, INC.
|
|||||
STATEMENTS
OF CASH FLOWS
|
|||||
For
the Year Ended
|
|||||
March
31,
|
|||||
2010
|
2009
|
||||
Cash
Flows from Operating Activities:
|
|||||
Net
income (loss)
|
$ |
22,356
|
$ |
(128,278)
|
|
Adjustments
to reconcile net income (loss) to net cash
|
|||||
from
operating activities:
|
|||||
Depreciation
|
4,996
|
12,483
|
|||
Bad
debt
|
-
|
134,636
|
|||
Changes
in assets and liabilities:
|
|||||
Accounts
receivable
|
(49,621)
|
(44,677)
|
|||
Prepaid
expenses and other current assets
|
4,125
|
(900)
|
|||
Accounts
payable and accrued liabilities
|
(2,928)
|
(7,377)
|
|||
Income
taxes payable
|
(13,887)
|
-
|
|||
Net
Cash Used in Operating Activities
|
(34,959)
|
(34,113)
|
|||
Cash
Flows from Investing Activities:
|
|||||
Purchase
of property and equipment
|
-
|
(1,800)
|
|||
Payment
from related party notes receivable
|
-
|
-
|
|||
Net
Cash Used in Investing Activities
|
-
|
(1,800)
|
|||
Net
Change in Cash
|
(34,959)
|
(35,913)
|
|||
Cash
at Beginning of Period
|
$ |
156,807
|
$ |
192,720
|
|
Cash
at End of Period
|
$ |
121,848
|
$ |
156,807
|
|
Supplement
Disclosure of Cash Flow Information:
|
|||||
Cash
paid for interest
|
$ |
-
|
$ |
-
|
|
Cash
paid for income taxes
|
$ |
7,197
|
$ |
-
|
|
The
accompanying notes are an integral part of the financial
statements.
F-6
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
NOTE
1 – ORGANIZATION AND BUSINESS
Geo Point
Technologies, Inc. (the “Company”), was incorporated in the state of California
on November 26, 2002. The Company’s operations are located in Santa
Ana, California. In 2006, the Company formed Geo Point Merger Co., a
Utah corporation, for the purpose of moving the domicile of the Company from
California to Utah. The move was accomplished with an Agreement and
Articles of Merger entered into by the two companies. Under the terms
of the merger, upon execution, the two companies merged, and the Utah company
was designated as the surviving corporation. The sole shareholder of
the California company surrendered his stock and received one share of stock in
the Utah company for every share of the California company. The
articles of incorporation and bylaws of the Utah company became the articles and
bylaws of the surviving corporation. The Utah company furthermore
acquired all the assets and obligations of any kind of the California
company. Finally, upon execution of the Agreement and Articles of
Merger, the name of Geo Point Merger Co., was changed to Geo Point Technologies,
Inc.
In
connection with this recapitalization, the Company issued 3,000,000 shares of
common stock to the sole shareholder for all the outstanding common stock of the
California entity. Both entities were under common control and thus,
the 3,000,000 shares have been reflected as being outstanding since
inception.
The
Company provides geological and earth study services related to: land surveying
for new construction; soil testing and environmental risk and impact
assessments; natural resource assessments with an emphasis on oil; and gas
deposit discovery.
In May
2010, the Company entered into a share exchange agreement with GSM Oil Holdings
Limited (“GSM Oil Holdings”), a limited liability company organized in Cyprus,
and Summit Trustees PLLC, a Utah professional limited liability company, to
acquire all of the issued and outstanding stock of GSM Oil
Holdings. GSM Oil Holdings is in the process of acquiring Sinur Oil
LLP through its wholly owned Dutch subsidiary, GSM Oil B.V. Sinur Oil
LLP is a development-stage oil refining company with operations in the southern
area of Kazakhstan and has recently completed construction of its initial
“micro” oil refinery. At closing, the Company will issue 26,808,000
shares of its common stock to Summit Trustees PLLC and will receive all of the
outstanding shares of GSM Oil Holdings. The Company is currently
determining the impact of the transaction and expects to account for it as a
reverse merger.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 amounts reported in the financial
statements and the accompanying notes to financial statements. Actual
results could differ from those estimates. Significant estimates made
by management include allowance for doubtful accounts and the useful life of
property and equipment.
F-7
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
Fair
Value of Financial Instruments
On April
1, 2008, the Company adopted the accounting guidance under Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements, as
well as certain related FASB staff positions. This guidance defines
fair value as the price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements
for assets and liabilities required to be recorded at fair value, the Company
considers the principal or most advantageous market in which it would transact
business and considers assumptions that marketplace participants would use when
pricing the asset or liability, such as inherent risk, transfer restrictions,
and risk of nonperformance.
The
guidance also establishes a fair value hierarchy for measurements of fair value
as follows:
●
|
Level
1 – quoted market prices in active markets for identical assets or
liabilities.
|
●
|
Level
2 – inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices in active markets for similar assets or
liabilities, quoted prices for identical or similar assets or liabilities
in markets that are not active, or other inputs that are observable or can
be corroborated by observable market data for substantially the full term
of the assets or liabilities.
|
●
|
Level
3 – unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the assets
or liabilities.
|
As of
March 31, 2010 and 2009, the Company did not have Level 1, 2, or 3 financial
assets, nor did it have any financial liabilities. Financial
instruments consist of cash, accounts receivable, and payables. The
fair value of financial instruments approximated their carrying values as of
March 31, 2010 and 2009.
Concentration
of Credit Risks
During
the year ended March 31, 2010, services provided to three customers accounted
for 20%, 13%, and 29% of total revenues. During the year ended March
31, 2009, services provided to two customers accounted for 29% and 16% of total
revenues. As of March 31, 2010, one customer accounted for 89% of the
accounts receivable balance. As of March 31, 2009, two customers
accounted for 51% and 48% of the accounts receivable
balance. Management believes the loss of these customers could have a
material impact on the Company.
Reclassifications
Certain
reclassifications have been made in the financial statements for the year ended
March 31, 2009, to conform to the March 31, 2010, presentation. The
reclassification had no effect on net income.
F-8
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
Cash
and Cash Equivalents
Cash and short-term investments with an
original maturity of three months or less are considered to be cash and cash
equivalents. At March 31, 2010 and 2009, the Company did not
have any cash deposits in excess of FDIC limits.
The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of the Company’s customers to make required
payments. The Company considers the following factors when
determining if collection of a fee is reasonably assured: customer
creditworthiness and past transaction history with the customer, if the Company
has no previous experience with the customer, the Company typically requests
retainers or obtains financial information sufficient to extend the
credit. If these factors do not indicate collection is reasonably
assured, revenue is deferred until collection becomes reasonably assured, which
is generally upon receipt of cash. If the financial condition of the
Company’s customers deteriorates, additional allowances are made. The
Company increased the allowance by $134,636 during the year ended March 31,
2009. This increase related to two customers for sales generated in
the first two quarters of fiscal 2009 and was needed due to the declining
financial position of the customers during the third and fourth quarter of the
Company’s fiscal year and, in addition, to the decrease in value of the assets
securing the receivable. During the year ended March 31, 2010, the
Company collected accounts receivable of $70,186, which had previously been
included in its doubtful accounts. The Company accounted for these
collections as other income on the accompanying statement of
operations.
Property
and Equipment
Property
and equipment are stated at cost, less accumulated depreciation and
amortization. Major additions and improvements are capitalized, while
minor equipment as well as repairs and maintenance costs are expensed when
incurred. Depreciation and amortization are computed using the
straight-line method over the estimated useful lives of the related
assets. Computers, other office equipment, and furniture are
depreciated over a period of three to seven years. Vehicles are
depreciated over five years.
On
retirement or disposition of property and equipment, the cost and related
accumulated depreciation and amortization are removed from the accounts and any
resulting gain or loss is recognized in the statement of
operations.
Revenue
Recognition
The
Company recognizes revenue when it is realized and earned. The
Company considers revenue realized or realizable and earned when: (1) it has
persuasive evidence of an arrangement; (2) services have been rendered and are
invoiced; (3) the price is fixed or determinable; and (4) collectibility is
reasonably assured.
