Green Technology Solutions, Inc. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Green Technology Solutions, Inc.	Financial_Report.xls
EX-32.1 - EX-32.1 - Green Technology Solutions, Inc.	ex32-1.htm
EX-31.1 - EX-31.1 - Green Technology Solutions, Inc.	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2013

¨ 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 1-11248

GREEN TECHNOLOGY SOLUTIONS, INC.

(formerly Sunrise Energy Resources, Inc.)

(Exact name of Registrant as specified in its charter)

Delaware		84-0938688
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

2880 Zanker Road, Suite 203
San Jose, CA		95134
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (408) 432-7285

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, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

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 14, 2013, the Registrant had 58,600,966shares of common stock issued and outstanding.

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GREEN TECHNOLOGY SOLUTIONS, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited)	3

	Consolidated Balance Sheets – September 30, 2013 and December 31, 2012 (unaudited)	3

	Consolidated Statements of Operations – for the nine months and three months ended September 30, 2013 and 2012 and for the period from June 12, 2010 (date of re-entry to development stage) through September 30, 2013 (unaudited)	4

	Consolidated Statements of Changes in Stockholders’ Deficit – for the period from June 12, 2010 (date of re-entry to development stage) through September 30, 2013 (unaudited)	5

	Consolidated Statements of Cash Flows - for the nine months ended September 30, 2013 and 2012 and for the period from June 12, 2010 (date of re-entry to development stage) through September 30, 2013 (unaudited)	6

	Notes to the Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16

Item 4.	Controls and Procedures	16

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults upon Senior Securities	17

Item 4.	[Removed and Reserved]	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

SIGNATURES		18

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PART I – FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

GREEN TECHNOLOGY SOLUTIONS, INC.

(a development stage company)

CONSOLIDATED BALANCE SHEETS

	September 30, 2013			December 31, 2012
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	41,324		$	872
Total current assets		41,324			872

TOTAL ASSETS	$	41,324		$	872

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accounts payable	$	93,506		$	76,153
Advances payable		-			263,648
Total current liabilities		93,506			339,801

Convertible notes payable, net of discount of $531,273 and $326,580, respectively		90,452			163,653

TOTAL LIABILITIES		183,958			503,454

STOCKHOLDERS’ DEFICIT
Common Stock, $0.001 par value, 75,000,000 authorized, 54,775,966 and 34,202,694 issued and outstanding as of September 30, 2013 and December 31, 2012, respectively		54,776			34,203
Additional paid-in capital		10,916,699			9,868,728
Common stock payable		5,000			5,000
Accumulated deficit		(7,113,753	)		(7,113,753	)
Deficit accumulated during the development stage		(4,005,356	)		(3,296,760	)
Total stockholders' deficit		(142,634	)		(502,582	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	41,324		$	872

The accompanying notes are an integral part of these consolidated financial statements.

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GREEN TECHNOLOGY SOLUTIONS, INC.

(a development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Nine months ended						Three months ended						For the period from June 12, 2010 (date of re-entry of development stage) through
	September 30,						September 30,						September 30,
	2013			2012			2013			2012			2013

OPERATING EXPENSES
General and administrative expenses	$	239,211		$	208,336		$	70,426		$	65,768		$	1,911,688

LOSS FROM OPERATIONS		(239,211	)		(208,336	)		(70,426	)		(65,768	)		(1,911,688	)

OTHER EXPENSES
Interest expenses, net		(419,385	)		(962,569	)		(167,014	)		(38,511	)		(1,763,668	)
Impairment of investments		(50,000	)		(6,000	)		(50,000	)		(4,000	)		(330,000	)
Total other income (expense)		(469,385	)		(968,569	)		(217,014	)		(42,511	)		(2,093,668	)

NET LOSS	$	(708,596	)	$	(1,176,905	)	$	(287,440	)	$	(108,279	)	$	(4,005,356	)

NET LOSS PER COMMON SHARE – Basic and fully diluted	$	(0.02	)	$	(0.04	)	$	(0.01	)	$	-

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		45,369,509			30,084,063			53,713,054			31,202,694

The accompanying notes are an integral part of these consolidated financial statements.

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GREEN TECHNOLOGY SOLUTIONS, INC.

