UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD FROM _____________ TO _____________

 

Commission File Number 333-146405

 

———————

GENERATION ZERO GROUP, INC.

(Exact name of registrant as specified in its charter)

———————

NEVADA	20-5465816
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

13663 PROVIDENCE ROAD, SUITE #253

WEDDINGTON, NC 28104

 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(470) 809-0707

(REGISTRANT'S TELEPHONE NUMBER)

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  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 (§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  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, 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  ¨	Accelerated filer   ¨
Non-accelerated filer  ¨	Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   ¨ No   x

As of November 19, 2013, the issuer had 44,364,785 shares of common stock, $0.001 par value per share issued and outstanding. This does not include 1,460,125 shares which the issuer has agreed to issue (as described below), which have not been physically issued as of the date of this filing and have not been included in the number of issued and outstanding shares disclosed throughout this report.

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TABLE OF CONTENTS

  

		Page
	PART I
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations (unaudited)	4
	Consolidated Statements of Cash Flows (unaudited)	5
	Notes to Consolidated Financial Statements  (unaudited)	6
Item 2.	Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	12
Item 3.	Quantitative And Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
	PART II
Item 1.	Legal Proceedings	25
Item 1A:	Risk Factors	25
Item 2.	Unregistered Sales Of Equity Securities And Use Of Proceeds	25
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	26

 

 

 

 

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

GENERATION ZERO GROUP, INC.

(FORMERLY VELOCITY OIL & GAS, INC.)

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

	(Unaudited)		(AUDITED)
	September 30,		December 31,
	2013		2012
ASSETS
CURRENT ASSETS
Cash	$                    3,089		$              73,714
Receivables	$                            -		$                        -
Prepaid expenses	$                            -		$                        -
Total current assets	$                    3,089		$              73,714
Property, plant and equipment, net of accumulated depreciation
Intangible assets, net of amortization	$             3,290,000		$         3,500,000
Total assets	$             3,293,089		$         3,573,714
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$                  11,690		$              30,145
Accrued liabilities	$                122,644		$              86,649
Current Notes Payable	$             3,325,250		$                       -
Short-term debt - related party	$                  44,068		$              30,168
Total current liabilities	$             3,503,652		$            146,962
Notes payable, net of unamortized discount	$                225,000		$         3,515,250
Total liabilities	$             3,728,652		$         3,662,212
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value; 10,000,000 shares authorized:
Series A Preferred stock, $0.001 par value; 1,000 shares	$                           1		$                       1
designated; 1,000 shares issued and outstanding
Series B Preferred stock, $0.001 par value; 2,000,000 shares	$                            -		$                        -
designated; 0 shares issued and outstanding
Common stock, $0.001 par value; 100,000,000 shares	$                  44,365		$              32,415
authorized; 44,364,785 and 32,414,785 issued and outstanding
Additional paid-in capital	$             6,632,595		$         6,603,045
Deficit accumulated during the development stage	$           (7,112,524)		$      (6,723,959)
Total stockholders' equity (deficit)	$              (435,563)		$           (88,498)
Total liabilities and stockholders' equity (deficit)	$             3,293,089		$         3,573,714
See notes to consolidated financial statements.

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GENERATION ZERO GROUP, INC.

(FORMERLY VELOCITY OIL & GAS, INC.)

 (A Development Stage Company)

CONSOLIDATED STATEMENTS OF EXPENSES

See notes to consolidated financial statements.

4

GENERATION ZERO GROUP, INC.

(FORMERLY VELOCITY OIL & GAS, INC.)

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

See notes to consolidated financial statements.

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GENERATION ZERO GROUP, INC.

(FORMERLY VELOCITY OIL & GAS, INC.)

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business. Generation Zero Group, Inc. (“Generation Zero” or the “Company”) was incorporated in the State of Nevada on May 16, 2006. From inception, until the acquisition of Find.com (as described below), the Company operated as a start-up entity pursuing opportunities in oil and gas exploration and development with a geographic focus in Texas and Louisiana.

With the acquisition of Find.com, the Company has made a concerted effort to focus on growing Find.com into a profitable business and other new opportunities and businesses that will attempt to increase the value of the Company’s common stock.

Basis of Presentation. The consolidated financial statements of Generation Zero have been prepared by Generation Zero, pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles.

Use of Estimates. In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and expenses in the statement of expenses. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on its results of operations, financial condition or cash flow.

NOTE 2 – GOING CONCERN

As shown in the accompanying financial statements, Generation Zero incurred a net loss of ($140,193) for the quarter ended September 30, 2013, and had an accumulated deficit of ($7,112,524) as of September 30, 2013. These conditions raise substantial doubt as to Generation Zero’s ability to continue as a going concern. The Company is trying to raise additional capital. The financial statements do not include any adjustments that might be necessary if Generation Zero is unable to continue as a going concern.

NOTE 3 - INTANGIBLE ASSETS

The intangible assets all relate to the URL www.Find.com and the related underlying technology driving the website at the time of acquisition. These intangibles are deemed to be amortized over a fifteen year period.

www.Find.com Technology

During April 2010, Generation Zero entered into an Asset Purchase Agreement with Find.com Acquisition, Inc. to acquire all of Find.com Acquisition’s interest in and ownership of the technology assets that powered the operations of the www.Find.com website and all associated intellectual property rights necessary to enable Generation Zero to register the technology and intellectual property in Generation Zero’s name.  The purchase also included all service contracts related to the operations of the technology that at the time of acquisition related to the operation of www.Find.com, and other related domain names. The purchase did not include any liabilities of Find.com Acquisition or the Find.com URL. The asset was valued at $1,300,000 based upon a fair market valuation report prepared by a third party valuation specialist. The Company issued 10,000,000 shares of restricted common stock as purchase consideration.

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Since the acquisition of the technology assets, the Company has been pursuing an alternative strategy for the Find.com URL. This strategy will use only certain aspects of the acquired technology assets going forward.  Generation Zero is uncertain whether it will be able to utilize the full functionality of the technology assets on future initiatives unrelated to Find.com, and accordingly has recorded an impairment charge of ($1,100,000) based on the current status of Find.com and the fact that the timing of any future initiatives is unknown and uncertain. The technology assets, after the impairment charge, are valued at $200,000.

www.Find.com URL (“URL”)

On June 30, 2010 Generation Zero entered into a Share Exchange Agreement with various members of Find.com URL Holding LLC, a Georgia limited liability company. Find.com URL Holding LLC owned 100% of the URL known as www.find.com.  The purchase consideration included 14,988,567 shares of restricted common stock and secured notes. The URL was valued at $4,000,000 based upon a fair market valuation report prepared by a third party valuation specialist. The Company allocated this value to the consideration issued based on the relative fair value of the debt assumed and equity issued related to this purchase.  Fair value of the debt was based upon the face value of the instrument while the fair value of the common stock was based on the quoted market price of the stock on June 30, 2010. The secured notes were deeply discounted at the time of the transaction, with the discount amortized over the original term of the notes.  

NOTE 4 – MANAGEMENT REORGANIZATION

On May 13, 2013, the Company’s then sole director and officer, Matthew Krieg, resigned and exchanged 1,000 shares of the Company’s Series A Preferred Stock which he held for 3,000,000 shares of the Company’s restricted common stock.  On that same date, Cynthia S. White was issued 1,000 new shares of the Company’s Series A Preferred Stock (which transaction represented a change of control), was appointed as a director of and as Chief Executive Officer and President of the Company (provided that Ms. White has since resigned as Chief Executive Officer and President), and was issued 2,000,000 shares of our restricted common stock in consideration for Ms. White agreeing to serve as a director of and as President of the Company and in consideration for services previously rendered to the Company.  On that same date, Mr. Krieg authorized and issued 2,000,000 shares of our restricted common stock to the estate of Ronald Attkisson for services previously rendered to the Company by Mr. Attkisson who passed away in May 2013 and appointed Christine B. Cheney as the Secretary/Treasurer and Chief Financial Officer of the Company. On May 15, 2013, Ms. Cheney was issued 2,000,000 shares of our restricted common stock in consideration for services previously rendered to the Company and in consideration for agreeing to be appointed as Chief Financial Officer of the Company.  On that same date, Brian Waldo was appointed as the Chief Information Officer of the Company and was issued 1,300,000 shares of our restricted common stock in consideration for services rendered to the Company in connection with the development of the Company’s upgraded and redesigned website for Find.com and for agreeing to be appointed as the Company’s Chief Information Officer.

Effective on July 22, 2013, Cynthia S. White resigned as President and Chief Executive Officer of the Company and the Board of Directors appointed Richard M. Morrell as the Chief Executive Officer, President and as a director of the Company to fill the vacancy created by her resignation.  The Board of Directors approved the issuance of 1,000,000 shares of the Company’s restricted common stock to Mr. Morrell in consideration for agreeing to serve as an officer and director of the Company.

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NOTE 5 – CONTESTED LEGAL CLAIMS

On February 12, 2013, Geronimo Property Trust (“Geronimo”) filed a lawsuit against the Company, MedicalWork, LLC (our former wholly-owned subsidiary, “MedicalWork”) and StaffMD, Inc. (“StaffMD”, an entity owned by Jeffrey Sisk) in the Superior Court of Fulton County, Georgia (File No. 2013CV227180), alleging breach of contract by the Company and MedicalWork, due to the Company’s and MedicalWork’s alleged failure to repay a $250,000 secured note entered into by MedicalWork and the Company (the “Geronimo Note”) in connection with the Company’s February 2011 acquisition of StaffMD from Mr. Sisk to merge into MedicalWork (which entity was later bought back by Mr. Sisk); unjust enrichment against MedicalWork and StaffMD; fraud against the Company due to alleged breaches of representations made by the Company; and seeking recovery of damages and attorneys’ fees.  The suit also seeks to enjoin us from selling find.com.  The suit claims that Geronimo never agreed to extend the due date of the Geronimo Note from February 1, 2012 to February 1, 2013.  Geronimo also alleges that it sent the Company a default notice relating to the Geronimo Note on February 9, 2012, provided that the Company never received such notice.  The Company subsequently filed an answer to the lawsuit, denying Geronimo’s claims, disputing substantially all of Geronimo’s allegations as untrue, and asserting counterclaims against Geronimo. The asserted counterclaims against Geronimo have been dropped voluntarily by the Company. The Geronimo Note has a security interest only in the MedicalWork assets, which are no longer owned by the Company. Jeffrey Sisk has agreed to indemnify the Company from all costs and damages associated from any claims or judgment associated with the Geronimo Note. At this very early stage of the litigation the outcome cannot be predicted with any degree of reasonable certainty, however the Company intends to vigorously defend itself against Geronimo’s claims. Most recently, Geronimo has dropped their claim of fraud and their efforts to seek to enjoin the Company from selling or licensing the find.com URL.

NOTE 6 – RELATED PARTY TRANSACTIONS

Generation Zero has borrowed from shareholders and directors periodically in the past. The borrowings are non-interest bearing and due on demand with either ninety days or twelve months and one day’s notice. Cynthia S. White, our former Chief Executive Officer and current director, has loaned the Company $15,000, of which $10,000 was converted into a Bridge Note in September 2013 as disclosed in Note 7 below.

Richard M. Morrell, our Chief Executive Officer and director, has loaned the Company $63,068 as of September 30, 2013, $25,000 of which was evidenced by a Convertible Promissory Note issued July11, 2013, bearing interest at the rate of 10% per annum with a maturity date of July 10, 2015.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.

At September 30, 2013 and December 31, 2012, there was an outstanding balance of $44,068 and $30,168, respectively, due to the shareholders and directors as short-term related party debt.

NOTE 7 – THIRD PARTY TRANSACTIONS

The Company owed Scientigo, Inc. $155,000 as part of the Find.com URL transaction referenced in Note 3 above.   A balance of $55,000 is in default.  Forbearance has been granted until January 1, 2014.

On June 30, 2010 the Company issued secured notes to acquire the Find.com URL as referenced in Note 3 above, in the amount of $3,070,000 bearing interest at the rate of 12% and having a maturity date of December 31, 2011.   The Company did not make the required payments under the secured Find.com notes to the holders thereof when due. The Collateral Agent for the Notes has declared the Notes in default. The Company originally negotiated a Forbearance Agreement with the Note Holders to affect forbearance for four months through March 15, 2011. That forbearance has been extended through January 1, 2014 per the amendment discussed below.

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The Forbearance Agreement required that Matthew Krieg, the Company’s then sole officer and director (provided that Mr. Krieg resigned as an officer and director of the Company in May 2013) and prior holder of the Company’s Series A Preferred Stock (which provided Mr. Krieg super-majority voting rights), enter into an agreement to cancel the shares of Series A Preferred Stock which he held in exchange for an aggregate of 3,000,000 shares of common stock upon the payment in full of the Notes, among other things, which terms have since been amended by the March 2012 Forbearance Agreement, which transaction was completed in May 2013, as discussed in greater detail in Note 4 below.

Generation Zero was not able to meet the terms of the Forbearance Agreement with the secured note holders.  In March 2012, the secured note holders, with over majority approval, authorized the Collateral Agent to forbear in the exercise of its rights and remedies under the Secured Notes, Security Agreements, Operating Agreement, Forbearance Agreement and applicable law during a Forbearance Period commencing on June 30, 2010 and ending on the earlier to occur of January 2, 2014 or the date that any Forbearance Default (as defined in the Forbearance Agreement) occurs (the “Forbearance Period”).  The Secured Notes have been renegotiated to represent a face value of $2,920,250 and interest shall not accrue or be assessed during the Forbearance Period.  As a forbearance fee, Generation Zero agreed to issue 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Notes held by each holder, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing. The authorized amendment to the Forbearance Agreement also provided for the restructure of Generation Zero Group, Inc., the transfer of control from Mr. Krieg and the replacement of current management, which transfer of control and replacement of management has occurred to date as described in greater detail in Note 4.  A Forbearance extension has been granted until January 1, 2014.

On November 4, 2010, a third party loaned the Company $150,000, which was evidenced by a promissory note in the amount of $250,000 bearing interest at the rate of 12% per annum with a maturity date of November 4, 2011. The amount of the note represented receipt of $150,000 cash and the assignment of $100,000 debt owed to the Company’s then sole officer and director.  The Company issued 750,000 shares of restricted common stock in connection with this third party note. Forbearance has been extended on the note until June 2, 2014.

On November 4, 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, bearing interest at the rate of 12% per annum with a maturity date of November 4, 2011. The Company issued the third party an aggregate of 300,000 shares of common stock in connection with this third party note. Forbearance has been extended on the note until June 2, 2014.

In March 2012, four of the Secured Note Holders participated in a non-interest bearing bridge loan for $40,000.  The Company issued 400,000 shares of restricted common stock in consideration of this funding.   In September 2013, Cynthia S. White, one of our directors and a Secured Note Holder converted $10,000 short-term debt disclosed in Note 6 to a $10,000 bridge loan.  The Company issued Ms. White 100,000 shares of restricted common stock in connection with the loan..  

On August 15, 2012, a third party loaned the Company $200,000 for working capital which was evidenced by a Convertible Promissory Note, bearing interest at the rate of 10% per annum with a maturity date of August 15, 2014.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.

As disclosed in Note 6, on July 11, 2013 Richard M. Morrell loaned the Company $25,000 for working capital which was evidenced by a Convertible Promissory Note, bearing interest at the rate of 10% per annum with a maturity date of July 10, 2015.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.

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NOTE 8 – COMMON STOCK

As disclosed in Note 3, Generation Zero issued an aggregate of 24,988,567 shares of common stock to acquire the URL www.find.com and related technology.

As disclosed in Note 4, Generation Zero issued an aggregate of 11,300,000 shares of restricted common stock in conjunction with the restructure of the management team and for past services rendered to the Company.

As disclosed in Note 7, Generation Zero issued an additional 1,050,000 shares of restricted common stock in conjunction with the issuance of Third Party Notes during November 2010.

As disclosed in Note 7, Generation Zero agreed to issue 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Secured Notes held by each holder, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing.

As disclosed in Note 7, Generation Zero issued the participating Note Holders 500,000 shares of restricted common stock..

The Company was notified of the prior management’s commitment to issue 150,000 shares of restricted common stock in conjunction with the extension of a Third Party Note during November 2011.  After receiving supporting documentation, the Company has issued 150,000 shares of restricted common stock to honor prior management commitments.

NOTE 9 – PREFERRED STOCK

Series A Preferred Stock

Generation Zero has authorized 1,000 shares of Series A Preferred Stock which has a par value of $0.001 per share. Each share has no dividend rights, no liquidation preference, and no conversion or redemption rights. The shares of Series A Preferred Stock have the right, voting in aggregate, to vote on all shareholder matters equal to fifty-one percent (51%) of the total vote. As of September 30, 2013, there were 1,000 shares of Series A preferred stock issued and outstanding.

Series B Preferred Stock

Generation Zero has authorized 2,000,000 shares of Series B Preferred Stock which has a par value of $0.001 per share. Each share has no dividend rights, no liquidation preference, no voting rights, and no conversion or redemption rights. As of September 30, 2013, there were no shares of Series B preferred stock issued and outstanding.

NOTE 10 – SUBSEQUENT EVENTS

On September 30, 2013, the Company agreed to provide an inter-company loan of up to $250,000 to the Company’s newly formed wholly-owned subsidiary, Find.com, Inc., a Nevada corporation (“Find.com Nevada”).  As of the date of this filing a total of $20,250 has been advanced.  All advanced amounts bear interest at the rate of 3% per annum and are due and payable six months from the date of each such advance.  Advances will be used for operation and business development costs related to the Find.com e-commerce business.   Effective on August 1, 2013, the Company’s wholly-owned subsidiary, Find.com URL Holding, provided a one year (automatically renewable unless notice of termination is provided by either party) license to Find.com Nevada to use the Find.com URL.  Pursuant to the terms of the license, Find.com Nevada is required to pay 25% of the cash flow in excess of $1 million directly to the Company, which will be used to repay the Secured Notes.  The remainder of the funds generated by the Find.com URL is anticipated to be retained by Find.com Nevada for operations and business development.

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In October 2013, Find.com Nevada entered into an agreement with a third party, pursuant to which it appointed the third party as its agent for the purpose of selling pay-per-click advertising through the find.com website. The agreement has an initial term of six months, automatically extendable thereafter for one year periods, unless either party provides sixty days written notice to the other prior to the beginning of the next extension term.  The agreement is also terminable by either party with 30 days written notice upon a material breach of the agreement by the other party.  Pursuant to the agreement the third party receives 90% of the revenues and Find.com Nevada receives 10% of the revenues generated by the agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements". These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.  References in this Form 10-Q, unless another date is stated, are to September 30, 2013.

You should read the matters described in “Risk Factors” below and disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on April 25, 2013, and the other cautionary statements made in this Report as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

 

Corporate History

Generation Zero Group, Inc. (“we,” the “Company,” and “us”) was formed as a Nevada corporation on May 16, 2006 under the name Velocity Oil & Gas, Inc.  The Company originally operated as a start-up entity with the intention of being involved in oil and gas exploration and development with a geographic focus in Texas and Louisiana.  We have since changed our business focus to Internet, technology and entertainment related businesses, and have closed on an acquisition of certain technologies and other proprietary information described below.

On or around November 10, 2009, Travel Engine Solutions, LLC (“Travel Engine”) subscribed for 1,000 shares of our Series A Preferred Stock (the “Series A Shares”, which include Super Majority Voting Rights (i.e., the right to vote 51% of the Company’s outstanding voting shares on any shareholder votes) for aggregate consideration of $175,000.  

On or around January 21, 2010, Matthew Krieg, the then sole director of the Company, who is also the Manager and beneficial owner of Travel Engine, then our majority shareholder as a result of the issuance of the Series A Shares, which it held, which provided it the Super Majority Voting Rights, approved via a consent to action without meeting, the filing of a Certificate of Amendment to the Company’s Articles of Incorporation (the “Certificate”) to (a) authorize and approve a 1 for 100 reverse stock split (the “Stock Split”) of the Company’s authorized and outstanding common stock, effective as of the close of business on February 12, 2010, which Stock Split did not affect the authorized or outstanding shares of the Company’s preferred stock; (b) to change the Company’s name to “Generation Zero Group, Inc.” (the “Name Change”); (c) to reauthorize 100,000,000 shares of $0.001 par value per share common stock following the Stock Split; (d) to re-authorize 10,000,000 shares of “blank check”  preferred stock, $0.001 par value per share following the Stock Split (collectively with (c) the “Authorized Share Transactions”); and (e) to provide that the Company elects, pursuant to Section 78.434 of the Nevada Revised Statutes (the “NRS”), to not be governed by Sections 78.411 to 78.444 of the NRS, inclusive and Sections 78.378 to 78.3793, inclusive, of the NRS (the “Elections”).

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The Certificate, the Stock Split, the Name Change, the Authorized Share Transactions and the Elections were effective with the Secretary of State of Nevada on February 12, 2010, and were effective with the Financial Industry Regulatory Authority (“FINRA”) on March 8, 2010.

Unless otherwise noted, the effect of the Stock Split and Name Change has been retroactively reflected throughout this report. 

Find.com Technology Acquisition

On or around April 28, 2010, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Find.com Acquisition, Inc., a Delaware corporation (“Find.com Acquisition”).  Pursuant to the Purchase Agreement, we purchased all of Find.com Acquisition’s interest in and ownership of the assets associated with the technology and operations of the www.Find.com website and all intellectual property rights associated therewith, including technical documentation, source code, and files (collectively the “Technology Assets”).  As described below, we also subsequently purchased 100% of the ownership interests in URL Holdings, which owns the URL, Find.com.  The Technology Assets also include all service contracts related to the operations of the technology and certain unrelated domain names.  The purchase did not include any liabilities of Find.com Acquisition or the Find.com URL.  The purchase price paid to Find.com Acquisition in consideration for the Technology Assets was 10,000,000 shares of our restricted common stock, representing 98.8% of our then outstanding common stock, however, the outstanding shares of our Series A Preferred Stock provide the holder thereof super majority voting control over the Company.

Find.com URL Exchange Agreement

On or around June 30, 2010, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Find.com URL Holdings, LLC., a Georgia limited liability company (“URL Holdings”) and an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Scientigo, Inc. (“Scientigo”).

Pursuant to the Exchange Agreement, we purchased 100% of the outstanding membership interests of URL Holdings (the “URL Holdings Members”). URL Holdings owns the domain name Find.com.  URL Holdings acquired the domain name through a consensual foreclosure process prior to the acquisition of the majority ownership of URL Holdings by the Company.  Scientigo was a party to the consensual foreclosure process and had an option to acquire 40% of the domain name in exchange for Scientigo’s consent to the foreclosure.  The Company acquired and extinguished Scientigo’s option rights in connection with the Asset Purchase Agreement.

 

The Exchange Agreement provided for (a) the issuance of an aggregate of 14,000,000 shares of the Company’s restricted common stock, and (b) the issuance of secured promissory notes (“Notes”) in an aggregate principal amount of approximately $3,620,410 (representing the aggregate amount of money owed to such URL Holdings Members pursuant to previously outstanding promissory notes) to the URL Holdings Members (the “Note Holders”).  The Notes are in favor of the selling members of URL Holdings and are secured by the assets of the Company including the URL Holdings membership units purchased by the Company.  The Exchange Agreement also required that the Company make a closing payment in an aggregate amount of $50,000 to the URL Holdings Members. The outstanding principal balance of the secured URL Holdings Notes as of the date of this filing represents $2,920,250. Scientigo has since been merged with and into Phoenix Restructuring, Inc. (“Phoenix”), with Phoenix being the surviving entity in the merger.