F-9
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
The
Company’s primary source of revenue has been in its environmental division,
providing historical site data searches, preliminary investigation and drilling,
site characterization modeling, regulatory agency liaison, and full
environmental clean-ups using such methods as vapor extraction, air sparging,
bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release
Compound) injection treatment, air stripping, and ionic exchange.
The
Company also has operations associated with the oil and gas segment that have
limited activity and have not yet generated revenues.
Research
and Development
Research
and development is primarily related to developing and improving methods to
detect oil and gas reserves. Research and development expenses are
expensed when incurred.
The
Company utilizes the liability method of accounting for income taxes as set
forth in ASC 740, Income
Taxes. Under the liability method, deferred taxes are
determined based on the temporary differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates. A
valuation allowance is recorded when it is more likely than not that some of the
deferred tax assets will not be realized. The Company also determines
its tax contingencies in accordance with ASC 450, Contingencies. The
Company records estimated tax liabilities to the extent the contingencies are
probable and can be reasonably estimated.
In July
2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes— an interpretation of FASB Statement No. 109 (“FIN 48”), which was
codified into ASC 740, Income
Taxes. FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise’s financial statements in accordance
with Statement of Financial Accounting Standards, or SFAS, No. 109, Accounting for Income
Taxes. FIN 48 describes a recognition threshold and
measurement attribute for the recognition and measurement of tax positions taken
or expected to be taken in a tax return and also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after December 15, 2006. The cumulative effect of
adopting FIN 48 is required to be reported as an adjustment to the opening
balance of retained earnings (or other appropriate components of equity) for
that fiscal year, presented separately. The adoption of FIN 48 did
not have a material impact on the Company’s financial statements.
F-10
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
Segment
Reporting
The
Company reports its segments under SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information (“SFAS 131”), which was codified into
ASC 280, Segment
Reporting, which establishes standards for reporting information
regarding operating segments in annual financial statements and requires
selected information for those segments to be presented in interim financial
reports issued to stockholders. SFAS 131 also establishes standards
for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an
enterprise about which separate discrete financial information is available for
evaluation by the chief operating decision maker, or decision making group, in
making decisions on how to allocate resources and assess
performance. At March 31, 2007, the Company had two reporting
segments under SFAS 131, environmental and engineering services and oil and gas
properties. During fiscal 2007, the Company commenced its oil and gas
operations. At March 31, 2010 and 2009, this segment had no assets,
no revenues, and limited expenses.
Basic
and Diluted Loss per Common Share
Basic
loss per share is calculated by dividing net loss by the weighted average common
shares outstanding during the period. Diluted loss per share reflects
the potential dilution to basic earnings per share that could occur upon
conversion or exercise of securities, options, or other such items to common
shares using the treasury stock method, based upon the weighted average fair
value of the Company’s common shares during the period. As of March
31, 2010 and 2009, the Company did not have any dilutive
securities.
Recent
Accounting Pronouncements
In
January 2010, new accounting guidance on fair value measurements was issued that
requires: (i) an entity to disclose separately the amounts of significant
transfers in and out of Level 1 and 2 fair value measurements and describe the
reasons for such transfers; and (ii) separate presentation of purchases, sales,
issuances, and settlements for Level 3 fair value measurements. The
new accounting guidance also clarifies the disclosure requirements about the
inputs and valuation techniques for Level 2 or Level 3 fair value
measurements. This accounting guidance will be effective for
financial statements issued for fiscal years beginning after December 15, 2009,
except for the disclosures about purchases, sales, issuances, and settlements in
the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010. The Company does not believe that
adoption of this new accounting guidance will have a material impact on the
Company’s financial statements.
F-11
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
NOTE
3 – PROPERTY AND EQUIPMENT
Property
and equipment are stated at cost, net of accumulated depreciation, and are
comprised of the following at March 31, 2010 and 2009:
2010
|
2009
|
||
Computers
and equipment
|
$
34,326
|
$
34,326
|
|
Vehicles
|
13,851
|
13,851
|
|
Total
|
48,177
|
48,177
|
|
Less:
accumulated depreciation
|
(39,815)
|
(34,819)
|
|
Net
Value
|
$ 8,362
|
$
13,358
|
Depreciation
expense for the years ended March 31, 2010 and 2009, was $4,996 and $12,483,
respectively.
NOTE
4 – INCOME TAXES
The
provision (benefit) for income taxes consisted of the following for the years
ended March 31, 2010 and 2009:
2010
|
2009
|
|||
Current
|
||||
Federal
|
$ -
|
$ -
|
||
State
|
-
|
858
|
||
-
|
858
|
|||
Deferred
|
||||
Federal
|
7,643
|
(43,040)
|
||
State
|
2,653
|
(7,895)
|
||
Valuation
allowance
|
(10,296)
|
50,935
|
||
Provision/(Benefit)
|
$ -
|
$ 858
|
The
following is a reconciliation of the U.S. federal statutory rate to the actual
tax rate for the years ended March 31, 2010 and 2009:
2010
|
2009
|
||
Federal
tax at statutory rate
|
34.0%
|
34.0%
|
|
Permanent
differences:
|
|||
State
income taxes, net of federal benefit
|
8.3%
|
8.3%
|
|
Other
|
(2.3)%
|
(1.6)%
|
|
Change
in valuation allowance
|
(40.0)%
|
(40.0)%
|
|
Benefit
in net operating loss usage
|
-
|
-
|
|
Provision/(Benefit)
|
0.0%
|
0.7%
|
F-12
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
Deferred
tax assets and liabilities at March 31, 2010 and 2009, are as
follows:
2010
|
2009
|
|||
Deferred
Income Taxes
|
||||
Current
–
|
Allowance
for doubtful accounts
|
$ 9,168
|
$25,521
|
|
Net
operating loss carryforwards
|
51,478
|
45,420
|
||
Valuation
allowance
|
(60,646)
|
(70,941)
|
||
Net
deferred tax asset
|
$ -
|
$ -
|
During
the years ended March 31, 2010 and 2009, the Company’s valuation allowance
decreased by $10,296 and increased by $50,935, respectively. As of
March 31, 2010, the Company’s net operating loss carryforwards begin to expire
in 2029 for federal purposes and 2014 for state purposes.
NOTE
5 – STOCKHOLDERS’ EQUITY
Preferred
Stock
Under the
Company’s articles of incorporation, the board of directors is authorized,
without stockholder action, to issue up to 5,000,000 shares of preferred stock
in one or more series and to fix the number of shares and rights, preferences,
and limitations of each series. Among the specific matters that may
be determined by the board of directors are the dividend rate, the redemption
price, if any, conversion rights, if any, the amount payable in the event of any
voluntary liquidation or dissolution, and voting rights, if any. If
the Company offers preferred stock, the specific designations and rights will be
described in amended articles of incorporation.
NOTE
6 – SUBSEQUENT EVENTS
See Note
1 for discussion regarding pending acquisition of GSM Oil Holdings
Limited.
In May
2010, the Company entered into an agreement with a third party to provide
assistance in capital raising and business advisory services. Under
the terms of the agreement, the Company is required to pay a total of $20,000
over the course of three months. In addition, the Company granted
warrants to purchase 250,000 shares of common stock, exercisable at a $1.75 per
share, which are exercisable immediately. Warrants to purchase an
additional 250,000 shares may be issued upon the acceptance of a term sheet by
the Company. The warrants expire five years from the date of
issuance. In addition to the warrants, the Company is required to pay
the third party 6% of equity capital raised, 3% of debt raised, and warrants to
purchase 6% of the number of common shares purchased in the
offering. In addition, a cash success fee of the greater of 2-3% of
any transaction and $100,000 may also be payable under the
agreement.
F-13
GEO
POINT TECHNOLOGIES, INC.
NOTES
TO THE FINANCIAL STATEMENTS
MARCH
31, 2010 and 2009
The
Company will account for the warrants at their fair value using the
Black-Scholes model. The Company valued the vested warrants to
purchase 250,000 shares on the date of issuance at $407,634 and expensed on
issuance as there were no future performance requirements. The
following variables were used in the valuation; expected life of five years;
volatility of 49%, risk-free rate of 1.95%, and no dividends. The
Company is currently determining the financial statement impact of the
contingent warrants.
F-14