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EX-32 - EX-32.1 SECTION 906 CERTIFICATION - EXTREME BIODIESEL, INC.bookmerge10qa033111ex321.htm
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EX-31 - EX-31.1 SECTION 302 CERTIFICATION - EXTREME BIODIESEL, INC.bookmerge10qa033111ex311.htm




U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q/A


(Mark One)


   X  .

Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

 

For the quarterly period ended March 31, 2011

 

 

       .

Transition Report under Section 13 or 15(d) of the Exchange Act

 

 

 

For the Transition Period from ________to __________

 

 

Commission File Number: 333-152837


BookMerge Technologies Inc.

(Exact Name of Registrant as Specified in its Charter)


NEVADA

36-4627722

(State of other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification Number)


1560 N. Maple Street

 

Corona CA

92880

(Address of principal executive offices)

(Zip Code)


Registrant's Phone: (951) 734-5344



Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   X  . No      .


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

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  .


As of Mar. 31, 2011, the issuer had 102,438,650 shares of common stock issued and outstanding.











 

TABLE OF CONTENTS

Page

 

PART I – FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

14

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

16

Item 4.

Controls and Procedures

16

 

PART II – OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

17

Item 1A.

Risk Factors

17

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

17

Item 3.

Defaults Upon Senior Securities

17

Item 4.

Submission of Matters to a Vote of Security Holders

17

Item 5.

Other Information

17

Item 6.

Exhibits

17



2





ITEM 1 FINANCIAL STATEMENTS


EXTREME GREEN TECHNOLOGIES INC.

 CONSOLIDATED BALANCE SHEET

 as at March 31, 2011 (Unaudited) and June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 March 31,

 

 June 30,

 

 

 

 

 

2011

 

2010

 

ASSETS

 

(Unaudited)

 

Note 1

 

 

 

 

 

 

 

 

 Current Assets

 

 

 

 

 

 Cash and cash equivalents

$

          1,417

$

          8,785

 

 Accounts Receivable

 

          45,283

 

          11,183

 

 Inventory

 

          37,651

 

          62,437

 

 

 Total Current Assets

 

          84,351

 

          82,405

 

 

 

 

 

 

 

 

 Property plant and equipment, net of accumulated depreciation

 

        717,262

 

        781,331

 

 

 

 

 

 

 

 

 Other Assets

 

 

 

 

 

 Notes Receivable

 

          40,000

 

          40,000

 

 Deposits

 

          18,036

 

          18,036

 

 

 

 

 

 

 

 

 

 

 Total Other Assets

 

          58,036

 

          18,036

 

 

 

 

 

 

 

 

 

 TOTAL ASSETS

$

     859,649

$

      921,772

 

 

 

 

 

 

 

 

 LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 Current Liabilities

 

 

 

 

 

 Accounts payable and accrued expenses

$

        157,863

$

        117,230

 

 Settlement Agreements

 

          17,472

 

 

 

 Credit Cards

 

                  -

 

          46,495

 

 Bank Line of Credit

 

          78,212

 

          49,965

 

 Deferred Payroll

 

 

 

            8,000

 

 Deferred Rent

 

            6,211

 

            9,221

 

 Current portion, long term debt

 

            6,000

 

            6,000

 

 

 Total Current Liabilities

 

        265,758

 

        236,911

 

 

 

 

 

 

 

 

 Long Term Debt

 

 

 

 

 

 Obligation under capital lease

 

                  -

 

            9,291

 

 

 

 

 

 

 

 

 Other Liabilities

 

 

 

 

 

 Notes Payable

 

          95,000

 

          95,000

 

 Deferred Investments

 

        104,000

 

        114,000

 

 Shareholder Loans

 

          54,000

 

          52,000

 

 

 Total Other Liabilities

 

        253,000

 

        261,000

 

 

 

 

 

 

 

 

 

 

 Total Liabilities

 

        518,758

 

        507,202

 

 

 

 

 

 

 

 

 Stockholders' Equity

 

 

 

 

 

Common Stock, $0.001 par value, authorized 200,000,000; issued and outstanding 80,090,500 as at June 30, 2010; 102,438,650 as at March 31, 2011

 

        102,439

 

          80,091

 

 Additional paid-in capital

 

      1,760,776

 

      1,536,209

 

 Deficit

 

    (1,522,324)

 

    (1,201,730)

 

 

 Total Stockholders' Equity

 

        340,891

 

        414,570

 

 

 

 

 

 

 

 

 

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

      859,649

$

      921,772




3






EXTREME GREEN TECHNOLOGIES INC.

