PINX:EWRL Green Energy Renewable Solutions Inc Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

PINX:EWRL Fair Value Estimate
Premium
PINX:EWRL Consider Buying
Premium
PINX:EWRL Consider Selling
Premium
PINX:EWRL Fair Value Uncertainty
Premium
PINX:EWRL Economic Moat
Premium
PINX:EWRL Stewardship
Premium
 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

Commission file number :  000-52438

  

GREEN ENERGY RENEWABLE SOLUTIONS, INC.
(Exact name of small business issuer as specified in its charter)

 

Florida   65-0855736
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)

  

2029 Paradise Road
Las Vegas, Nevada, 89104
(Address of principal executive offices)
 
702 - 331 - 8427
(Issuer's telephone number)
 
 
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ 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). x Yes ¨ 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 x 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

 

The number of shares outstanding of each of the issuer's classes of common equity as of May 02, 2012: 31,237,800

 

 
 

  

Contents

Part 1 Financial Information   3
Item 1. Financial Statements   3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations   12
Item 3. Quantitative and Qualitative Disclosures about Market Risk   14
Item 4. Controls and Procedures   14
Part II.  OTHER INFORMATION   15
Item 1. Legal Proceedings   15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   15
Item 3. Defaults upon Senior Securities   15
Item 4. Submission of matters to a Vote of Security Holders   15
Item 5. Other Information   15
Item 6. Exhibits   16
SIGNATURES   17

  

2
 

  

Part 1 Financial Information

 

Item 1 Financial Statements

 

 

Green Energy Renewable Solutions, Inc.

(A Development Stage Company)

Consolidated Balance Sheets

(Unaudited)

 

   March 31,   December 31, 
   2012   2011 
         
Assets:          
Current assets:          
Cash  $50   $316 
Accounts receivable   166    166 
Other current assets       5,000 
Prepaid expenses   16,667     
Total current assets   16,883    5,482 
           
Land   27,752    27,752 
Lease deposits       900 
           
Total Assets  $44,635   $34,134 
           
Liabilities and Stockholders' Deficit:          
Current liabilities:          
Accounts and other payables  $180,121   $145,137 
Accounts payable - related party   110,100    227,123 
Due to related party   175,638    151,392 
Secured note - related party   65,000     
Convertible note - related party       150,000 
Total current liabilities   530,859    673,652 
           
Total Liabilities   530,859    673,652 
           
Stockholders' Deficit          
Preferred stock, no par value 5,000,000 shares          
authorized and no shares issued.        
Common stock, par value $0.001, 150,000,000 shares          
authorized and 18,037,800 and 9,252,526 shares outstanding          
at March 31, 2012 and December 31, 2011, respectively   18,038    9,252 
Additional paid-in capital   5,723,271    4,356,028 
Accumulated deficit   (4,514,336)   (4,514,336)
Accumulated deficit during development stage   (1,713,197)   (490,462)
Total Stockholder’s Deficit   (486,224)   (639,518)
           
Total Liabilities and Stockholder’s Deficit  $44,635   $34,134 

 

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

 

3
 

 

Green Energy Renewable Solution, Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)

 

       Development 
       Stage 
   3 Months Ended March 31,   (April 1, 2010) - 
   2012   2011   March 31,  2012 
Sales  $12   $   $219 
Cost of sales            
Gross profit    12         219 
                
Bank service charges   683    21    3,067 
Office rental       450    5,875 
New zoo revue   257    922    17,811 
Development projects           14,125 
Office and related expense   (150)   11    5,148 
Waste project expense   63,568        102,411 
Professional fees   82,107    54,026    449,863 
Investor relations   19,000    1,000    20,000 
Financing cost   365,582        365,582 
Travel expense           15,272 
Impairment of intangible assets and license fees   690,700        691,149 
Total operating expense   1,221,747    56,430    1,690,303 
Operating loss   (1,221,735)   (56,430)  (1,690,084)
Foreign exchange translation loss           (1,113)
Interest expense   (1,000)   (3,000)   (22,000)
Net loss  $(1,222,735)  $(59,430)  $(1,713,197)
                
Net loss per share  $(0.10)  $(0.01)     
                
Weighted average shares outstanding   12,238,466    8,652,499      

 

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

 

4
 

 

Green Energy Renewable Solutions, Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

 

           Development 
           Stage from 
   3 Months Ended March 31,   (April 1, 2010) to 
   2012   2011   March  31, 2012 
Operating Activities:               
Cash flows from operating activities               
Net loss  $(1,222,735)  $(59,430)  $(1,713,197)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:               
Issuance of common stock for services   65,718        65,868 
Issuance of subsidiary common stock for services prior to acquisition           50 
Issuance of common stock for asset purchase   690,700        690,700 
Issuance of common stock for finance costs   365,582        365,582 
Loss on foreign currency translations           1,113 
Lease deposits           (900)
Changes in operating assets and liabilities:              
Accounts receivable           (166)
Prepaid expenses   (16,667)       (16,667)
Accounts and other payables   32,196    3,786    38,428 
Due to shareholders and related parties   55,000    56,637    291,222 
Cash provided by (used in) operating activities   (30,206)   993    (277,967)
Investing Activities:               
Notes receivable           (5,000)
Issuance of subsidiary stock for cash prior to acquisition           950 
Purchase of land           (27,752)
Cash used in investing activities           (31,802)
Financing Activities:               
Advances from related party   29,940        159,742 
Issuance of subsidiary stock for cash           150,000 
Cash provided by investing activities   29,940        309,742 
                
Increase(Decrease) in Cash   (266)   993    (27)
                
Cash, beginning of period   316    721    77 
Cash, end of period  $50   $1,714   $50 
                
Supplemental disclosure of non-cash investing and financing activities:               
Shares issued for intangible assets  $690,700   $   $690,700 
Spinoff of subsidiary  $254,028   $   $254,028 
Deemed distribution to majority shareholder  $   $   $150,000 

 

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

 

5
 

  

Green Energy Renewable Solutions, Inc.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Unaudited)

 

Note 1 – Basis of Presentation

 

The unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation. All such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year. The interim financial statements should be read in conjunction with the financial statements and footnotes thereto included in our annual report on Form 10-K for the year ended December 31, 2011.

 

The consolidated interim financial statements include our wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated.

 

On April 1, 2010, the Company entered into development stage accumulating a net loss of $1,713,197 from April 1, 2010 to March 31, 2012.

 

Note 2 – Going Concern

 

The accompanying consolidated interim financial statements have been prepared assuming that we will continue as a going concern. The Company has incurred a total accumulated deficit of $4,514,336 at March 31, 2012 and an accumulated deficit of $1,713,197 during development stage period from April 1, 2010 to March 31, 2012. Our ability to continue as a going concern is dependent upon the Company implementing its business plans resulting in profitable operations. The consolidated interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should we be unable to continue in existence. The Company also intends to position itself so that it may be able to raise additional funds through the capital markets and to raise additional borrowings. However, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

Note 3 – Summary of Significant Accounting Policies

 

a)Basis of Presentation

The accompanying consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

 

b)Basis of Consolidation

The consolidated financial statements include the accounts of Green Energy Renewable Solutions and its wholly owned subsidiaries.

 

On May 24, 2010, the Company acquired 100% of the outstanding stock of Media and Technology Solutions, Inc. On the date of acquisition, Media and Technology was 95% owned by Blue Atelier, Inc., the majority shareholder of Green Energy Renewable Solutions, Inc. and the acquisition was accounted by means of a pooling of the entities from the date of inception of Media and Technology on February 1, 2010 because the entities were under common control.

 

On July 27, 2011, the Company incorporated a new wholly owned subsidiary, E World Corp. and by way of an assignment agreement between E World Corp. and Green Energy Renewable Solutions, a number of agreements, letters of intent and various rights and any obligation relating to these rights held by Green Energy Renewable Solutions, Inc. were assigned to and accepted by E World Corp. Inc. and Media and Technology Solutions, Inc. became a wholly owned subsidiary of E World Corp with the transfer of the stock held by Green Energy Renewable Solutions Inc. to E World Corp.

 

On February 1, 2012, E World Corp., along with its subsidiary was spun-out as a separate private company by way of share dividend and the financial statements include the operations of E World Corp and its subsidiaries up to that date.

 

All significant inter-company transactions and balances have been eliminated.

 

6
 

 

c)Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

d)Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents

 

e)Significant Risks and Uncertainties

The Company's management believes that changes in any of the following areas could have a material adverse effect on the Company's future financial position, results of operations or cash flows: the Company's limited operating history; the Company’s ability to generate profits and cash flow; advances and trends in new technologies and industry standards; competition from other competitors; regulatory or related factors; risks associated with the Company's ability to attract and retain employees necessary to support its growth; and risks associated with the Company's growth strategies and the risks associated with the Company’s ability to raise finance on satisfactory terms to implement its business plan.

 

f)Basic and Diluted Net Earnings (Loss) Per Share

The Company computes net income (loss) per share in accordance with ASC 260-10, which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive and is not presented in the accompanying statements.

 

g)Fair Value of Financial Instruments

The carrying value of the Company’s financial instruments, including cash, due to shareholders/related parties and accounts and other payables approximate their fair values due to the immediate or short-term maturity of these instruments. It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments.

 

h)Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash. The Company places its cash with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management also routinely assesses the financial strength and credit worthiness of any parties to which it extends funds and as such, it believes that any associated credit risk exposures are limited.

 

i)Recent Accounting Pronouncements

The Company has evaluated recent pronouncements through Accounting Standards Updates “ASU” 2011-12 and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows.

 

j)Revenue Recognition

The Company recognizes revenues and the related costs when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Amounts invoiced or collected in advance of product delivery or providing services are recorded as deferred revenue. The Company accrues for warranty costs, sales returns, bad debts, and other allowances based on its historical experience.

 

7
 

 

Note 4 – Related Party Transactions

 

The Company records transactions of commercial substance with related parties at amounts agreed to between the related parties and management, which are meant to approximate fair value. Amounts due to shareholders/related parties are non-interest bearing, unsecured, and due upon demand.

 

The following is a list of related party balances as of March 31, 2012 and December 31, 2010:

 

   March 31, 2012   December 31, 2011 
Due to related party  $175,639   $151,392 
Accounts payable - related party  $110,100   $227,123 
Convertible note - related party (Blue Atelier Inc.)  $   $150,000 
Secured note – related party (E World Corp.)  $65,000   $ 

 

Amounts due to related party include advances from E World Corp during the period from January 1, 2012 through March 31, 2012 of $28,966. These amounts are unsecured, non-interest bearing and repayable on demand.

 

Other related party transactions during the period include consultancy fee charges for the three month period ending March 31, 2012 and for the Development Stage from April 1, 2010 to March 31, 2012:

 

   Three months ended March 31,   Development Stage 
   2012   2011     
             
Joe Durant:               
CEO, Director, Green Energy Renewable               
Solutions, Inc.  $22,500   $   $45,000 
                
Gerry Shirren:               
CFO, Director, Green Energy Renewable               
Solutions Inc.  $15,000   $15,000   $120,000 
                
Frank O Donnell:               
Exec.VP Business Development, Green Energy               
Renewable Solutions               
Director,  $22,500   $30,000   $165,000 

 

Note 5 Spin-out of E World Corp and Share Dividend

 

By way of an assignment agreement between E World Corp and Green Energy Renewable Solutions, a number of agreements, letters of intent and various rights and any obligations relating to these rights held by Green Energy Renewable Solutions, Inc. were assigned to and accepted by E World Corp. In addition, Media and Technology Solutions, Inc. became a wholly owned subsidiary of E World Corp with the transfer of the stock held by Green Energy Renewable Solutions Inc. to E World Corp. In an additional agreement between Green Energy Renewable Solutions, Inc. and E World Corp, E World Corp. assumed all the liability held by Green Energy Renewable Solutions, Inc. to various related parties and shareholders in return for full payment and a balancing payable amount due to E World Corp which will remain between the companies as an unsecured debt without interest.

 

These transactions were to facilitate the agreement entered into between Green Energy Renewable Solutions, Inc. and Green Renewable Energy Solutions, Inc. on August, 27, 2011 which was subsequently cancelled and replaced by a new agreement on September 17, 2011 (see Note 6).

 

E World Corp completed a forward split of its common stock of 15 to 1 following which, E World Corp had 9,252,526 shares outstanding, the same amount of stock outstanding of Green Energy Renewable Solutions, Inc. on January 31, 2012 to allow for the share dividend of one share in E World Corp for every Green Energy Renewable Solutions share held on that date.

 

Effective January 31, 2012, the spin-out of E World Corp was completed with the share distribution of 9,252,526 shares of E World Corp common stock. The new effect on the Green Energy Renewable Solutions Balance sheet is set out below and the book value of E World Corp net assets on the date of the spin-out of was $(254,028).

 

As the net book value of the E World Corp net assets was negative, the impact on the Green Energy Renewable Solutions Balance Sheet was in increase in Additional Paid-In Capital of $254,028.

 

8
 

 

The accounting basis for the transaction is based on accounting for entities under common control.

 

E World Corp    
Schedule of Assets and Liabilities Spun Out  Total 
Bank   (235)
Other Receivable   5,000 
Related Party Receivable: Green Energy Renewable Solutions Inc.   236,553 
Accounts Payable   (10,783)
Due to related party Blue Atelier   (182,770)
Due to related party Media and Technology Solutions,   (1,761)
Due to related party Payable Frank O Donnell   (149,008)
Due to related party Payable Gerry Shirren   (1,025)
Notes Payable Related Party Blue Atelier   (150,000)
Net Value of Assets Spun-Out  $(254,028)

 

The Consolidated Statement of Operations for the three months ended March 31, 2012 includes E World Corp and its subsidiaries for the period to January 31, 2012. The Consolidated Statement of Operations includes the following relating to E World Corp:

 

E World Corp  Period to January 31, 
Statement of Operations  2012 
Sales   12.35 
Gross Profit  $12.35 
Bank Service Charges   39.00 
New Zoo - Master Storage Costs   257.20 
Total Operating Expense   296.20 
Operating Loss   (283.85)
Interest Charges   (1,000.00)
Net Loss  $1,283.85 

 

On March 31, 2012 amounts owned by the Company to E World Corp totaled $240,639.

 

Note 6 – Asset Purchase Agreement with Green Renewable Energy Solutions

 

On September 17, 2011, Green Energy Renewable Solutions, Inc. (“the “Company”) entered into a  letter of intent (the “LOI”) with Green Renewable Energy Solutions, Inc. (“GRES”) the purpose of which was to cancel the Binding Letter of Intent entered into between the Parties on July 27, 2011 and to replace this with a new agreement. The effect of the Letter of Intent was completed with the execution of the Asset Purchase Agreement executed on February 04, 2012 following the completion on the reverse split and spin out set out in the Letter of Intent.

The Letter of Intent agreement is summarized below:

 

i.The Company will acquire the assets of GRES including contracts entered into by GRES with regard to the acceptance, processing and disposal of construction and demolition waste dated May 19, 2011 and Municipal Solid Waste agreement dated September 07, 2011 and other agreements relating to the financing of energy and waste disposal projects.

 

9
 

 

ii.The Company will change its name immediately to Green Energy Renewable Solutions Inc.

 

iii.The consideration for the acquisition of GRES will be the issue of new common stock of the Company such that on completion of the issue, the existing shareholders of both the Company and GRES will own the Company in equal amount.

 

iv.The board of the Company will change with immediate effect to reflect this 50/50 ownership and Joe DuRant will be appointed as Chief Executive Officer of the Company.

 

v.Prior to the completion of the transaction and the issue of the Company’s stock consideration, the Company will spin out its wholly owned subsidiaries, Media and Technology Solutions, Inc. and E World Corp as independent public companies. E World Corp will retain the ownership of the E World name, websites and all existing agreements, licenses and projects in development other than the project being developed by GRES.

 

vi.On February 04, 2012 the Company executed the Asset Purchase Agreement and completed the purchase of the assets of Green Renewable Energy Solutions, Inc., namely the contracts and agreements referred to in (i) above, for 4,604,667 common shares of Green Energy Renewable Solutions, Inc. and a further 2,302,333 common shares of deferred consideration.

 

In a clarification and amendment to the LOI dated September 17, 2011 and the Green Renewable Energy Solutions, Inc. Asset Purchase Agreement, the Parties agreed the following:

1.Capital Structure:

That the capital structure on a 50/50 basis will be based on the ownership of Blue Atelier as the company controlling shareholder and exclude the non-related parties shareholding and the public float.

2.Temporary adjustment to the Capital Structure:

In recognition of the fact that E World Corp has provided and continues to provide funding to cover a number of expenses relating to the operation of the company and that Green Renewable Energy Solutions Inc. has not contributed proportionately to these expenses a temporary adjustment will be made to the 50/50 capital structure outlined above. The Parties agree that until amount funded for expense items is repaid in full to E World Corp and /or Blue Atelier as the provider of these funds and the new company operation achieves the “pro forma‟ projections, the Capital Structure will be on a 60/40 basis with the E World controlling shareholders and not the 50/50 as set out in 1 above. The adjustment in the capital structure outlined above resulted in the deferred consideration of 2,303,333 shares.

 

Asset Purchase Agreement: The Asset Purchase Agreement was completed on February 04, 2012 and the assets purchased consisted principally of certain contracts for the supply of waste and waste technology support and the consideration in respect of the asset purchase was the share issue set out below:

 

1.Consideration: The purchase consideration was as follows
   
(i)Four million, six hundred and four thousand, six hundred and sixty seven shares (4,604,667) of Green Energy Renewable Energy common stock and
(ii)A further two million, three hundred and two thousand, three hundred and thirty three shares (2,302,333) of deferred consideration (the “Further Deferred Consideration”) which is payable when amounts advances for expense items is repaid in full to E World Corp and or Blue Atelier as the provider of these funds and the new company operation achieves the Year 1 “pro forma‟ projections, as set out in the Clarification of the Letter of Intent dated October 26, 2011,

 

2.The assets purchased consisted of a number of contacts as follows:
   
(i)Green Renewable Energy Solutions Inc. and Disposal Specialities LLC dated May 19, 2011 for the Acceptance, Processing and Disposal of Construction Waste
(ii)Green Renewable Energy Solutions Inc. and Disposal Specialities LLC dated September 07, 2011 for the Acceptance, Processing and Disposal of Construction Waste
(iii)Agreement to Co-operate between Green Renewable Energy Solutions Inc. and Foton Technologies LLC dated March 21, 2011

 

As of March 31, 2012, the proposed funding of the Highland Park waste conversion and recycling project is in progress and as the outcome of this is uncertain at this time, the value attributed to the intangible assets acquired has been fully impaired with a charge of $690,700 in the period ended March 31, 2012.

 

10
 

 

Note 7 – Operating Lease Commitments

 

The Company terminated its lease of office space on a month to month basis at 1001 Convention Center Drive, Las Vegas, 89109 on January 31, 2012 and its current offices at 2029 Paradise Road, Las Vegas 89104 are made available to the Company on a month to month basis without charge from parties related to Blue Atelier Inc., the Company’s largest shareholder.

 

The Company has agreed to purchase real estate at Highland Park, Michigan, 48203 and pending closure of the purchase, the company executed a lease agreement on November 11, 2011 to the real estate on a month to month basis, for a period not to exceed 6 months, at $5,000 per month with purchase price of the real estate to be reduced by 50% of the lease payments made. The lease payments are expensed in the period incurred as it remains uncertain if the Company will be able to complete the purchase within the 6 month period.

 

Note 8 – Stockholders Equity

 

As of March 31, 2012, the Company had 150,000,000 shares of common stock authorized at a par value of $0.001.

 

On January 26, 2012, FINRA approved the 5 to 1 reverse stock split of its issued and outstanding common stock. The stock split has been retroactively applied to these financial statements resulting in a decrease in the number of shares of common stock outstanding with a corresponding increase in additional paid-in capital. All shares amounts have been retroactively restated to reflect this reverse stock split.

 

As of March 31, 2012 and December 31, 2011, the Company had 18,037,800 and 9,252,526 shares of common stock outstanding respectively.

 

Stock issued during the period to March 31, 2012 is valued at the market price on the date the issue was approved by the Board of the Company and the stock issued and value on the date approved by the Board was as follows:

 

Stock Issues January 1, 2012  Shares        
to March 31, 2012  Issued   Description  Issue Value $ 
Kandico Enterprises   7,000   Real Estate Consultancy Services  $1,050 
Kenneth Daniels   66,667   Waste Project Planning Consultancy Services  $10,000 
Green Renewable Energy Solutions, Inc.   4,604,667   Asset Purchase Agreement  $690,700 
E World Corp   692,858   Finance charge under Note Payable  $69,286 
Blue Future Inc.   120,000   Investor Relations Services  $18,000 
Joe Dubose   71,120   Security Consultancy Services  $10,668 
Darrin Ocasio   60,000   Legal Services  $6,000 
Moody Capital Partners   200,000   Investment Banking Services  $20,000 
E World Corp   2,962,962   Stock Issue under Note Payable  $296,296 
Total   8,785,274      $1,122,000 

 

Note 9 - Subsequent Events

 

On April 03, 2012, the Company assigned and subsequently converted a number of contract debts totaling $126,778 of amounts outstanding since 2009. On April 19, 2012, the debts were converted to 6,500,000 shares of common stock.

 

On April 17, 2012, the Board approved the issue of common stock as a bonus incentive to company management with the issue of 2,600,000 shares of common stock to each of CEO Joe DuRant and Executive Vice President Business Development Frank O Donnell and 1,300,000 m shares of common stock to CFO Gerry Shirren and 100,000 shares to each of Frank Doherty and Guy Peckham under consultancy agreements.

 

11
 

 

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

 

This statement may include projections of future results and “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933 as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 as amended (the “Exchange Act”). All statements that are included in this Quarterly Report, other than statements of historical fact, are forward looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.

 

There may be other risks and circumstances that management may be unable to predict.  When used in this Quarterly Report, words such as,  "believes,"  "expects," "intends,"  "plans,"  "anticipates,"  "estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.

 

INTRODUCTION AND COMPANY UPDATE

 

INTRODUCTION

 

Green Energy Renewable Solutions, Inc. (OTC QB: EWRL), a Florida corporation, is a publicly traded company. Its headquarters are located at 2029 Paradise Road, Nevada 89052.

 

On September 17, 2011 Green Energy Renewable Solutions entered into a letter of intent (the “LOI”) with Green Renewable Energy Solutions, Inc. (“GRES”) the purpose of which to acquire the assets of GRES which included certain contracts for the acceptance, processing and disposal of construction and demolition waste and as part of this agreement, the Company changed its name to Green Energy Renewable Solutions (“Green Energy Renewable Solutions” or “GERS”), effective December 12, 2011. As part of this LOI, on January 26, 2012 Green Energy Renewable Solutions completed a 5 to 1 reverse split, spun out its subsidiary company E World Corp and Media and Technology Solutions, Inc. and on February 04, 2012 completed the transaction with the issue of stock for the purchase of the assets of Green Renewable Energy Solutions, Inc.

 

Green Energy Renewable Solutions key area of business is focused on the development of construction and demolition waste business opportunity in Highland Park, Michigan and the further development of waste conversion and waste to energy opportunities related to the development in Highland Park and elsewhere.

 

PLAN OF OPERATION

 

Green Energy Renewable Solutions Inc. (Green Energy Renewable Solutions) The key area of Green Energy Renewable Solutions business is that of waste conversion and waste to energy, a dynamic area of growth potential in the market place with the emphasis on waste conversion using recycling and new technologies that are creating valuable assets and income streams from waste materials.

 

The waste conversion and recycling operations can achieve high levels of profitability with relatively low investment and there is an existing and growing demand for the services offered by Green Energy. The company seeks out opportunities where there is a short window to positive cash-flow and revenues and where the waste conversion project can be extended to waste to energy generation creating long-term high value assets.

 

The Green Energy business model is summarized as follows:

 

1.Secure existing large scale waste streams through acquisition of landfills, joint ventures and contracts with source generators (Acquired waste streams include both municipal solid waste (“MSW”) and construction & demolition debris (“C&D”)

 

2.Secure short term revenue and cash flow through landfill remediation plans, introduction of recycling strategies applicable to established waste streams

 

3.Introduction of Waste to Energy (“WTE”) technology to generate fuels and electricity for sale under long term contracts.

 

4.Joint venture and Investment in conversion technologies will offer additional revenue opportunities and will reduce internal capital costs and capture future revenue from external technology sales.

 

12
 

 

Strategies employed include acquisition of existing landfills to internalize control of contracted and historical waste streams. By developing remediation action plans and other strategies the company is seeking acquisition opportunities where operating efficiencies and diversion tactics will allow increased revenue and improved margins. Introduction of recycling for incoming materials can reduce the volume of incoming materials landfilled by over 50% and over 90% with introduction of WTE strategies. Metals, plastics, cardboard/paper and other recyclable materials represent significant potential revenue and the conversion of the remaining material to refuse derived fuel (RDF) for gasification to create fuels and electricity provide further revenue enhancements. The diversion of incoming waste can substantially increase the life of the landfill while maintaining tipping fee income. Increased WTE output can further allow for increased intake of MSW and C&D and corresponding tipping fee income with minimal landfill impact.

 

Green Energy Renewable Solutions operates in a low risk manner with limited financial exposure on its downside risk while maintaining major upside potential. Green Energy Renewable Solutions’ key expertise from its Board members, its management and its associates gives it a major advantage to successfully exploit this ‘green energy’ business focus and it has a pipeline of opportunities, some of which have rights to proprietary technologies.

 

The Company is headquartered in Las Vegas, Nevada and is currently developing construction and demolition waste and recycling operations in Highland Park, Michigan and other waste diversion and waste to energy projects.

 

Construction and Demolition Waste Diversion

 

The Green Energy Business Model is a rapid growth multi-stage model which can be replicated over and over again. The initial construction and demolition waste processing is located on a 15 acre site at Highland Park, Michigan where the company acquired a parcel of real estate at Lincoln Ave. Highland Park, MI in November 2011 and has an entered into an letter of intent to purchase a further parcel of real estate at Oakman Blvd. Highland Park MI which is it currently leasing. The Company is preparing the permit applications for its Highland Park C&D recycling operation and when permitted it will generate revenue from tipping fees and the sale of processed C&D recyclables; primarily metal, plastic, cardboard, asphalt, and wood. Ready markets exist for this sorted and processed waste material with metal waste achieving over $150 per ton. The company will process incoming unsorted C&D for recovery of valuable recycle materials, including metal, cardboard, paper, concrete, asphalt shingles and plastics. The recycling process is projected to increase the value of the waste by a factor of 4. Green Energy acquired contracts under LOI and asset purchase agreement with Green Renewable Energy Solutions, Inc. including a contract with Disposal Specialties, LLC (“Disposable Specialties”) for the supply of construction & demolition debris (C&D). Under the terms of the 20 year term C&D contract, Disposal Specialties will deliver up to 1000 tons of C&D per day to the Company’s Highland Park facility and the Company is guaranteed a minimum “tipping” fee of $10.00 per ton. Up to $3.5m will be required to complete the Highland Park C & D processing and recycling operation.

 

The eventual construction of an on-site waste-to-energy (WTE) processing plant will allow the Company use some of the C&D materials to produce electricity and sell it to local utilities and municipalities under power purchase agreements (PPAs). Additional revenue will come from the sale of synfuels and other diversified products generated from the WTE process. The WTE technology Green Energy will employ is efficient and clean providing renewable energy with a zero carbon emission impact. The recycling diversion programs from landfill not only provides reduced carbon impact by reusing valuable finite materials but also reduces landfill volume impact by 80+% for C & D and up to 50% for MSW. Further operations utilizing comparable recycling strategies where both C&D and Municipal Solid Waste (“MSW”) are diverted for recycling material recovery and RDF are planned for future growth.

 

RESULTS OF OPERATIONS

 

THREE MONTH PERIOD ENDED MARCH 31, 2012 COMPARED TO THREE MONTH PERIOD ENDED MARCH 31, 2011

 

Revenues for the three month period ended March 31, 2012 were $12 compared to $0 for the three month period ended March 31, 2011.

 

Total operating expense for the three month period ended March 31, 2012 increased by $1,165,317 from $56,430 for the three months ended March 31, 2011 to $1,221,747 for the same period in 2011. The increase was primarily due to an increase in professional fees and operational activity, financing costs and the impairment of intangible assets.

 

Interest expense for the three months ended March 31, 2012 reduced by $2,000 from $ 3,000 for the three months ended March 31, 2011 to $1,000 for the same period in 2011. The interest arose from an 8% convertible note held by Media & Technology, a subsidiary of E world Corp which was spun out as a separate company on February 04, 2012

 

Due to the factors described above, the Company's net loss increased by $1,163,305 from net loss of $59,430 for the three months ended March 31, 2011 to a net loss of $1,222,735 for the same period in 2012.

 

13
 

 

LIQUIDITY AND CAPITAL RESOURCES

 

The Company's consolidated interim financial statements have been prepared, assuming that the Company will continue as a going concern. The Company incurred a net loss of $1,222,735, used cash flow from operations of $30,206 for the three months ended March 31, 2012, had a working capital deficiency of $513,976, an accumulated deficit of $4,514,336 and an accumulated deficit of $1,713,197 during development stage for the period from April 1, 2010 to March 31, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

 

Cash totaled $50 on March 31, 2012 compared to $316 as of December 31, 2011.

 

During the three months ended March 31, 2012, net cash used by operating activities totaled $30,206, compared to net cash generated by operating activities of $993 for the comparable three month period in 2011. Net cash provided by investing activities for the three months ended March 31, 2012 totaled $0 compared to $0 for the comparable three month period in 2011. Net cash provided by financing activities for the three months ended March 31, 2012 totaled $29,940 compared to $0 for the comparable three month period in 2011.

 

The above cash flow activities yielded a net cash decrease of $266 during the three months ended March 31, 2012 compared to an increase of $993 during the comparable prior year period.

 

GOING CONCERN

 

The consolidated interim financial statements have been prepared assuming that we will continue as a going concern. The Company had minimal operating revenue and our ability to continue as a going concern is dependent upon the company implementing its business plans resulting in profitable operations. The consolidated interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should we be unable to continue in existence.

 

The Company also intends to position itself so that it may be able to raise additional funds through the capital markets and to raise additional borrowings. However, there are no assurances that the Company will be successful in this or any of its endeavours or become financially viable and continue as a going concern.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not Applicable

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2012. This evaluation was carried out under the supervision of the Company’s Principal Financial Officer, Gerry Shirren. Based upon that evaluation, the Principal Financial Officer concluded that, as of March 31, 2012, our disclosure controls and procedures were effective.

 

Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations, changes in stockholders’ deficit and cash flows for the periods presented.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Principal Financial Officer, to allow timely decisions regarding required disclosure. Such disclosure controls and procedures are limited in their effect by the limitation of the numbers of staff available to allow for the desirable level of division of responsibilities and oversight of the controls and procedures.

 

Inherent Limitations on the Effectiveness of Controls

 

A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

 

14
 

 

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

 

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

Changes in Internal Controls

 

Our management, with the participation of our Principal Financial Officer, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three month period ended March 31, 2012. Based on that evaluation, our Principal Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the three months ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

 

Part II. Other Information

 

Item 1. Legal Proceedings

 

None, for the three month period ending March 31, 2012.

 

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

 

The company issued 8,785,274 shares during the period for services and as consideration for the purchase of intangible assets. The issues were as follows:

 

Stock Issues January 1, 2012  Shares        
to March 31, 2012  Issued   Description  Issue Value $ 
Kandico Enterprises   7,000   Real Estate Consultancy Services  $1,050 
Kenneth Daniels   66,667   Waste Project Planning Consultancy Services  $10,000 
Green Renewable Energy Solutions, