Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.20549
FORM 10-K/A
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2010
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
Commission File Number: 000-453388
Freedom Environmental Services, Inc.
(Name of small business issuer as specified in its charter)
| Delaware | 56-2291458 |
| State of Incorporation | IRS Employer Identification No. |
11372 United Way
Orlando, FL32819
(Address of principal executive offices)
(407) 905-5000
(Issuer’s telephone number)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value per share
(Title of Class)
Common Stock, $.001 Par Value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.o Yes x No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.o Yes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o The registrant has not yet transitioned into this rule.
Indicate by check mark if disclosure of delinquent filers pursuant 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 definitions of “large accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non–Accelerated filer
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¨
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Small reporting company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).
Yes ¨ No x
Aggregate market value of the voting stock held by non-affiliates: $1,798,182as based on last reported sales price of such stock as of the last business day of the registrant’s most recently completed second fiscal quarter. The voting stock held by non-affiliates on that date consisted of 54,655,992 shares of common stock.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of June 2, 2011, there were 122,018,434 shares of common stock, par value $0.001, issued and outstanding and 5,736,111 shares of preferred stock, par value $0.001, issued and outstanding.
Documents Incorporated by Reference: None
EXPLANATORY NOTE:
The Board of Directors and officers of the Company have decided to revise and amend certain disclosures in this Form 10-K/A for the year ended December 31, 2010. Attached is the Statement of Cash Flows that had an inadvertent typo of $1,666 between Common Stock issued for Services and Common Stock issued for the conversion of debt and interest for year ended December 31, 2009. Further the company incorporated the complete auditor report including paragraph which included the going concern statement.
Further, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by our principal executive officer and principal financial officer are being filed as exhibits to this Form 10-K/A under Item 15 of Part IV hereof.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
of Freedom Environmental Services, Inc.
Orlando, Florida
We have audited the accompanying consolidated balance sheet of Freedom Environmental Services, Inc. (Company) and subsidiary as of December 31, 2009, and the related consolidated statements of income, stockholders' equity (deficit), and cash flows for the year 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 audit.
We conducted our audit 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Freedom Environmental Services, Inc. and subsidiary as of December 31, 2009 and 2008, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed further in Note 2, the Company has incurred significant losses. The Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in regard to these matters is also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Tarvaran Askelson& Company, LLP
Laguna Niguel, California
May 5, 2010
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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Years Ended December 31,
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2010
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2009
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Net loss
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$ | (2,540,899 | ) | $ | (4,948,484 | ) | ||
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Adjustments to reconcile net loss to net cash
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used in operating activities:
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Bad debt expense
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59,243 | - | ||||||
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Depreciation and amortization
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174,197 | 8,712 | ||||||
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Common stock issued for services
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1,410,851 | 3,904,498 | ||||||
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Common stock issued for services - related parties
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58,125 | - | ||||||
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Goodwill impairment
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132,595 | - | ||||||
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Common stock issued for conversion of debt
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- | 416,375 | ||||||
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Beneficial Conversion Feature / amortization of debt discount
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139,144 | - | ||||||
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Changes in operating assets and liabilities:
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Accounts receivables
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10,310 | (8,277 | ) | |||||
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Other assets
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(5,548 | ) | 6,686 | |||||
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Inventory
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(36,392 | ) | - | |||||
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Deposits
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- | 5,049 | ||||||
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Accounts payables
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227,258 | 91,899 | ||||||
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Accrued expenses
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223,872 | 426,984 | ||||||
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Accrued interest - related parties
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30,937 | - | ||||||
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Net cash used in operating activities
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(116,307 | ) | (96,558 | ) | ||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Cash received on acquisition of Brownies
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207,163 | - | ||||||
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Purchase of equipment
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(902,494 | ) | - | |||||
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Net cash used in investing activities
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(695,331 | ) | - | |||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Bank overdraft
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(5,037 | ) | (15,434 | ) | ||||
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Repayment of note payable
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(569,442 | ) | (9,994 | ) | ||||
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Repayment of note payable - related parties
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(93,679 | ) | - | |||||
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Repayment of note payable - related parties
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- | (1,818 | ) | |||||
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Proceeds from note payable
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1,275,000 | - | ||||||
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Proceeds from note payable - related parties
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247,430 | 123,804 | ||||||
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Proceeds from convertible note payable
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132,500 | - | ||||||
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Net cash provided by financing activities
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986,772 | 96,558 | ||||||
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INCREASE IN CASH
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175,134 | - | ||||||
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CASH, BEGINNING OF YEAR
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- | - | ||||||
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CASH, END OF YEAR
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$ | 175,134 | $ | - | ||||
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SUPPLEMENTAL CASH FLOW INFORMATION
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Interest paid
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$ | 29,209 | $ | 137,940 | ||||
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Taxes paid
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$ | - | $ | - | ||||
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NONCASH INVESTING AND FINANCING TRANSACTIONS
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Issuance of common stock for the conversion of debt
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$ | 447,628 | $ | 418,041 | ||||
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Extinguishment of Debt per Asset Purchase Agreement
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$ | 1,247,155 | $ | - | ||||
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Warrant issued for asset acquisition
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$ | 95,308 | $ | - | ||||
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Common stock issued as collateral for debt
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$ | 10,000 | ||||||
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Common stock issued for payables
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$ | 185,000 | $ | - | ||||
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Preferred stock issued for payables
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$ | 47,657 | $ | - | ||||
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The accompanying notes are an integral part of these consolidated financial statements.
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RESTATEMENT OF DECEMBER 31, 2009 STATEMENT OF CASH FLOW
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December 31, 2009
Originally Stated
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December 31, 2009
Restated
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December 31, 2009
Restatement
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Common Stock issued for services
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3,902,832,
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1,666
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3,904,498
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Common Stock issued for conversion of debt and services
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418,041
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(1,666)
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416,375
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ITEM 15: SIGNATURES
SIGNATURES
In accordance with 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, there unto duly authorized.
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Registrant
Date: July 24, 2011
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Freedom Environmental Services, Inc.
By: /s/ Michael Borish
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Michael Borish
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Chief Executive Officer (Principal Executive Officer), President
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Date: July 24, 2011
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By: /s/ Michael Borish
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Michael Borish
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Chief Financial Officer (Principal Accounting Officer),
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In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
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Date: July 24, 2011
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By: /s/ Michael Borish
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Michael Borish
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Chairman
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