 CONSOLIDATED STATEMENT OF OPERATIONS

 For the nine months and three months ended March 31, 2011 and 2010

 (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 For the three months ended

 

 For the nine months ended

 

 

 

 

 March 31,  

 

 March 31,

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 Revenues

$

      71,552

$

       18,201

$

       110,088

$

       45,382

 

 Cost of Sales exclusive of depreciation expense

 

        10,367

 

        19,910

 

        93,798

 

        58,317

 

 

 

 

 

 

 

 

 

 

 

 

 Gross Profit

 

        61,185

 

         (1,709)

 

        16,290

 

       (12,935)

 

 

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses

 

 

 

 

 

 

 

 

 

 

 Advertising and Marketing

 

          1,394

 

          4,729

 

          7,679

 

          7,886

 

 

 Occupancy Costs

 

        26,297

 

          8,654

 

       101,164

 

        47,328

 

 

 Salaries and wages

 

        44,641

 

        40,191

 

       119,083

 

        54,899

 

 

 Consulting

 

                 -

 

                 -

 

                 -

 

        27,055

 

 

 Legal and professional fees

 

        12,261

 

          2,319

 

        29,799

 

          4,624

 

 

Other selling, general and administrative expenses

 

        38,603

 

        47,484

 

        72,885

 

       123,437

 

 Total Expenses

 

       123,196

 

       103,377

 

       330,610

 

       265,229

 

 

 

 

 

 

 

 

 

 

 

 

Net Income before other income and expenses

 

       (62,011)

 

     (105,086)

 

     (314,320)

 

     (278,164)

 

 

 

 

 

 

 

 

 

 

 

 

 Other Income and Expenses

 

 

 

 

 

 

 

 

 

 

 Interest income

 

                 -

 

                 -

 

          1,517

 

                 -

 

 

 Interest expense

 

         (2,743)

 

         (3,165)

 

         (7,791)

 

         (9,118)

 

 Total Other Income and Expenses

 

         (2,743)

 

         (3,165)

 

         (6,274)

 

         (9,118)

 

 

 

 

 

 

 

 

 

 

 

 

 Net Income

$

    (62,011)

$

  (108,251)

$

   (320,594)

$

   (287,282)

 

 

 

 

 

 

 

 

 

 

 

 

 Basic and dilutive earnings per share

$

        (0.00)

$

        (0.00)

$

        (0.00)

$

        (0.00)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

  87,539,883

 

  80,090,500

 

  82,573,627

 

  79,740,500




4






EXTREME GREEN TECHNOLOGIES INC.

 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

 For the period from  February 28, 2008 to March 31, 2011

 (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Additional

 

 

 

 

 

 Common Stock

 Paid-in

 

 Accumulated

 

 

 

 Shares

 

 Amount

 

 Capital

 

 Deficit

 

 Total

 Balances February 28, 2008 (incorporation)

                 -   

$

               -   

$

                    -   

$

                        -   

$

                  -   

 Common stock issued for cash

  70,000,000

 

        70,000

 

           (67,500)

 

                        -   

 

             2,500

 Common stock for services

    4,130,000

 

          4,130

 

                3,960

 

                        -   

 

             8,090

 Net. Loss for the period

                    -

 

                 -   

 

                      -   

 

               (55,100)

 

         (55,100)

 Balances, June 30, 2008

   74,130,000

 

         74,130

 

            (63,540)

 

               (55,100)

 

         (44,510)

 

 

 

 

 

 

 

 

 

 

 Common stock issued for cash

     5,260,500

 

           5,261

 

              32,314

 

                          -

 

           37,575

 Net loss for the year

                    -

 

                  -

 

                       -

 

               (26,506)

 

         (26,506)

 Balances, June 30, 2009

   79,390,500

 

        79,391

 

           (31,226)

 

              (81,606)

 

        (33,441)

 

 

 

 

 

 

 

 

 

 

 Common stock for services

        700,000

 

              700

 

                4,300

 

                          -

 

             5,000

 Restatement of equity per reorganization

-

 

-

 

          1,563,135

 

             (931,506)

 

         631,629

 Net loss for the year

-

 

-

 

-

 

             (188,618)

 

       (188,618)

 Balances, June 30, 2010

   80,090,500

 

       80,091

 

        1,536,209

 

         (1,201,730)

 

        414,570

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued pursuant to plan of reorganization

   16,550,150

 

         16,550

 

            (16,550)

 

                          -

 

                    -

 Adjustments per reorganization

                    -

 

                  -

 

            189,915

 

                          -

 

         189,915

 Shares issued in exchange

     4,658,000

 

           4,658

 

             (4,658)

 

                           -

 

                    -

 Sale of stock for cash  

     1,140,000

 

           1,140

 

              55,860

 

                          -

 

           57,000

 Net loss for the nine months

                    -

 

                  -

 

                       -

 

             (320,594)

 

       (320,594)

 

 

 

 

 

 

 

 

 

 

 Balances, March 31, 2011

 102,438,650

$

     102,439

$

        1,760,776

$

         (1,522,324)

$

        340,891




5






EXTREME GREEN TECHNOLOGIES INC.

 CONSOLIDATED STATEMENT OF CASH FLOWS

 For the nine months ended March 31, 2011 and 2010

 (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

2010

 

 

 Cash Flows from Operating Activities

 

 

 

 

 

 

 

 Net Income after taxes

$

     (320,594)

$

      (287,282)

 

 

 

 Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

 

 

 used by operations:

 

 

 

 

 

 

 

 

 

 Depreciation

 

        50,129

 

         74,013

 

 

 

  Change in operating assets and liabilities:  

 

 

 

 

 

 

 

 

 

 Accounts Receivable

 

       (34,100)

 

           6,403

 

 

 

 

 

 Accounts Payable and accrued expenses

 

        12,114

 

         31,954

 

 

 

 

 

 Credit Cards

 

       (46,495)

 

           6,442

 

 

 

 

 

 Inventory

 

        36,150

 

              170

 

 

 

 

 

 Deferred Rent

 

         (2,254)

 

            (692)

 

 

 

 

 

 Deferred Payroll

 

         (8,000)

 

           8,000

 

 

 

 

 

 Settlement Agreements

 

        95,684

 

 

 

 

 

 

 

 Subscriptions received

 

 

 

         50,000

 

 

 

 

 

 Net Cash provided by Operating Activities

 

     (217,366)

 

      (110,992)

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non Cash Investing and Financing Activities

 

 

 

 

 

 

 

 Amortization  of deferred  investments

 

       (60,000)

 

 

 

 

 

 Reorganization adjustments

 

       231,778

 

        (22,000)

 

 

 

 

Adjustments to reconcile net loss to net cash used by non cash investing and financing activities

 

       171,778

 

        (22,000)

 

 

 

 

 

 

 

 

 

 

 

 

 Cash Flows from Investing Activities

 

 

 

 

 

 

 

 Purchase/Retirement of Property and Equipment

 

       (11,525)

 

        (13,940)

 

 

 

 Repayment/reclassification of capital lease

 

       (15,291)

 

            (949)

 

 

 

 Sale of stock for cash

 

        57,000

 

 

 

 

 

 Proceeds of deferred  investments

 

        50,000

 

 

 

 

 

 

 Net Cash (used by) Investing Activities

 

        80,184

 

        (14,889)

 

 

 

 

 

 

 

 

 

 

 

 

 Cash Flows from Financing Activities

 

 

 

 

 

 

 

 Bank Line of Credit

 

       (49,965)

 

 

 

 

 

 Proceeds of note payable

 

 

 

         95,000

 

 

 

 Proceeds of stockholder loans

 

          8,000

 

         52,000

 

 

 

 

 

 Net Cash (used by) Financing Activities

 

       (41,965)

 

        147,000

 

 

 

 

 

 

 

 

 

 

 

 

 Net increase (decrease)  in cash

 

         (7,369)

 

         21,119

 

 

 Minority Interest

 

 

 

 

 

 

 Cash and cash equivalents, beginning of period

 

          8,785

 

           4,501

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents, end of period

$

        1,416

$

        25,620

 

 

 

 

 

 

 

 

 

 

 

 

 Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

 Income taxes paid

$

          800

$

            800

 

 

 

 

 Interest paid

$

               -

$

                -

 





6





Extreme Green Technologies Inc.

(F.K.A. Book Merge Technologies Inc.)

Notes to Consolidated Financial Statements

(Unaudited)

For the nine months ended

March 31, 2011


1.    Organization and Nature of Operations


Presentation


On October 11, 2010 the Company, as Book Merge Technology, Inc, (BMT), entered into a plan of reorganization with Extreme Green Technologies Inc. (EGT).  A reverse merger was effected , wherein BMT, (the shell), was the surviving company and legal acquirer whereas EGT was the operating company.  Accordingly, operations of the entity for the nine months ended March 31, 2011 are retroactively reported as those of EGT.  BMT has changed its name to Extreme Green Technologies, Inc.


Organization


The Company F.K.A. Book Merge Technology, Inc. (the legal acquirer) was incorporated February 28, 2008 In the State of Nevada as Big West Environmental, Inc.  The Company intended to enter into the sale and distribution of solar PV panels.  The Company has devoted substantially all its efforts to business planning and development since inception.  The Company has realized no revenue from it s planned business purpose. After evaluation of current opportunities, the Company entered into an agreement with EGT on October 11, 2010 to enter the bio fuel industry.  The Company changed its name to Extreme Green Technology Inc.


Extreme Green Technologies, Inc. (the operating company) was incorporated under the laws of the State of Nevada on December 23, 2003 for the purpose of developing, marketing and commercializing bio-diesel fuel, bio-diesel processors and related products.  In January 2008 the name was changed from Ryan Enterprises, Inc. to Extreme Green Technologies, Inc. (“EGT”). The Company has the relevant licenses for bio diesel production in California and is “doing business as” Extreme Biodiesel”.


Current Business of the Company


On January 1, 2008 the operating company Extreme Green Technologies Inc. (EGT), a private California corporation,  purchased an existing business, Extreme Biodiesel, which had, since 2004, been manufacturing home biodiesel processors.  In February, 2008 EGT moved to an 11,400 square foot building at 1560 Maple Street, Corona, California to set up a licensed bio diesel refinery and factory for refining diesel oil and manufacturing bio diesel processors.  A spike in fuel prices in 2008 created a demand for EGT’s processors that propelled processor sales in that year to $885,825.  The refinery at the outset was able to produce 2,000 gallons per day and is being expanded.


On October 11, 2010 the Company entered into a Plan of Reorganization with Extreme Green Technologies, Inc. (EGT), whereby Book Merge was to acquire a minimum of 51% controlling interest in EGT. The plan was for all EGT stockholders to swap their stock for BookMerge stock on a 2 for 1 basis, (2 EGT for 1 BookMerge), giving BookMerge control.  EGT would be wound up and operations conducted under BookMerge.  BookMerge would assume the name Extreme Green Technologies.  The effect is a reverse merger, wherein BookMerge, (the shell), is the surviving company and legal acquirer whereas EGT, (the operating company), is the accounting acquirer.  Operations of the entity are reported as those of EGT.


On October 11, 2010 BookMerge had achieved a 51% interest in EGT, gaining control.  The reverse acquisition was effected on that date. The reorganization continued with stock swaps and was completed by March 31, 2011.  EGT became a subsidiary of BookMerge. BookMerge has changed its name to Extreme Green Technologies, Inc.




7






2.    Summary of Significant Accounting Policies


Unaudited Interim Financial Statements


The accompanying unaudited financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities Exchange commission (the “SEC”) as applicable to smaller reporting companies, and generally accepted accounting principles for interim accounting reporting.   The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods.  Certain information  and footnote disclosures normally presented in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to such rules and regulations.  These unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10K. The results of the nine month period ended March 31, 2011 are not necessarily indicative of the results to be expected for the full year ending June 30, 2011.


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 certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period.  Actual results could differ materially from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation.


Revenue Recognition


Revenue is recognized for diesel fuel sales at the plant per typical point-of-sale systems, i.e. when the customer takes delivery and payment is received.  The price of diesel fuel is updated daily. Revenue is recognized for mini refineries and services when the terms of the customer order, including price and method of payment, has been approved by both parties and delivery has been made or services rendered.


The Company has been an ongoing concern since January 1, 2008 and has ongoing sales since inception to the present.  The Company generated revenue of $78,698 in the nine months ended March 31, 2011 ($45,382 in 2010).


Cash and equivalents


Cash and equivalents include investments with initial maturities of three months or less.


Fair Value of Financial Instruments


The Financial Accounting Standards Board issued   ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. FASB ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.  FASB ASC 820-10 defines fair value as the price  that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:


-

Level 1:  Quoted prices in active markets for identical assets or liabilities


-

Level 2:  Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;  quoted prices 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 related 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.




8






The Company has classified its assets and liabilities into these levels depending upon the data relied upon to determine the fair values.  The following fair value hierarchy table represents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2010:



 

 

 

Quoted Prices

 

Significant

 

 

 

 

 

 

 

in Active

 

Other

 

Significant

 

 

 

 

 

Markets for

 

Observable

 

Unobservable

 

Balance as of

 

 

 

Identical Assets

 

Inputs

 

Inputs

 

March 31,

 

 

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

2011

Assets

 

 

 

 

 

 

 

 

 


 Note Receivable

$


40,000

$


-

$


-

$


40,000

 

 Deposits

 

18,036

 

-

 

-

 

18,036

 

 

$

58,036

$

-

$

-

$

58,036

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank  Line of Credit

 

78,212

 

-

 

-

 

78,212

 

Notes Payable

 

-

 

95,000

 

-

 

95,000

 

Deferred Investments

 

-

 

54,000

 

-

 

54,000

 

Stockholder Loans

 

-

 

52,000

 

-

 

52,000

 

 

$

78,212

$

201,000

$

-

$

279,212


Income Taxes


The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.


The Company generated a deferred tax credit through net operating loss carryforward.  However, a valuation allowance of 100% has been established


Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.


Stock-based compensation


(FASB) ASC Topic 718, Stock Compensation (formerly FASB Statement 123R) requires generally that all equity awards granted to employees be accounted  for at grant-date “fair value”.  Fair value is equal to the underlying value of the stock for “full value” awards such as restricted stock and performance shares, and estimated using an option pricing model with traditional inputs for “appreciation” awards such as stock options and stock appreciation rights.  There are special provisions for nonpublic companies that are intended to ease compliance with accounting for stock compensation.


Recent Accounting Pronouncements


In January 2010, the FASB issued ASU No. 2010-01, amending SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. This Standard codified in ASC 105 is being modified to include the authoritative and non-authoritative levels of GAAP. This amendment is effective for financial statements issued for interim and annual periods ending after September 15, 2009. ASU No. 2010-01 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.


In January 2010, the FASB issued ASU No. 2010-08, “Technical Corrections to various Topics.” This Standard is being updated to eliminate outdated or inconsistent GAAP standards and to clarify the Boards original intent mainly with regards to derivatives and hedging. This is effective for the first reporting period (including interim periods) beginning after issuance. ASU No. 2010-08 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.



9






In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” related to ASC Topic 820-10.  This update requires new disclosures to; transfers in or out of Levels 1 and 2, activity in Level 3fair value measurements, Level of disaggregation, and disclosures about inputs and valuation techniques. This amendment will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. ASU No. 2010-06 has no impact on the Company’s results of operations, financial condition or cash flows.


In January, 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. The standard amends ASC Topic 820, Fair Value Measurements and Disclosures to require additional disclosures related to transfers between levels in the hierarchy of fair value measurement. The standard does not change how fair values are measured. The standard is effective for interim and annual reporting periods beginning after December 15, 2009. As a result, it is effective for the Company in the first quarter of fiscal year 2010. The Company does not believe that the adoption of ASU 2010-06 will have a material impact on its financial statements.


In February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events (ASC Topic 855), Amendments to Certain Recognition and Disclosure Requirements.” This Standard update requires a SEC Filer to (1) evaluate subsequent events through the date that the financial statements are issued or available to be issued, (2) defines “SEC Filer” as an entity that is required to file or furnish its financial statements with either the SEC or, with respect to an entity subject to Section 12(i) of the Securities Exchange Act of 1934, as amended, the appropriate agency under that Section, (3) not be bound to disclosing the date through which subsequent events have been evaluated, (4) note the definition of public entity is not longer defined nor necessary for Topic 855, (5) note the scope of the reissuance disclosure requirements is refined to include revised financial statements only. These Updates are effective for interim or annual periods ending after June 15, 2010. ASU No. 2010-09 has no effect on the Company’s financial position, statement of operations, or cash flows at this time.   


Going Concern


The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.  The company experienced a loss of ($287,339) in the nine months ended March 31, 2011,  (loss of $287,282 in 2010). The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plans to generate bio-diesel revenue from an expanded refinery.  The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern.


Development-Stage Company


The Company was considered a development-stage company until January 1, 2008 when the        company,  purchased an existing business, Extreme Biodiesel, which had, since 2004, been manufacturing home biodiesel processors. The Company has had consistent production and sales since.


Basic and Diluted Net Loss Per Share


Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented.  Basic net loss per share is based upon the weighted average number of common shares outstanding.  Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised.  Dilution is computed by applying the treasury stock method.  Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.


The Company has potentially dilutive securities outstanding as of March 31, 2011 in the form of convertible debt.  However the conversion would be anti dilutive, since the Company is in a loss position, and was therefore not considered in the calculation of earnings per share.



10






The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the six months ended March 31, 2011 and 2010, respectively.  


Numerator:

 

 

 

 

 

 

2010

 

2009

Basic and diluted net loss per share:

 

 

 

 

Net Loss

$

(287,339)

$

(287,282)

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average

 

 

 

 

number of shares outstanding

 

82,573,627

 

79,740,500

 

 

 

 

 

Basic and Diluted Net Loss Per Share

$

(0.00)

$

(0.00)



Notes Receivable,

 

 

 

 

 

 

March 31,2010

 

June 30,2009

 

 

 

 

 

 

 

 

 

 

$40,000

 

$40,000


An advance of $40,000 on March 18, 2009 to Superior Service Recycling was made in a preliminary agreement to purchase Superior’s business.  This business provides EGT with used vegetable oil for bio-diesel production.  It is owned by Scott Brown, a stockholder and Technical Director of EGT. The Board of Directors has stated the intention of completing the transaction. The advance carries no interest or terms of repayment.


Property, Plant and Equipment

 

 

 

 

 

 

March 31,

 

June 30,

 

 

2011

 

2010

 

 

 

 

 

Refinery

$

857,025

$

857,025

Leasehold Improvements

 

31,885

 

31,885

Vehicles

 

52,936

 

40,936

Furniture and fixtures

 

3,422

 

3,422

 

 

945,268

 

933,268

Accumulated depreciation

 

(227,531)

 

(151,937)

 

 

 

 

 

 

$

717,737

$

781,331


Property plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method with useful lives used in computing depreciation ranging from 6 to 10 years. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Expenditures for maintenance and repairs are charged to operations as incurred; additions, renewals and betterments are capitalized.

 

Bank Line of Credit

 

 

 

 

 

 

March  31,

 

June 30,

 

 

2011

 

2010

 

 

 

 

 

 

$

78,212

$

49,965




11






The line of credit is funded by Bank of the West, carries interest at 4.75% and is payable upon demand. The rate is variable based on Bank of the West prime rate.


Obligation Under Capital Lease

 

 

 

 

 

 

March 31,

 

June 30,

 

 

2011

 

2010

 

 

 

 

 

 

$

0

$

9,291


On February 28, 2008 Wells Fargo Bank funded a three year lease for a forklift with bargain purchase clause, which was capitalized to $23,380.  Monthly payments of $631.39 were required.  The implicit interest rate was 12.88%.


Notes Payable

 

 

 

 

 

 

March 31,

 

June 30,

 

 

2010

 

2009

 

 

 

 

 

 

$

95,000

$

95,000


On November 11, 2009 EGT entered into a stock purchase agreement with Envirotek Inc., a Nevada holding company, which holds stock of entities engaged in alternative fuel production such as bio-diesel.  Under the agreement, Envirotek was to acquire 51% of EGT stock, and to loan EGT $250,000 in stages. In November 2009 Envirotek advanced EGT $65,000 and a further 30,000 from January 28 to March 3rd 2010 under promissory notes.  The $65,000 note carries no interest,  requires no payments  and matures January 20, 2013.  On April 26, 2010 The Board of Directors rescinded the agreement with Envirotek Inc. This effectively ended the business relationship between the two companies. Envirotek subsequently ceased operations. The advances were classified as a non current liability pending renewed communication with Envirotek.


Deferred Investments

 

 

 

 

 

 

March 31,

 

June 30,

 

 

2011

 

2010

 

 

 

 

 

 

$

54,000

$

114,000


On February 25, 2010 the Company signed an investment agreement with two individuals  Steve Hayden III and Steve Hayden IV, wherein they deposited $ 107,000 into the Company in return for 25% of Net Profit over 24 months beginning June 30, 2010.  Net Profit was defined as fuel sales less oil, delivery and processing costs, and taxes.  The minimum return, royalty, was specified as $200,000.  No royalty payments were payable under the agreement in 2010.  The investment was amortized pro rata in 2011.  


Stockholder Loans

 

 

 

 

 

 

March 31,

 

June 30,

 

 

2011

 

2010

 

 

 

 

 

Robert Neuberger

$

50,000

$

50,000

Joseph Spadafore

 

4,000

 

2,000

Barankovitch

 

6,000

 

0

 

$

60,000

$

52,000


Stockholder loans carry no interest, have no terms of repayment, and are non callable.


Repayment is discretionary.  Both lenders are officers of the Company.




12






4.    Provision for Income Tax


No provision was made for federal income tax for the year ended December 31, 2010 and 2010, since the Company had significant net operating loss. The provision for income taxes consists of the state minimum tax imposed on corporations.


The net operating loss carryforward for federal and state income tax purposes as of December 31, 2010 is approximately $ 1,500,000 The net operating losses will expire in 2028 through 2031 unless utilized beforehand.


The availability of the Company’s net operating loss carryforwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock.


The Company has recorded a 100% valuation allowance for the deferred tax asset since it is “more-likely- than-not” that the deferred tax assets will not be realized.


The components of the net deferred tax asset are summarized below:


 

 

December31,

 

  

 

2010

 

 

2009

 

Tax expense (credit) at statutory rate-federal

 

 

-34

%

 

 

-34

%

State tax expense net of federal tax

 

 

-6

%

 

 

-6

%

Changes in valuation allowance

 

 

40

%

 

 

40

%

Tax expense at actual rate

 

 

-

 

 

 

-

 


  

 

December 31, 2010

 

 

December 31, 2009

 

Deferred tax asset – net operating loss

600,000

 

 

 

$

405,000

 

Less valuation allowance

 

 (600,000)

 

 

 

 

(405,000

)

  

 

 

 

 

 

 

 

 

      Net deferred tax asset

       0

 

 

 

$

0

 


3.    Capital Structure


In February 2010, 4,658,000 shares were issued in exchange for stock of the subsidiary, “old” Extreme Green Technologies Inc. (EGT) on a 2 for 1 basis:  2 shares of “old” EGT for 1 share of the Company.


In February, 2010, the Company sold 1,140,000 restricted shares for cash to three investors at 5 cents per share,  realizing $57,000.


As at March 31, 2011 the Company was authorized to issue 200,000 common shares, of which   102,438,650 were issued and outstanding.


4.    Commitments and Contingencies


The Company entered into a three year lease for an office and manufacturing building in Corona, California on February 15, 2008 at the rate of $8,050 per month.  Renewal of the lease is under negotiation as at March 31, 2011.


5.   Legal Proceedings


There were no legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation or is involved either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors


6.    Subsequent Events

 

  Events subsequent to March 31, 2011 have been evaluated through April 12, 2011, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading. Management found no subsequent events to be    disclosed.



13






ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD-LOOKING STATEMENTS


This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); finding suitable merger or acquisition candidates; expansion and growth of the Company's business and operations; and other such matters are forward-looking statements.  These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.


These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this Filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.


Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.


GENERAL DESCRIPTION OF BUSINESS


Extreme Green Technologies, Inc. operation is to develop, market and commercialize bulk bio-diesel fuel, home bio-diesel processors and increase capacity of the related waste vegetable oil and brown grease inceptor/grease trap cleaning and collection areas of EGT. EGT's mission is to create awareness and provide a cost-effective, high-quality alternative diesel fuel, create "green" jobs, reduce the environmental impact of fossil fuels and diminish US reliance on foreign oil.


With the closing of the acquisition BookMerge plans to secure sufficient capital to fund the operation of Extreme Biodiesel. Extreme Green Technologies, Inc. dba Extreme Biodiesel (EGT) was formed on October 19, 2007 as a Nevada corporation qualified to do business in California. EGT was formed to develop market and commercialize bulk bio-diesel fuel, personal biodiesel processors and related products.


EGT’s mission is to satisfy the biodiesel demand and eliminate US reliance on foreign oil, reduce the environmental impact of fossil fuels, avoid petroleum price volatility, create “green” jobs, reduce transportation costs for goods, and help create a self-sustaining fuel system in the USA.


EGT currently has an existing fully licensed and permitted bio-diesel production facility in Corona, CA capable of producing up to 4,000 gallons and is plant is expandable to 20,000 gallons per day of bio-diesel fuel from virgin and waste vegetable oil. EGT has completed IRS Fuel Tax registration requirements for fuel tax credits and rebates, obtained the difficult State of California Developmental Fuel Variance License, State of California Board of Equalization excise tax registration, State of California Department of Food and Agriculture Rendering and Transportation licenses along with city permitting and licensing for the large refinery and home processor sales. Final EPA RFS II registration for ASTM Certification is pending. The company currently employs five employees and two independent contractors.




14






MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS


The Company has a limited operating history upon which an evaluation of the Company, its current business and its prospects can be based. The Company's prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. Such risks include inadequate funding the company's inability to anticipate and adapt to a developing market, the failure of the company's infrastructure, changes in laws that adversely affect the company's business, the ability of the Company to manage its operations, including the amount and timing of capital expenditures and other costs relating to the expansion of the company's operations, the introduction and development of different or more extensive communities by direct and indirect competitors of the Company, including those with greater financial, technical and marketing resources, the inability of the Company to attract, retain and motivate qualified personnel and general economic conditions.


The Company expects that its operating expenses will increase significantly, especially as it implements its business plan. To the extent that increases in its operating expenses precede or are not followed by commensurate increases in revenues, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition would be materially and adversely affected. There can be no assurances that the Company can achieve or sustain profitability or that the Company's operating losses will not increase in the future.


RESULTS OF OPERATIONS


The Company has achieved no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future. The Company incurred a net loss of approximately $560,297 for the three months ended Mar. 31, 2011, compared with a net loss of $108,251 for the three months ended March 31, 2010.


LIQUIDITY AND CAPITAL RESOURCES


Since its inception the Company has had limited operating capital, and has relied heavily on debt and equity financing.


The financial statements as of and for the period ended on June 30, 2010 expressed their substantial doubt as to the Company's ability to continue as a going concern. Without additional capital, it is unlikely that the Company can continue as a going concern. The Company plans to raise operating capital via debt and equity offerings. However, there are no assurances that such offerings will be successful or sufficient to fund the operations of the Company. In the event the offerings are insufficient, the Company has not formulated a plan to continue as a going concern. Moreover, if such offerings are successful, they may result in substantial dilution to the existing shareholders.


CRITICAL ACCOUNTING POLICIES


In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, our most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period and the valuation of shares and underlying mineral rights acquired with shares. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our financial statements.





15






ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


The Company is not exposed to market risk related to interest rates or foreign currencies.


CONTROLS AND PROCEDURES


ITEM 4.  CONTROLS AND PROCEDURES


EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES


We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.


As of March 31, 2011 we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer and our chief financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President and Chief Financial Officer concluded that our disclosure controls and procedures were effective in providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this Quarterly Report.


CHANGES IN INTERNAL CONTROLS.


There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.





16





PART II OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


The Company is not a party to any legal proceedings.


ITEM 1A. RISK FACTORS


There are no material changes in the risk factors set forth in the Company’s Form 8K filed Jan. 26, 2011.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


In February 2011, 4,658,000 shares were issued in exchange for stock of the subsidiary, “old” Extreme Green Technologies Inc. (EGT) on a 2 for 1 basis:  2 shares of “old” EGT for 1 share of the Company.


In February  2011, the Company sold 1,140,000 restricted shares for cash to three investors at 5 cents per share, realizing $57,000.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES


None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


None.


ITEM 5. OTHER INFORMATION


None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


The following documents are included or incorporated by reference as exhibits to this report:


Exhibit Number


Description

31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

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

32.1

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


(b)   REPORTS ON FORM 8-K


None.

SIGNATURES


In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 12, 2011


 

BookMerge Technologies, Inc.

 

Registrant

 

 

 

By: /s/ Richard Carter        

 

Richard Carter

Chairman of the Board

Chief Executive Officer




17