(a development stage company)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

													Deficit
													accumulated
					Additional			Common					during the
	Common Stock				Paid-In			Stock		Accumulated			development			Equity
	Shares		Amount		Capital			Payable		Deficit			stage			Total
BALANCE, JUNE 12, 2010		395	$	-	$	6,650,413		$	-	$	(7,113,753	)	$	-		$	(463,340	)

Correction in number of shares outstanding		1		-		-			-		-			-			-
Issuance of shares for conversion of note payable		50		-		30,000			-		-			-			30,000
Issuance of shares for conversion of note payable		66,667		67		199,933			-		-			-			200,000
Imputed interest expense		-		-		25,808			-		-			-			25,808
Net loss		-		-		-			-		-			(685,610	)		(685,610	)

BALANCE, DECEMBER 31, 2010		67,113	$	67	$	6,906,154		$	-	$	(7,113,753	)	$	(685,610	)	$	(893,142	)

Issuance of shares for conversion of note payable		70,000		70		209,930			-		-			-			210,000
Issuance of shares for consulting services		5,000		5		209,995			-		-			-			210,000
Share rounding on reverse split		3		-		-			-		-			-			-
Beneficial conversion feature on convertible note payable		-		-		1,179,356			-		-			-			1,179,356
Imputed interest expense		-		-		84,126			-		-			-			84,126
Net loss		-		-		-			-		-			(1,193,838	)		(1,193,838	)

BALANCE, DECEMBER 31, 2011		142,116	$	142	$	8,589,561		$	-	$	(7,113,753	)	$	(1,879,448	)	$	(403,498	)

Issuance of shares for conversion of notes payable		34,056,100		34,057		987,626			-		-			-			1,021,683
Share rounding on reverse split		4,478		4		(4	)		-		-			-			-
Beneficial conversion feature on convertible note payable		-		-		251,468			-		-			-			251,468
Imputed interest expense		-		-		40,077			-		-			-			40,077
Common stock payable on investment		-		-		-			5,000		-			-			5,000
Net loss		-		-		-			-		-			(1,417,312	)		(1,417,312	)

BALANCE, DECEMBER 31, 2012		34,202,694	$	34,203	$	9,868,728		$	5,000	$	(7,113,753	)	$	(3,296,760	)	$	(502,582	)

Issuance of shares for conversion of notes payable		20,573,272		20,573		448,362			-		-			-			468,935
Discount on convertible notes payable						575,958											575,958
Imputed interest expense		-		-		23,651			-		-			-			23,651
Net loss		-		-		-			-		-			(708,596	)		(708,596	)

BALANCE, SEPTEMBER 30, 2013		54,775,966	$	54,776	$	10,916,699		$	5,000	$	(7,113,753	)	$	(4,005,356	)	$	(142,634	)

On November 19, 2010, the Company effected a one-for-200 reverse stock split. All share and per share numbers have been restated to reflect the reverse split.

On January 21, 2012, the Company effected a one-for-300 reverse stock split. All share and per share numbers have been restated to reflect the reverse split.

The accompanying notes are an integral part of these consolidated financial statements.

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GREEN TECHNOLOGY SOLUTIONS, INC.

(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the nine months ended September 30,						For the period from June 12, 2010 (date of re-entry to development stage) through September 30,
	2013			2012			2013

CASH USED IN OPERATING ACTIVITIES:
Net loss	$	(708,596	)	$	(1,176,905	)	$	(4,005,356	)
Adjustments to reconcile net loss to net cash in operating activities:
Impairment of investment in joint venture		50,000			6,000			330,000
Stock issued for consulting services		-			-			210,000
Imputed interest expense		23,651			27,819			173,662
Amortization of discount on convertible notes payable		371,265			912,003			1,475,509
Changes in operating assets and liabilities:
Prepaid expenses		-						-
Accounts payable and accrued liabilities		17,353			781			45,883
Accrued interest payable		24,469			22,747			124,844
NET CASH USED IN OPERATING ACTIVITIES		(221,858	)		(207,555	)		(1,645,458	)

CASH USED IN INVESTING ACTIVITIES
Cash used in investment in joint venture		(50,000	)		(6,000	)		(320,000	)
NET CASH USED IN INVESTING ACTIVITIES		(50,000	)		(6,000	)		(320,000	)

CASH PROVIDED BY FINANCING ACTIVITIES:
Proceeds from advances		312,310			217,853			2,006,782
NET CASH PROVIDED BY FINANCING ACTIVITIES		312,310			217,853			2,006,782