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URL Holdings Members Notes

The Notes, bear interest at the rate of 12% per annum, and are payable as follows: (a) $50,000 which was due on the closing of the Exchange Agreement (June 30, 2010, the “Closing Date”), and which was paid to the Note Holders on such date; (b) $250,000 which was due to the Note Holders within 30 days of the closing date of the Exchange Agreement (which has not been paid to date); (c) approximately $49,918.47 which is due at the end of each quarter for six quarters, due three months, six months, nine months, twelve months, sixteen months and twenty months after the Closing Date, each representing 1/6th of the Note Holder’s portion of an aggregate of $299,511 (which has not been paid to date); (d) by way of interest payments representing the accrued interest on the Notes which are due quarterly, beginning three months after the Closing Date and continuing until 18 months from the Closing Date (which has not been paid to date); and (e) by way of twelve monthly payments of principal and interest (which monthly principal payments will total approximately $2,450,000 or $204,000 per month) representing the then outstanding balance of the Notes, the last of which payment was due December 31, 2012 (the “Maturity Date”).  The Notes may be prepaid at any time without penalty.

Upon the occurrence of any event of default under the Notes (as defined and described therein) the Notes accrue interest at 14% per annum which rate the Notes are currently accruing interest at as a result of our default in the payment of certain amounts due under the Notes, as described in greater detail below, and the Company was provided the right to obtain a thirty day extension to cure any event of default by issuing the Note Holders an aggregate of 50,000 shares of the Company’s common stock which the Company has previously taken advantage of (an “Extension”).  If any event of default occurs and is not cured within sixty days of the date of occurrence of such event of default (subject to any Extension), the Note Holders may enforce their rights under the Notes, declare the entire amount of the Notes immediately due and payable and seek to enforce their security interests (as described below).  Additionally, pursuant to the Notes, the Company is required to provide the Note Holders prompt notice of their knowledge of the occurrence of any event of default.  The right to receive further Extensions was terminated by the parties’ entry into the Forbearance Agreement (described below).

 

The Company’s repayment of the Notes is secured by a security agreement providing the Note Holders a security interest in substantially all of the Company’s assets, personal property, and URL Holdings’ ownership of Find.com (the “Security Agreements”).  Scientigo previously served as collateral agent for the benefit of the Note Holders under the Security Agreements.  When Scientigo merged into and out of existence with Phoenix Restructuring Inc., Phoenix assumed the responsibilities as collateral agent (the “Collateral Agent”).  Until the Notes are repaid in full, the Collateral Agent has the right to appoint two Managers of URL Holdings, solely for the purpose of protecting the collateral securing the Notes.  

The Company obtained the $50,000 which was due upon closing in the form of a loan, which does not bear interest or have a stated due date, from its former Chief Executive Officer, Matthew Krieg, which amount was subsequently partially repaid with the remaining amount forgiven by Mr. Krieg in May 2013.  

 

Asset Purchase Agreement with Scientigo

 

Pursuant to the Asset Purchase Agreement, the Company purchased and extinguished Scientigo’s pre-existing option to purchase a 40% interest in URL Holdings (the “Option”).  In consideration for the Option, we issued Scientigo 14,000,000 shares of restricted common stock (representing approximately 53.2% of our then outstanding shares and agreed to pay Scientigo $120,000 in cash (the “Cash Payment”).  A total of $15,000 of the Cash Payment was paid at the closing of the Asset Purchase Agreement on June 30, 2010, and a total of $55,000 was due within 30 days of closing (i.e., prior to July 30, 2010); which payment has not been made as of the date of this filing and which the Company is in default in connection with as described below.   Scientigo has since been merged with and into Phoenix, with Phoenix being the surviving entity in the merger.

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Phoenix (formerly Scientigo) also has the right pursuant to the Asset Purchase Agreement to name two members to the Company’s advisory board in order to oversee activities that may affect the collateral pledged to the Note Holders (as described above).

The Company obtained the $15,000 which was due upon closing in the form of a loan, which does not bear interest or have a stated due date, from its former Chief Executive Officer, Matthew Krieg, which amount was subsequently forgiven by Mr. Krieg in May 2013.

As described above, the Company did not make the required payment of $250,000 under the Notes to the Note Holders when due on July 30, 2010 (the “Default”) and did not made the required payments of $55,000 to Scientigo as provided in connection with the Cash Payment as of July 30, 2010, and has not made such required payments to date.  As such, Scientigo, as Collateral Agent for the Notes has declared the Notes and the Cash Payment in default.  As a result of the Default, the balance of the Notes began accruing interest at the default rate of 14% per annum.

Forbearance Agreement

Effective November 30, 2010, the Company, the Note Holders, Scientigo and URL Holdings formally executed and entered into a Forbearance Agreement (the “Forbearance Agreement”).  Pursuant to the Forbearance Agreement, the Collateral Agent agreed to forbear from taking any action in connection with the Default until March 15, 2011 (subject to any default occurring other than in connection with the Default)(the “Forbearance Period”) and that the Notes would continue to bear interest at the rate of 14% per annum during the Forbearance Period.  Additionally, the Company agreed to pay the Note Holders $100,000 of principal reduction from a total of $150,000 then held in escrow and issue such Note Holders an aggregate of 200,000 shares of common stock; reimburse the Collateral Agent for attorney’s fees in connection with the preparation of the Forbearance Agreement; and pay the Note Holders, before the end of the Forbearance Period, $332,903 of accrued but unpaid interest and $249,837 of principal on the Notes (collectively, the “Cure Payment”), which if paid prior to the end of the Forbearance Period, would result in the waiver of the Default, which Cure Payment was not made, and which requirement to make such Cure Payment was waived by the parties’ entry into the First Addendum, described below.

The Forbearance Agreement also required the Company to pay one-half of the first $300,000 of any equity or debt capital raised by the Company moving forward (i.e., up to $150,000 of any funds raised) as follows (i) first to the Collateral Agent, for transaction related expenses (until $20,000 is paid) and thereafter (ii) two-thirds of each dollar to the holders of the Notes and one-third of each dollar to the Collateral Agent with respect to the unpaid balance of the required Cash Payment.   The Forbearance Agreement also amended the Notes to remove the right of the Company to obtain an Extension as discussed above, to reduce the percentage of Note Holders’ interests required to amend the Notes to holders of at least a majority of the outstanding principal amount of the Notes (instead of 85%); and provided for the Company to pay $50,000 of the amount owed to Scientigo from the funds then held in escrow.  

The Company was not able to meet the terms of the Forbearance Agreement and in March 2012, the Note Holders, with majority approval and the Company entered into a First Addendum to Forbearance Agreement (the “First Addendum”).  Pursuant to the First Addendum, the Note Holders authorized the Collateral Agent to forbear in the exercise of its rights and remedies under the Notes, security agreement securing the Notes, Forbearance Agreement and applicable law during a forbearance period commencing on June 30, 2010 and ending on the earlier to occur of (a) January 2, 2014 or (b) the date that any default (other than relating to the payment of funds under the Notes) occurs (the “Extended Forbearance Period”).  The Notes were also renegotiated to represent a face value of $2,920,250.  Accrued interest was forgiven and no interest accrues on the Notes during the Extended Forbearance Period.  

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The First Addendum also provided that all shares issued to the Note Holders from time to time have piggy-back registration rights; the Company could borrow up to $1 million in the form of a bridge loan (in addition to up to $50,000 which could be borrowed from the Note Holders, of which a total of $40,000 was subsequently borrowed as discussed below), and that Mr. Krieg would cancel his Series A Shares in connection with the conversion of such shares into 3 million shares of common stock (provided that such cancellation and issuance occurred in May 2013, as described below) and new Series A Shares would then be issued to Cynthia S. White, which new Series A Shares were issued to Ms. White in May 2013.  We also agreed to pay the Note Holders up to 25% of our cash flow (in the discretion of the Board of Directors), in any fiscal year that cash flows associated with Find.com exceed $1 million, in connection with the Notes, and the Note Holders agreed to further forbear from taking any action under the Notes and to extend the forbearance period so long as such requirements are met. As a forbearance fee, the Company agreed to issue 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Notes held by each holder, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing.

In March 2012, four of the Secured Note Holders provided the Company non-interest bearing bridge loans in the aggregate amount of $40,000, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, however, the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes.  In consideration for providing the loan, the Company issued the participating Note Holders an aggregate of 400,000 shares of restricted common stock. The loans are secured by a first security interest in all of the Company’s properties and assets.  In September 2013, Cynthia S. White, one of our directors and a Secured Note Holder, converted a portion of the short-term debt loaned to the Company into a $10,000 bridge loan with identical terms as those described above.  The Company issued Ms. White 100,000 shares of restricted common stock in connection with the loan..

The Company raised the $150,000 paid in connection with and pursuant to the terms of the November 2010 Forbearance Agreement and funds used for working capital through the sale of promissory notes described in greater detail below under “Liquidity and Capital Resources.”

StaffMD, Inc. Acquisition

On February 4, 2011, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with StaffMD, Inc., a Georgia corporation (“StaffMD”), and the sole owner of StaffMD, Jeffrey Sisk, an individual.  Pursuant to the Merger Agreement, StaffMD was merged with and into MedicalWork, LLC, a newly formed Georgia limited liability company, and the Company’s then wholly-owned subsidiary (“MedicalWork” and the “Merger”), pursuant to which MedicalWork was the surviving entity in the Merger.  As a result of the closing of the Merger, the Company acquired StaffMD’s business known as PhysicianWork.com, which is a leading online job board for physicians.  

In consideration for Mr. Sisk’s ownership of StaffMD and in connection with the Merger, we agreed to (a) issue Mr. Sisk 6,000,000 shares of the Company’s restricted common stock (the “Sisk Shares”); (b) pay Mr. Sisk $100,000 in cash at the closing of the Merger (the “Closing”); and (c) provide Mr. Sisk a secured, subordinated promissory note in the amount of $3,950,000 (the “Seller Note”).  The Merger Agreement also provided that Mr. Sisk would serve as the Manager and President and Chief Executive Officer of MedicalWork.   Mr. Sisk entered into an Employment Agreement with MedicalWork in connection with the Closing, described in greater detail below (the “Employment Agreement”). The Sisk Shares were also granted piggy-back registration rights.

Geronimo Note

The funds paid in connection with the StaffMD Merger were financed through the entry by MedicalWork and the Company into a Senior Secured Promissory Note in the amount of $250,000 with Geronimo Property Trust (“Geronimo”) on February 1, 2011 (the “Geronimo Note”). The Company also issued Geronimo an aggregate of 250,000 shares of the Company’s restricted common stock in consideration for agreeing to enter into the Geronimo Note.

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The Geronimo Note bears interest at the rate of 12% per annum, and has a default interest rate of 18% per annum.  Monthly interest-only payments are due on the Geronimo Note, which was originally due February 1, 2012, but has since been automatically extended until February 1, 2013 by timely notification and payment of an extension fee pursuant to the terms of the note (provided that Geronimo currently disputes such extension and has filed a lawsuit against the Company for payment of the note, among other things, as described in greater detail under “Legal Proceedings”, below). The Geronimo Note was secured by a security interest in MedicalWork’s assets, pursuant to a Security Agreement.  The Geronimo Note and the associated security interest were assumed by Jeffrey Sisk on December 31, 2011, at which time the Note was current and had been automatically extended.  The Company is a secondary obligor on the Geronimo Note and remained as a secondary obligor following the parties’ entry into the Rescission Agreement/negotiated buy-back, described below.     

Rescission (Negotiated Buy-back) of StaffMD Acquisition

Effective as of December 31, 2011, we entered into an Assignment of Membership Interests Agreement (the “Rescission Agreement”) with Mr. Sisk.  Pursuant to the Rescission Agreement, we agreed to transfer and assign all right, title and interest which we held in MedicalWork (including any and all interests in PhysicianJobs.com and the URL Portfolio owned by MedicalWork) to Mr. Sisk; Mr. Sisk agreed to cancel and terminate the Seller Note and the Employment Agreement; Mr. Sisk agreed to indemnify and hold the Company harmless from any claims, costs, expenses or causes of action relating to the Geronimo Note (the “Indemnification Obligations”), provided that we remain as a secondary obligor under the Geronimo Note (which remains a direct obligation of MedicalWork being secured by all of the MedicalWork assets); and Mr. Sisk agreed to return 3,000,000 shares of our common stock (which shares were issued in connection with the Merger Agreement) to us for cancellation, which shares have been cancelled, and to further pledge to us 500,000 of the shares originally issued in connection with the Merger Agreement as collateral for the Indemnification Obligations pursuant to the Pledge Agreement entered into by the Company and Mr. Sisk.  Finally, as part of the Rescission Agreement, Mr. Sisk agreed to release us and our agents from and against any liability associated with the operations of MedicalWork; provided that the 3,000,000 shares of common stock retained by Mr. Sisk (including the 500,000 shares) still have piggy-back registration rights.  As a result of the Rescission Agreement, we no longer hold any rights to MedicalWork except that we still remain a secondary obligor under the Geronimo Note, which is currently subject to an ongoing lawsuit as described below under “Legal Proceedings”. The Rescission Agreement did not affect a full rescission of the Merger Agreement, but only returned the assets acquired to Mr. Sisk effective as of the date of the Rescission Agreement (and not effective as of the date of the original Merger Agreement).

Change in Control:

Effective May 13, 2013, the Company’s then sole director and officer, Matthew Krieg, resigned and exchanged 1,000 shares of the Company’s Series A Preferred Stock which he held for 3,000,000 shares of the Company’s restricted common stock.  On that same date, Cynthia S. White was issued 1,000 new shares of the Company’s Series A Preferred Stock (which transaction represented a change of control), was appointed as a director of and as Chief Executive Officer and President of the Company (provided that Ms. White has since resigned as President and Chief Executive Officer of the Company), and was issued 2,000,000 shares of our restricted common stock in consideration for Ms. White agreeing to serve as a director of and as President of the Company and in consideration for services previously rendered to the Company.  On that same date, Mr. Krieg authorized and issued 2,000,000 shares of our restricted common stock to the estate of Ronald Attkisson for services previously rendered to the Company and appointed Christine B. Cheney as the Secretary/Treasurer and Chief Financial Officer of the Company.

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On May 15, 2013 Ms. Cheney was issued 2,000,000 shares of our restricted common stock in consideration for services previously rendered to the Company and in consideration for agreeing to be appointed as Chief financial Officer of the Company.  On that same date, Brian Waldo was appointed as the Chief Information Officer of the Company and was issued 1,300,000 shares of our restricted common stock in consideration for services rendered to the Company in connection with the development of the upgraded and redesigned website for Find.com and for agreeing to be appointed as the Company’s Chief Information Officer.

Recent Events:

Effective on July 22, 2013, Ms. White resigned as President and Chief Executive Officer of the Company and the Board of Directors appointed Richard M. Morrell as the Chief Executive Officer, President and as a director of the Company to fill the vacancy created by her resignation.  The Board of Directors also approved the issuance to Mr. Morrell of 1,000,000 shares of the Company’s restricted stock in consideration for agreeing to serve as an officer and director of the Company.

Effective July 11, 2013, Mr. Morrell loaned the Company $25,000, which was evidenced by a Convertible Promissory Note (the “Convertible Note”). The Convertible Note accrues interest at the rate of 10% per annum (14% per annum upon an event of default) with such interest payable monthly and has a maturity date of July 10, 2015.  The Convertible Note is convertible into shares of the Company’s common stock from time to time at the option of Mr. Morrell at a conversion price of $0.08 per share.  The Company is required to provide Mr. Morrell at least thirty, but not more than sixty days prior notice in the event the Company desires to pre-pay the Convertible Note.

On September 30, 2013, the Company agreed to provide an inter-company loan of up to $250,000 to the Company’s newly formed wholly-owned subsidiary, Find.com, Inc., a Nevada corporation (“Find.com Nevada”).  As of the date of this filing a total of $20,250 has been advanced.  All advanced amounts bear interest at the rate of 3% per annum and are due and payable six months from the date of each such advance.  Advances will be used for operation and business development costs related to the Find.com e-commerce business.   Effective on August 1, 2013, the Company’s wholly-owned subsidiary, URL Holdings, provided a one year (automatically renewable unless notice of termination is provided by either party) license to Find.com Nevada to use the Find.com URL.  Pursuant to the terms of the license, Find.com Nevada is required to pay 25% of the cash flow in excess of $1 million directly to the Company, which will be used to repay the Notes.  The remainder of the funds generated by the Find.com URL is anticipated to be retained by Find.com Nevada for operations and business development.

In October 2013, Find.com Nevada entered into an agreement with a third party, pursuant to which it appointed the third party as its agent for the purpose of selling various products through the Company’s find.com website. The agreement has an initial term of three months, automatically extendable thereafter for one year periods, unless either party provides sixty days written notice to the other prior to the beginning of the next extension term.  The agreement is also terminable by either party with 30 days written notice upon a material breach of the agreement by the other party.  Pursuant to the agreement the third party receives 90% of the revenues and we receive 10% of the revenues generated by the agreement

Description of Business Activities

We operate websites at www.generationzerogroup.com; and www.find.com.  The information on, or that may be accessed through, our websites are not incorporated by reference into this filing and should not be considered a part of this filing.

Our current primary business focus is to monetize the find.com URL.  

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Description of Find.com:

Find.com, which we acquired ownership of pursuant to our purchase of 100% of the outstanding membership interests of URL Holdings, pursuant to the transactions above, is a domain name and website. The website had been powered by certain technology assets that the Company acquired on or about April 28, 2010, as described in greater detail above.  To date Find.com has generated nominal revenue, but the Company believes that the domain name can be grown into a significant Internet based business.

Four letter URL’s that spell an easy to understand word are all privately owned or reserved.  Short URL’s are preferable for marketing purposes as they are easier to remember and in the case of Find.com, the URL sends a clear message as to what the website is about so it should be easier to brand.

We believe that the Find.com URL name lends itself to being used as a search engine or for a variety of other uses as the e-commerce world continues to develop and become more focused and refined.  The Company understands that Google and other large players such as Bing and Ask.com are dominant in the search space.  The Company has no intention or belief that it will overtake or even compete with these large players.

The Company believes that it will be able to manage and operate the domain name in a manner that will create value for the Company.  This management and operation may involve strategic partnerships and revenue sharing relationships as is common in the operation of domain names.  The Company believes that Find.com has a broad reach and can be used for a variety of purposes.   However, the success of the Find.com asset is subject to the availability of necessary financing for operations and to service the Notes.  

The Find.com strategy is in the development stage.   Find.com is a URL that the Company believes has tremendous attributes as a domain name for purposes of branding and marketing for ecommerce. The Company expects to develop certain verticals within Find.com and other websites and create revenue sharing opportunities, of which there can be no assurance. The Find.com website has been upgraded and redesigned by the Company. The www.find.com beta site was redeployed on May 1, 2013 with further functionality and offerings to be released on a regular basis with future development efforts.

Plan of Operation

Our goal is to expand or build our business through a variety of efforts.  We are considering ongoing offerings of securities under private placements, acquisitions, and joint ventures with other public and private companies and other activities to either build sales or generate much needed capital to grow and undertake our business plan (for example, obtain, if possible, loans). We currently have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt securities and loans from our shareholders.  

We have not generated any significant revenues to date and do not anticipate being able to generate significant revenues until such time as we can raise substantial additional capital and our websites are further developed and marketed.

In connection with our business plan, management will try and delay additional increases in operating expenses. We have undertaken certain actions and continue to implement changes designed to improve our financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies, as well as identifying and engaging a seasoned staff of public company officers with experience and abilities to meet the strategic objectives of the Company. 

Our financial statements contain information expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we satisfy our liabilities and commitments in the ordinary course of business.

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RESULTS FROM OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2012

We had revenues generated by the Find.com subsidiary of $1,253 for the three months ended September 30, 2013 compared to no revenues for the three months ended September 30, 2012.

We had no cost of sales for the three months ended September 30, 2013 or for the three months ended September 30, 2012.

We had general and administrative expenses of $53,219 for the three months ended September 30, 2013, compared to general and administrative expenses of $20,076 for the three months ended September 30, 2012, an increase of $33,143 from the prior period.  The increase in general and administrative expenses was mainly related to the Company’s ongoing SEC filings and legal costs associated with the Company’s defense of the Geronimo lawsuit described in greater detail below under “Item 1. Legal Proceedings”.

We had $70,000 in amortization and depreciation expense for the three months ended September 30, 2013 compared with amortization and depreciation expense of $70,000 for the three months ended September 30, 2012.  Amortization and depreciation expenses relate to the Find.com assets acquired in fiscal 2010.

We had a total operating loss of $121,966 for the three months ended September 30, 2013, compared to a total operating loss of $90,076 for the three months ended September 30, 2012, an increase in total operating loss of $31,890 from the prior period due to the reasons stated above.

We had interest expense of $18,227 for the three months ended September 30, 2013, compared to interest expense of $249,530 for the three months ended September 30, 2012, a decrease in interest expense of $231,303 from the prior period, which decrease was in connection with the March 2012 First Addendum to the Forbearance Agreement (discussed above), pursuant to which, among other things, the Note Holders renegotiated the Notes to have a face value of $2,920,250, forgave interest accrued on the Notes and agreed that no interest would accrue on the Notes during the Extended Forbearance Period (i.e., subject to certain exceptions, through January 2, 2014).  Interest expense for the three months ended September 30, 2012, mainly constituted interest accrued on the Notes.  Due to the First Addendum, the Notes did not accrue any interest for the three months ended September 30, 2013.

We had a total net loss of $140,193 for the three months ended September 30, 2013, compared to a total net loss of $339,606 for the three months ended September 30, 2012, a decrease in net loss of $199,413 from the prior period, which was mainly due to the decrease in interest expense of $231,303 from the prior period and the increase in general and administrative expenses, described above.

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FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2012

We had revenues of $1,253 for the nine months ended September 30, 2013 compared to no revenues for the nine months ended September 30, 2012.

We had no cost of sales for the nine months ended September 30, 2013 or for the nine months ended September 30, 2012.

We had general and administrative expenses of $158,679 for the nine months ended September 30, 2013, compared to general and administrative expenses of $44,802 for the nine months ended September 30, 2012, an increase of $113,877 from the prior period.  The increase in general and administrative expenses was mainly related to the one-time costs associated with the preparation and filing costs associated with our previously deficient Form 10-Q’s and Form 10-K’s for the periods from March 31, 2011 to June 30, 2013, and the expenses associated with the audit and review, as applicable, of the financial statements included therein, which reports were completed and filed during the nine months ended September 30, 2013, bringing us current in our Securities and Exchange Commission reporting requirements, as well as legal costs associated with the Company’s defense of the Geronimo lawsuit described in greater detail below under “Part II. Other Information” - “Item 1. Legal Proceedings”.

We had $210,000 in amortization and depreciation expense for the nine months ended September 30, 2013 compared with amortization and depreciation expense of $210,000 for the nine months ended September 30, 2012.  Amortization and depreciation expenses relate to the Find.com assets acquired in fiscal 2010.

We had a total operating loss of $367,426 for the nine months ended September 30, 2013, compared to a total operating loss of $254,802 for the nine months ended September 30, 2012, an increase in total operating loss of $112,624 from the prior period due to the reasons stated above.

We had interest expense of $51,623 for the nine months ended September 30, 2013, compared to interest expense of $872,320 for the nine months ended September 30, 2012, a decrease in interest expense of $820,697 from the prior period, which decrease was in connection with the March 2012 First Addendum to the Forbearance Agreement (discussed above), pursuant to which, among other things, the Note Holders renegotiated the Notes to have a face value of $2,920,250, forgave interest accrued on the Notes and agreed that no interest would accrue on the Notes during the Extended Forbearance Period (i.e., subject to certain exceptions, through January 2, 2014).  Interest expense for the nine months ended September 30, 2012, mainly constituted interest accrued on the Notes.  Due to the First Addendum, the Notes did not accrue any interest for the nine months ended September 30, 2013.

We had forgiveness of debt of $30,484 for the nine months ended September 30, 2013, in connection with the forgiveness of certain debt previously owed by us to our former Chief Executive Officer, Matthew Krieg, compared with forgiveness of debt of $815,811 for the nine months ended September 30, 2012, which was in connection with the forgiveness of $815,811 of interest owed to the Secured Note Holders pursuant to the terms of the Forbearance Amendment and First Addendum thereto, described in greater detail above.

We had a total net loss of $388,565 for the nine months ended September 30, 2013, compared to a total net loss of $311,311 for the nine months ended September 30, 2012, an increase in net loss of $77,254 from the prior period, which was mainly due to the $815,811 of forgiveness of debt during the prior period and the increase in general and administrative expenses, described above, offset by the decrease in interest expense described above.  

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LIQUIDITY AND CAPITAL RESOURCES

We had total assets of $3,293,089 as of September 30, 2013, consisting of intangible assets, net of accumulated amortization of $3,290,000 and total current assets of $3,089, consisting of cash of $3,089.

We had total liabilities as of September 30, 2013 of $3,728,652, consisting of total current liabilities of $3,503,652; which included $11,690 of accounts payable, $122,644 of accrued liabilities, notes payable due within twelve months of $3,325,250 as described below, and $44,068 of loan payable to related parties, which amount was owed to the Company’s Chief Executive Officer and President and current directors in connection with certain loans made to the Company by Ms. White and Mr. Morrell, as described below; and non-current liabilities consisting of $225,000 of long-term notes payable as described below, net of unamortized discount.

We had a working capital deficit of $3,500,563 primarily due to the expiration date of the forbearance agreement and a total deficit accumulated during the development stage of $7,112,524 as of September 30, 2013.

We incurred a net loss of $140,193 for the three months ended September 30, 2013, and had an accumulated deficit of $7,112,524 as of September 30, 2013.  These conditions raise substantial doubt as to our ability to continue as a going concern.  Management is trying to raise additional capital through issuance of convertible debt notes.  The financial statements do not include any adjustments that might be necessary if Generation Zero is unable to continue as a going concern.

We had $149,076 of net cash used in operating activities for the nine months ended September 30, 2013, which was mainly due to a net loss of $388,565 offset by $210,000 of amortization of intangible assets.

We had $78,451 of net cash provided by financing activities for the nine months ended September 30, 2013, which included $44,068 of proceeds from related parties (which amount was advanced to us by our Chief Executive Officer and President and director, Richard Morrell and our director Cynthia S. White); $35,000 proceeds from convertible debt; and $29,550 of proceeds from issuance of common stock for services rendered, notes issued and for the exchange of the surrendered Series A Preferred Stock by Mr. Krieg; offset by $30,167 of repayments of third party debt in connection with the forgiveness of debt by Mr. Krieg.

In December 2009, the Company borrowed $5,000 from its then sole officer and director, Matthew Krieg. Between February and March 2010, the Company borrowed a total of $6,720 from Mr. Krieg. The amount loaned accrued zero interest and was due on demand with 90 days’ notice.  Mr. Krieg forgave this debt on May 13, 2013.  The Company borrowed $5,000 from Cynthia S. White, a director of the Company, between May and June 2013 and $38,068 from Richard M. Morrell the Chief Executive Officer and a director of the Company.  The amount bears zero interest and is due on demand with 90 days’ notice. As of September 30, 2013, a total of $44,068 was owed to officers and directors.

The Company raised the $150,000 provided to the escrow agent in connection with and pursuant to the terms of the Forbearance Agreement (described above) through the sale of promissory notes. A total of $150,000 was loaned to the Company in November 2010 by Gerald Modesitt, an individual, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date, as extended of June 2, 2014.  Additionally, Matthew Krieg, the Company’s then sole officer and director agreed to assign Mr. Modesitt an aggregate of $100,000 which the Company owed to Mr. Krieg as of the date of the Modesitt Note, which Modesitt Note evidenced a principal amount of $250,000 (representing the $150,000 loaned by Mr. Modesitt and the rights to the $100,000 assigned to Mr. Modesitt by Mr. Krieg).  The Company issued Mr. Modesitt 900,000 shares of restricted common stock in connection with the Modesitt Note, which includes 150,000 shares issued during the current period  in connection with the November 2011 extension of the note.  As of September 30, 2013, a total of $350,311 was owed under the Modesitt Note.

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Additionally in November 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date, as extended of June 2, 2014.  The Company issued the third party an aggregate of 300,000 shares of common stock in connection with the Third Party Note. As of September 30, 2013, a total of $68,054 was owed under the Third Party Note.

In March 2012, four of the Secured Note Holders provided the Company non-interest bearing bridge loans in the aggregate amount of $40,000, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, however, the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes.  In consideration for providing the loan, the Company issued the participating Note Holders an aggregate of 400,000 shares of restricted common stock. The loans are secured by a first security interest in all of the Company’s properties and assets.  In September 2013, Cynthia S. White, one of our directors and a Secured Note Holder, converted a portion of the short-term debt loaned to the Company into a $10,000 bridge loan with identical terms as those described above.  The Company issued Ms. White 100,000 shares of restricted common stock in connection with the loan..

On August 15, 2012, the Company issued a Convertible Promissory Note to John Strickland and Kimberly Ann Griffith, joint tenants, in the amount of $200,000 for working capital which included funding for the specific purpose of bringing the Company current in its SEC filings so that the Company would be in a better position to raise additional capital as needed to launch the Company’s strategic plan. The Convertible Promissory Note accrues interest at the rate of 10% per annum (payable monthly in arrears) and is due and payable on August 15, 2014.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.

As of the date of this filing, the Company owes $2,920,250 to the Note Holders in connection with the acquisition of Find.com, the payment of which is secured by a security interest in substantially all of our assets.  The Company is in default in connection with the payment of the Notes, provided that pursuant to the terms of a Forbearance Agreement and a First Addendum thereto, described in greater detail above, the Note Holders have agreed to forbear from taking any action in connection with the default during a forbearance period ending on the earlier to occur of (a) January 2, 2014 or (b) the date that any default (other than relating to the payment of funds under the Notes) occurs (the “Extended Forbearance Period”).  No interest accrues on the Notes during the Extended Forbearance Period.  The First Addendum also provided that all shares issued to the Note Holders from time to time have piggy-back registration rights; and that the Company could borrow up to $1 million in the form of a bridge loan (in addition to up to $50,000 which could be borrowed from the Secured Note Holders and which full amount has been borrowed to date). The agreement also required that Mr. Krieg transfer ownership of the Series A Shares (or cancel such shares and have them reissued) to Cynthia S. White, as collateral agent for the notes (currently in default) associated with the Find.com acquisition which transactions occurred in May 2013 as described above.   We also agreed to pay the Note Holders up to 25% of our cash flow (in the discretion of the Board of Directors), in any fiscal year that revenues associated with Find.com exceed $1 million, in connection with the Notes, and the Note Holders agreed to further forebear from taking any action under the Notes and to extend the forbearance period so long as such requirements are met.

On July 11, 2013, the Company issued a Convertible Promissory Note to Richard Morrell, in the amount of $25,000 for working capital purposes which included funding for the specific purpose of defining the Company’s strategic plan. The Convertible Promissory Note accrues interest at the rate of 10% per annum (payable monthly in arrears) and is due and payable on July 10, 2015.  The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.

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We do not currently have any formal commitments or identified sources of additional capital from third parties or from our officers, directors or majority shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we are not able to raise the capital necessary to continue our business operations, we may be forced to abandon or curtail our business plan and/or suspend our exploration activities.

 

In the future, we may be required to seek additional capital by selling additional debt or equity securities, selling assets, if any, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. This conclusion was based on the existence of the material weaknesses in our internal control over financial reporting discussed below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified and continue to have the following material weaknesses in our internal controls over financial reporting: we currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Additionally, due to the fact that we have only two officers and two directors, such lack of experienced personnel and segregation of duties may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate and timely financial information to our stockholders.  

To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls as our financial position and capital availability improves.  

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Changes in Internal Control Over Financial Reporting

We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

Part II. OTHER INFORMATION

 

Item 1. Legal Proceedings

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations except as provided below. We may become involved in material legal proceedings in the future.

On February 12, 2013, Geronimo filed a lawsuit against the Company, MedicalWork and StaffMD in the Superior Court of Fulton County, Georgia (File No. 2013CV227180), alleging breach of contract by the Company and MedicalWork, due to the Company’s and MedicalWork’s alleged failure to repay the Geronimo Note; unjust enrichment against MedicalWork and StaffMD; fraud against the Company due to alleged breaches of representations made by the Company; and seeking recovery of damages and attorneys’ fees.  The suit also seeks to enjoin us from selling find.com.  The suit claims that Geronimo never agreed to extend the due date of the Geronimo Note from February 1, 2012 to February 1, 2013 and that a total of approximately $357,500 is due pursuant to the Geronimo Note (including $250,000 of principal, $75,500 of interest and $33,000 of late charges).  Geronimo also alleges that it sent the Company a default notice relating to the Geronimo Note on February 9, 2012, provided that the Company never received such notice.  The Company subsequently filed an answer to the lawsuit, denying Geronimo’s claims, disputing substantially all of Geronimo’s allegations as untrue, and asserting counterclaims against Geronimo. The Company has withdrawn the counterclaims against Geronimo. The Geronimo Note has a security interest only in the MedicalWork assets.  At this very early stage of the litigation, the outcome cannot be predicted with any degree of reasonable certainty, however the Company intends to vigorously defend itself against Geronimo’s claims. Most recently, Geronimo has dropped their claim of fraud and has been denied efforts to seek to enjoin the Company from selling or licensing the find.com URL.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on April 25 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Effective July 22, 2013, the Company’s then sole director, Cynthia S. White, approved the issuance of 1,000,000 shares of the Company’s restricted common stock to Richard M. Morrell in consideration for agreeing to serve as, and for services to be rendered as, the Company’s Chief Executive Officer, President and director.

Effective July 11, 2013, Mr. Morrell, the Chief Executive Officer, President and director of the Company, loaned the Company $25,000 which was evidenced by a Convertible Promissory Note. The Convertible Note accrues interest at the rate of 10% per annum (14% per annum upon an event of default) with such interest payable month and has a maturity date of July 10, 2015.  

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The Convertible Note is convertible into shares of the Company’s common stock from time to time at the option of Mr. Morrell at a conversion price of $0.08 per share.  The Company is required to provide Mr. Morrell at least thirty, but not more than sixty days prior notice in the event the Company desires to pre-pay the Convertible Note.

A total of $150,000 was loaned to the Company in November 2010 by Gerald Modesitt, an individual, which was evidenced by a promissory note in the amount of $250,000 (which included $100,000 of additional debt assigned to Mr. Modesitt), discussed in greater detail above.  The Company originally issued Mr. Modesitt 750,000 shares of the Company’s restricted common stock in consideration for Mr. Modesitt agreeing to enter into the promissory note and agreed to issue Mr. Modesitt an additional 150,000 shares in connection with the extension of the note in November 2011, which shares were issued during the three months ended September 30, 2013.

In September 2013, Cynthia S. White, one of our directors and a Secured Note Holder, converted $10,000 of short-term loans to a $10,000 bridge loan with identical terms as those described above for the other bridge notes.  The Company issued Ms. White 100,000 shares of restricted common stock in connection with the loan, which shares were en issued during the three months ended September 30, 2013.

The Company claims an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Act”) for these issuances, because, among other things, the transactions did not involve a public offering, each investor was an accredited investor and/or had access to information about the Company and their investment as would be provided in a Registration Statement under the Act, each investor took the respective security for investment and not resale and the Company took appropriate measures to restrict the transfer of the securities. None of these securities may be re-offered or resold absent either registration under the Act or the availability of an exemption from the registration requirement.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information.

None.

Item 6. Exhibits

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.

	Generation Zero Group, Inc.
Dated: November  19, 2013	By:	/s/ Richard M. Morrell
		Richard M. Morrell
		President, Chief Executive Officer (Principal Executive Officer), and Director
	By:	/s/ Christine B. Cheney Christine B. Cheney Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), Treasurer, and Secretary

 

 

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EXHIBIT INDEX

Exhibit Number	Description of Exhibit
10.1(1)	Asset Purchase Agreement with Find.com Acquisition, Inc.
10.2(2)	Share Exchange Agreement with the Members of URL Holdings
10.3(2)	Asset Purchase Agreement with Scientigo, Inc.
10.4(2)	Security Agreement executed by the Company in favor of Scientigo as collateral agent for the holders of the Notes
10.5(2)	Form of Secured Promissory Notes
10.6(2)	$55,000 Promissory Note with Scientigo
10.7(3)	Note Termination Agreement dated October 23, 2010 by and between Generation Zero Group, Inc. and Seven Palm Investments, LLC
10.8(4)	Promissory Note $250,000 with Gerald Modesitt   dated November 4, 2010
10.9(5)	Amendments to Promissory Note $250,000 with Gerald Modesitt dated April 16, 2012 and June 15, 2012
10.10(4)	Promissory Note $50,000 with Equity Trust Company Custodian FBO Larry Gantz IRA 110591  dated November 4, 2010
10.11(5)	Amendments to Promissory Note $50,000 with Equity Trust Company Custodian FBO Larry Gantz IRA 110591  dated April 16, 2012 and June 15, 2012
10.12(4)	Assignment of Exclusive Agreement by Talent Search and Rescue, LLC in favor of Generation Zero Group, Inc. dated September 30, 2010
10.13(6)	Forbearance and Note Amendment Agreement
10.14(7)	Promissory Note ($3,950,000 – Jeffrey Sisk)
10.15(7)	Promissory Note ($250,000 – Geronimo Property Trust)
10.16(7)	Employment Agreement with Jeffrey Sisk
10.17(7)	Security Agreement with Geronimo Property Trust
10.18(7)	Subordination Agreement with Collateral Agent for Senior Noteholder
10.19(5)	Revision of Payment Terms of Promissory Note with Jeffrey Sisk
10.20(5)	Employment Agreement Compensation Waiver with Jeffrey Sisk (effective April 16, 2011)
10.21(5)	Assignment of Membership Interests Agreement with Jeffrey Sisk (December 31, 2011)

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10.22(5)	Pledge Agreement with Jeffrey Sisk (December 31, 2011)
10.23(5)	Convertible Promissory Note – John Strickland and Kimberly Ann Griffith (August 15, 2012)
10.24(5)	First Addendum to Forbearance and Note Amendment Agreement
10.25(8)	Convertible Promissory Note with Richard M. Morrell dated July 11, 2013 ($25,000)
10.26*	$10,000 Promissory Note with Cynthia S. White (September 30, 2013)
10.27*	Extension of $250,000 Modesitt Note (November 2011)
31.1*	Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certificate of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certificate of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certificate of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

101.INS#	XBRL Instance Document
101.SCH#	XBRL Taxonomy Extension Schema Document
101.CAL#	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF#	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB#	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**#	XBRL Taxonomy Extension Presentation Linkbase Document

*   Filed herewith. 

** Furnished herewith

(1) Filed as an exhibit to our Form 10-Q Quarterly Report, filed with the Commission on May 24, 2010, and incorporated herein by reference.

(2) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on July 12, 2010, and incorporated herein by reference.

(3) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 22, 2010, and incorporated herein by reference.

(4) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 24, 2010, and incorporated herein by reference.

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(5) Filed as an exhibit to our Form 10-K Annual Report, filed with the Commission on January 25, 2013 and incorporated herein by reference.

(6) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on December 10, 2010, and incorporated herein by reference.

(7) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on February 14, 2011, and incorporated herein by reference.

(8) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on July 23, 2013, and incorporated herein by reference.

#  XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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