NET INCREASE IN CASH		40,452			4,298			41,324
CASH, at the beginning of the period		872			979			-

CASH, at the end of the period	$	41,324		$	5,277		$	41,324

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	-		$	-		$	-
Taxes	$	-		$	-		$	-

Noncash investing and financing transactions:
Issuance of stock for consulting services	$	-		$	-		$	210,000
Refinancing of demand notes to convertible notes payable	$	575,958		$	-		$	2,427,499
Issuance of stock for conversion of convertible notes payable	$	415,351		$	931,683		$	1,877,034

The accompanying notes are an integral part of the consolidated financial statements.

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GREEN TECHNOLOGY SOLUTIONS, INC.

(a development stage company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.	INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim financial statements include all adjustments, which in the opinion of management are necessary in order to make the accompanying financial statements not misleading, and are of a normal recurring nature. However, the accompanying consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows and stockholders’ deficit in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in our annual financial statements for the period ended December 31, 2012 included in Form 10-K. Operating results for the period ended September 30, 2013 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2013.

2.	PRESENTATION OF FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Going concern - The Company’s consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the financial statements, the Company incurred a net loss of $708,596 during the nine months ended September 30, 2013, while the Company’s current liabilities exceeded its current assets by $52,182.

In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis by raising additional funds through debt or equity financing. The Company expects to satisfy its cash requirements by obtaining additional loans; however, there is no assurance that additional capital will be available to the Company when needed and on acceptable terms. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

Use of Estimates and Assumptions – The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from these estimates.

Cash and Cash Equivalents – Cash includes petty cash and cash held on current bank accounts. Cash equivalents include short-term investments with an original maturity of three months or less that are readily convertible to known amounts of cash which are subject to insignificant risk of changes in value. Cash and cash equivalents as of September 30, 2013 and December 31, 2012 consisted mainly of U.S. dollar-denominated current accounts held at major banks.

Revenue Recognition – The Company is not currently generating revenue; however, revenue generated in the future will be recognized in accordance with SEC rules. The four criteria that must be met in order to recognize revenue are: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonable assured.

Earnings (Loss) per Share – Earnings (loss) per share are computed in accordance with current accounting literature. Basic earnings (loss) per share are calculated by dividing the net income (loss) available to common stockholders by the weighted average number of shares outstanding during the year. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity. In a loss year, dilutive common equivalent shares are excluded from the loss per share calculation as the effect would be anti-dilutive.

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Recently Issued Accounting Pronouncements – In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

3.	CHILERECICLA JOINT VENTURE

On March 4, 2013 we entered into a letter of intent with Sociedad de Reciclaje de Materiales Metalicos, Electrico, Electronicos y Plasticas Limitada (“Chilerecicla”) to explore opportunities with Latin America electronic waste recyclers for the purpose of recovering precious metals, minerals and waste to energy possibilities. Chilerecicla is based near Santiago Chile with significant operations across the country and surrounding regions.

On June 6, 2013 GTSO and Chilerecicla signed a joint venture agreement to evaluate, explore and determine the feasibility of a waste management collection, processing and sales operation wherein GTSO will contribute funding and the initial development of a project to acquire electronics and plastic waste for the purpose of selling metals and plastics reuse while Chilerecicla manages the Latin America operations. Under the terms of the agreement, GTSO commits to fund a minimum of $2,500 of the cash flow requirements of the start-up phase of the operations. Chilerecicla agrees to reserve 30% of the gross proceeds of the business for repayment of the initial contribution. At the end of the start-up phase, Chilerecicla will provide GTSO with a detailed timeline, budget and operational plan for further development. Both parties will have 60 days to agree on an appropriate funding strategy for the next phase. GTSO will have no obligation to continue funding the business.

On September 1, 2013, GTSO and Chilerecicla signed a second joint venture agreement (the “Chilerecicla JV”) to execute an initial spot and single operation as a way to test in practice the planning they have designed so far. Under the terms of this second agreement, GTSO will contribute $50,000 which is payable in two installments within 30 days. These funds will be used to purchase electronic and plastic waste in Chile and to export and sell minerals, metals and plastics for reuse. Chilerecicla will manage the process of purchasing and selling the e-waste materials. Under the terms of the agreement, GTSO will receive a minimum of 50% of the net profits of the Chilerecicla JV.

The Chilerecicla JV represents an investment in an unproven start-up operation and an emerging market. Therefore, the likelihood of the Chilerecicla JV to be able to realize profitable operations and positive cash flow is unknown at this time. As a result, GTSO has expensed all investments in this joint venture, although the Company still believes that it represents a positive business opportunity.

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4.	CONVERTIBLE NOTES PAYABLE

On April 1, 2013, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $96,463 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on March 31, 2015. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.01 per share.

On June 30, 2013, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $167,185 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on June 30, 2015. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.01 per share.

On September 30, 2013, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $312,310 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on September 30, 2015. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.01 per share.

The Company evaluated the terms of these notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion features and account for them as a separate derivative liabilities. The Company evaluated the conversion features for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized beneficial conversion features in the amounts of $96,463, $167,185 and $312,310 on April 1, 2013, June 30, 2013 and September 30, 2013, respectively. The beneficial conversion features were recorded as an increase in additional paid-in capital and a discount to the Convertible Notes Payable. The discounts to the Convertible Notes Payable will be amortized to interest expense over the life of the respective notes.

The holders of the $517,673 Convertible Note Payable elected to convert principal and interest as follows:

Date	Principal Converted		Common stock issued upon conversion
January 14, 2013	$	84,000		2,800,000
February 28, 2013		18,000		600,000
March 11, 2013		57,000		1,900,000
March 18, 2013		36,303		1,210,088

Total	$	195,303		6,510,088

As a result of these conversions, unamortized discount in the total amount of $71,878 was immediately amortized to interest expense. The converted amount of principal and accrued unpaid interest in the total amount of $195,303 was recognized as an increase in stockholders’ equity as a result of these conversions. There was no gain or loss on these conversions, because they were effected in accordance with the terms of the convertible note agreement.

On February 28, 2013, the holder of the 10% Subordinated Convertible Note Payable dated May 23, 2010 elected to convert principal in the amount of $7,632 into 763,184 shares of common stock. There was no gain or loss on the conversion, because it was effected in accordance with the terms of the convertible note agreement.

The holders of the $251,468 Convertible Note Payable elected to convert principal as follows:

Date	Principal Converted		Common stock issued upon conversion
April 30, 2013		80,000		4,000,000
June 14, 2013		40,000		2,000,000
July 12, 2013		36,500		1,825,000
July 15, 2013		73,000		3,650,000
July 22, 2013		36,500		1,825,000

Total	$	266,000		13,300,000

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As a result of these conversions, unamortized discount in the total amount of $208,102 was immediately amortized to interest expense. The converted amount of principal and accrued unpaid interest in the total amount of $266,000 was recognized as an increase in stockholders’ equity as a result of these conversions. There was no gain or loss on these conversions, because they were effected in accordance with the terms of the convertible note agreement.

5.	ADVANCES PAYABLE

During nine months ended September 30, 2013, the Company has received working capital advances in the amount of $312,310. These advances are non-interest bearing and payable upon demand. The Company has imputed interest on these advances in the amount of $23,651 for the nine months ended September 30, 2013. The imputed interest was recorded as an increase in additional paid-in capital.

During the nine months ended September 30, 2013, non-interest bearing advances in the amount of $575,958 were refinanced into Convertible Notes Payable. See Note 3.

6.	SHAREHOLDERS’ EQUITY

On January 14, 2013, the Company issued 2,800,000 shares of common stock upon conversion of a portion of the $517,673 Convertible Note Payable in the amount of $84,000.

On February 28, 2013, the Company issued 600,000 shares of common stock upon conversion of a portion of the $517,673 Convertible Note Payable in the amount of $18,000.

On February 28, 2013, the Company issued 763,184 shares of common stock for the conversion of $7,632 of principal of the 10% Subordinated Convertible Notes Payable

On March 11, 2013, the Company issued 1,900,000 shares of common stock upon conversion of a portion of the $517,673 Convertible Note Payable in the amount of $57,000.

On March 18, 2013, the Company issued 1,210,088 shares of common stock upon conversion of a portion of the $517,673 Convertible Note Payable in the amount of $36,303.

On April 30, 2013, the Company issued 4,000,000 shares of common stock upon conversion of a portion of the $251,468 Convertible Note Payable in the amount of $80,000.

On June 13, 2013, the Company issued 2,000,000 shares of common stock upon conversion of a portion of the $251,468 Convertible Note Payable in the amount of $40,000.

On July 12, 2013, the Company issued 1,825,000 shares of common stock upon conversion of a portion of the $251,468 Convertible Note Payable in the amount of $36,500.

On July 15, 2013, the Company issued 3,650,000 shares of common stock upon conversion of a portion of the $251,468 Convertible Note Payable in the amount of $73,000.

On July 22, 2013, the Company issued 1,825,000 shares of common stock upon conversion of a portion of the $251,468 Convertible Note Payable in the amount of $36,500.

The Company has imputed interest on advances in the amount of $23,651 for the nine months ended September 30, 2013. The imputed interest was recorded as an increase in additional paid-in capital.

7.	COMMITMENTS AND CONTINGENCIES

Litigation– The Company has been and continues to be the subject of legal proceedings and adjudications from time to time. Management believes that the resolution of all business matters which will have a material impact on the Company’s financial position or operating results have been recorded.

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8.	RISK MANAGEMENT POLICIES

Management of risk is an essential element of the Company’s operations. The main risks inherent to the Company’s operations are those related to credit risk exposures and market movements in interest rates. A description of the Company’s risk management policies in relation to those risks is provided below.

Credit risk– The Company is exposed to credit risk which is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss.

Interest rate risk – Interest rate risk arises from the possibility that changes in interest rates will affect the value of a financial instrument.

Currently, the Company’s approach to the interest risk limitation is borrowing at fixed rates and for short periods.

9.	SUBSEQUENT EVENTS

Subsequent to September 30, 2013, the holders of the $96,463 Convertible Note Payable dated April 1, 2013 elected to convert principal and interest as follows:

Date	Principal and Interest Converted		Common stock issued upon conversion
October 1, 2013		36,500		1,825,000
November 6, 2013		20,000		2,000,000

Total	$	56,500		3,825,000

As a result of these conversions, unamortized discount in the total amount of $37,143 was immediately amortized to interest expense. The converted amount of principal and accrued unpaid interest in the total amount of $56,500 was recognized as an increase in stockholders’ equity as a result of these conversions. There was no gain or loss on these conversions, because they were effected in accordance with the terms of the convertible note agreement.

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

The following discussion should be read in conjunction with the Company's unaudited financial statements and associated notes appearing elsewhere in this Form 10-Q.

As used in this report, the terms "we", "us", "our", the "Company" and "GTSO" mean Green Technology Solutions, Inc., unless otherwise indicated.

Caution Regarding Forward-Looking Information

All statements contained in this Form 10-Q, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," and similar expressions . All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties described under “Risk Factors” under Part II Item 1A below and in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2012 that may cause actual results to differ materially.

Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company's views as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Discussion and Analysis of Financial Condition

Organization and Basis of Presentation

Company History

Green Technology Solutions, Inc. (“GTSO”, “we”, “us”, “our” or the “Company”) was incorporated as XCL Sunrise, Inc. in the State of Delaware on April 1, 1991. We changed our name to Sunrise Energy Resources, Inc. on November 1, 2004. On October 26, 2010, we changed our name to Green Technology Solutions, Inc.

On September 20, 2012 GTSO formed two subsidiaries which may be used to hold GTSO’s urban and traditional mining operations. The new subsidiaries are GTSO Urban Mining LLC and GTSO Resources LLC.

GTSO is in the business of identifying and acquiring rights in early stage, breakthrough green technologies, with the plan to develop these technologies into marketable products. To date, we have identified the following market segments: (1) the advancement of cleaner world-wide mining technologies, with an emphasis on rare earth and precious metals mining applications, (2) the development of additional markets for environmentally friendly methods of recovering minerals from electronic waste and (3) smart grid technology. Our mission is to focus our resources on discovering the best available new innovative technologies and processes in this industry space and we intend to work with young companies and inventors to deliver innovation in the real world.

In addition to the foregoing, we plan to focus our resources on successfully identifying new green technologies that have greatest potential to produce near term profits. Due to our limited management and employees, we expect to continue to form strategic joint venture relationships with early stage development technology companies whose goals and objectives are similar to ours. Moreover, we anticipate continued use of and reliance upon industry consultants who have the knowledge and expertise in the areas of our existing and future business ventures. We have located our new offices in the Silicon Valley city of Palo Alto, California, which management believes may increase access to cutting edge technologies. As of September 30, 2013, the Company has one employee.

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On June 12, 2010, five purchasers acquired control of 82,519 shares (16,503,817 pre-split shares) of our issued and outstanding common stock representing approximately 69.67% of the total number of issued and outstanding shares from Burisma Holdings Limited. The aggregate purchase price for the shares was $270,000. Cambridge Securities of Panama, a Panama corporation, acquired 60,411 shares of common stock, and four other unrelated corporations each acquired control of 5,527 shares of common stock. As a result of this transaction, there was a change in control of the Company, and Cambridge Securities of Panama became the Company’s majority shareholder.

Current Plan of Operations

We are currently identifying possible early stage companies and technology across a range of green technologies and environmentally friendly practices for the purpose of acquiring rights to them, joint venture partnerships and developing them into marketable products. We have already identified several potential new technology endeavors and management is studying these endeavors for their potential inclusion into our development process.

On June 8, 2012, we signed a joint venture agreement with Diamond V Associates, Inc. to fund the research, planning and development of tungsten and other rare earths and precious metals in North America and Africa. According to the agreement, all profits, losses and other allocations to the joint venture shall be allocated as follows at the conclusion of each fiscal year on a 50:50 basis between GTSO and Diamond V Associates. We will contribute $2,000 per month to the joint venture for working capital for the joint venture’s operations. GTSO reserves the right to reduce or increase this contribution based on performance by Diamond V Associates. If we determine that additional funding is required after projects are identified, we will negotiate the amount of any contribution that we would make with Diamond V Associates. GTSO paid $10,000 during the year as working capital. As of December 31, 2012, Management determined that it was necessary to write off the intangible asset related to this joint venture agreement due to the fact the joint venture will need to raise significant additional capital in order to fully realize the value of our claims in the joint venture.

On July 10, 2012, we signed a letter of intent regarding the potential acquisition of Global Cell Buyers, LLC. The letter of intent provides us with 90 days to perform due diligence and negotiate a final purchase price. Global Cell Buyers, LLC is a development stage business which plans to buy, sell and recycle cell phones.

On July 24, 2012, we entered into letter of intent CCI Capital SPA with offices in Santiago, Chile to explore acquisition opportunities in Latin America with a focus on urban mining and waste to energy projects. On September 5, 2012 this was expanded into a one year consulting agreement to explore acquisition opportunities in Latin America and Canada where CCI Capital SPA has active offices in Chile and Canada. GTSO pays CCI Capital $2,000 per month as a retainer for nominal consulting, negotiation and market research studies in the pursuit of an acquisition focused on urban mining and waste to energy projects.

On October 30 2012, we entered into a purchase agreement with Global Cell Buyers, LLC regarding the acquisition of existing methods, brand name, and current operating plans. Global Cell Buyers was acquired by GTSO for the purchase price of $10,000 payable in cash and common stock. The purpose of of this acquisition is to expand recycling and urban mining operations from cell phones to other electronic waste for the purpose of mineral and other reusable metal and plastic recovery. GTSO also plans to expand the brand name of Global Cell Buyers leveraging its parent operations Green Technology Solutions, Inc. On November 14, 2012, GTSO rebranded Global Cell Buyers under the name “Global Urban Mining” to build and expand its e-recycling platform within the United States and eventual global expansion plans.

The purchase price was allocated entirely to intangible assets related to the Global Cell Buyers’ infrastructure plans related to mineral recovery from cell phone waste. Global Cell Buyers had no other tangible assets or liabilities. As of December 31, 2012, Management determined that it was necessary to write off the intangible asset related to this acquisition due to the fact that Global Cell Buyers was in the early development stages and did not have adequate operating history to support retaining the intangible asset on the consolidated balance sheet.

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On September 1, 2013, GTSO and Chilerecicla signed a second joint venture agreement (th “Chilerecicla JV”) to execute an initial spot and single operation as a way to test in practice the planning they have designed so far. Under the terms of this second agreement, GTSO will contribute $50,000 which is payable in two installments within 30 days. These funds will be used to purchase electronic and plastic waste in Chile and to export and sell minerals, metals and plastics for reuse. Chilerecicla will manage the process of purchasing and selling the e-waste materials. Under the terms of the agreement, GTSO will receive a minimum of 50% of the net profits of the Chilerecicla JV.

Through GTSO’s newest initiatives in traditional and urban mining, rare earth and precious metals sector, the Company plans to create the necessary processes, logistics and distribution channels to mine, recover, distribute and sell precious and other metals to the global marketplace. The Company intends to be a driving force behind a more competitive minerals and metals mining and recovery market. The Company’s alliances in South America, Asia and Africa provide a strategic advantage and access to one of the most plentiful rare earth and minerals deposits in the world. GTSO has also identified additional joint venture and acquisition targets in China, Africa and South America. The mission is to meet the growing demand for gold, silver, tungsten and other precious and rare metals, while introducing sustainable and environmentally friendly practices that also create new products and reduce greenhouse gas pollutants through the use of biomass and organic carbon sequestration.

GTSO will continue traditional mining operations through joint ventures such as Diamond V Associates, but the current acquisition and joint venture focus for 2013 will be building sustainable recovery methods of precious, rare and other metals and minerals through utilizing existing electronic waste. The first two quarters of 2013 will be building its US operations through the purchase of Global Cell Buyers and branding strategy under the name “Green Urban Mining”. In addition, GTSO has identified several target companies in emerging market such as Latin America to leverage current collection and distribution of e-waste for the use of valuable metals they contain. GTSO plans to continue support of traditional mining operations such as placer mining through Diamond V Associates and other innovative prospectors and operators on a case by case scenario.

Results of Operations and Going Concern

We incurred a net loss of $708,596 for the nine months ended September 30, 2013, and had a working capital deficit of $52,182 as of September 30, 2013. We do not anticipate having positive net income in the immediate future. Net cash used in operations for the nine months ended September 30, 2013 was $221,858. These conditions create an uncertainty as to our ability to continue as a going concern.

We continue to rely on advances to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurance that we will continue to have such advances available. We will not be able to continue operations without them. We are pursuing alternate sources of financing, but there is no assurance that additional capital will be available to the Company when needed or on acceptable terms.

Results of Operations for the Nine Months ended September 30, 2013 compared to the Nine Months ended September 30, 2012.

General and Administrative Expenses

General and administrative expenses increased in the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012 from $208,336 to $239,211 due to increases in professional and consulting fees.

Loss from Operations

The increase in our operating loss for the nine months ended September 30, 2013 as compared to the comparable period of 2012 from $208,336 to $239,211 is due to the increase in general and administrative expenses described above.

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Other Expense

Interest expense decreased during the nine months ended September 30, 2013 compared to the same period of 2012 from $962,569 to $419,385. The decrease was primarily the result of amortization of discounts on convertible notes payable. Interest expense included amortization of discounts on convertible notes payable in the amounts of $371,265 and $912,003 for the nine months ended September 30, 2013 and 2012, respectively. During the nine months ended September 30, 2012, there was a single conversion of a convertible note payable which accounted for approximately 69% of the amortization expense for the period. This resulted in significantly larger amortization expense for 2012 as compared to 2013.

Net Loss

We recognized a net loss of $708,596 for the nine months ended September 30, 2013 as compared to a net loss of $1,176,905 for the same period of 2012. Changes in net loss are primarily attributable to the decrease in interest expense partially offset by the increase in general and administrative expenses as described above.

Results of Operations for the Three Months ended September 30, 2013 compared to the Three Months ended September 30, 2012.

General and Administrative Expenses

General and administrative expenses increased in the three months ended September 30, 2013 as compared to the three months ended September 30, 2012 from $65,768 to $70,426 due to increased professional and consulting fees.

Loss from Operations

The increase in our operating loss for the three months ended September 30, 2013 as compared to the comparable period of 2012 from $65,768 to $70,426 is due to the increase in general and administrative expenses described above.

Other Expense

Interest expense increased during the three months ended September 30, 2013 compared to the same period of 2012 from $38,511 to $167,014. The increase is primarily related to increased amortization of discounts on convertible notes payable.

Net Loss

We recognized a net loss of $287,440 for the three months ended September 30, 2013 as compared to a net loss of $108,279 for the same period of 2012. Changes in net loss are primarily attributable to the increase in interest expense partially offset by the decrease in general and administrative expenses as described above.

Liquidity and Capital Resources

Net cash used by operating activities was $221,858 and $207,555 for the nine months ended September 30, 2013 and 2012, respectively. The decrease is mainly attributable to the decreased net loss as a result of lower general and administrative expenses as well as a decrease in amortization of discount on convertible note payables.

Cash provided by financing activities was $312,310 and $217,853 for the nine months ended September 30, 2013 and 2012, respectively. The decrease is mainly attributable to decreased advances received which were required to fund the Company’s operations.

We had negative working capital of $52,182 as of September 30, 2013 compared to $338,929 as of December 31, 2012. Our cash position increased to $41,324 at September 30, 2013 compared to $872 at December 31, 2012.

Our monthly cash requirement amount is approximately $25,000, and as of September 30, 2013, cash on hand would fund operations for less than three months.

The Company anticipates it will require around $800,000 to sustain operations and effectively evaluate new business opportunities over the next twelve months. However, if our mining claims show significant deposits, then we may require several million dollars of additional financing. The Company intends to seek to raise these funds through equity and debt financing; however, there is no guarantee that funds will be raised and the Company has no agreements in place as of the date of this filing for any financing.

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We do not have any material commitments for capital expenditures. However, should we execute our business plan as anticipated, we would incur substantial capital expenditures and require financings in addition to what is required to fund our present operations.

Additional Financing

Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.

Off Balance Sheet Arrangements

None

Cash requirements

The Company anticipates it will require around $800,000 to sustain operations and effectively evaluate new business opportunities over the next twelve months. The Company intends to seek to raise these funds through equity and debt financing; however, there is no guarantee that funds will be raised and the Company has no agreements in place as of the date of this filing for any financing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2013. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2013, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of September 30, 2013, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

As of September 30, 2013, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Changes in Internal Control over Financial Reporting

During the quarterly period ended September 30, 2013, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no outstanding legal proceedings material to the Company to which the Company or any of its assets are subject, nor are there any such proceedings known to be contemplated. Management believes that the resolution of all business matters which would have a material impact on the Company’s financial position or operating results have been recorded.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this quarterly report, you should carefully consider the risks discussed in our 2012 Annual Report on Form 10-K including the Risk Factors set forth in Part I of our Annual Report, which risks could materially affect our business, financial condition or future results. There have been no material changes to the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2012. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

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

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. [REMOVED AND RESERVED]

N/A

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit No.		Description of Exhibit

3.1		Amended and Restated Certificate of Incorporation of the Company (1)
3.2		Bylaws of the Company (1)
10.1		10% Subordinated Note Due March 30, 2009 (4)
10.2		10% Subordinated Note Due June 6, 2009 (4)
10.3		10% Subordinated Note Due March 30, 2009 (5)
10.4		10% Subordinated Note Due June 6, 2009 (5)
10.5		Joint Venture Agreement (6)
10.6		Sale and Assignment of Rights Under Joint Venture Agreement (6)
10.7		Profit Participation Agreement dated January 29, 2011 with Integrated Smart Solutions, Inc. (3)
10.8		Joint Venture Agreement dated January 30, 2011 with Rare Earth Exporters of Mongolia Pte. Ltd. (3)
10.9		Sale and Assignment of Rights Under Joint Venture Agreement dated November 8, 2010 (3)
14		Code of Ethics (2)
31.1		Section 302 Certification (7)
32.1		Section 906 Certification (7)
101		XBRL Interactive Data (7)

	(1)	Incorporated by reference from the Form SB-2 filed on September 15, 2006.
	(2)	Incorporated by reference from the Form 10-K for the Annual Period Ended December 31, 2009.
	(3)	Incorporated by reference from the Form 10-K for the Annual Period Ended December 31, 2010.
	(4)	Incorporated by reference from the 10-QSB for the Six Month Period Ended June 30, 2006.
	(5)	Incorporated by reference from the 10-KSB for the Fiscal Year Ended December 31, 2006.
	(6)	Incorporated by reference from the 8-K filed on December 13, 2010.
	(7)	Filed or furnished herewith.

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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 thereunto duly authorized.

	Green Technology Solutions, Inc.

	/s/ Paul Watson
Date: November 19, 2013	Paul Watson
	Chief Executive Officer
	(Principal Executive, Financial and Accounting Officer)

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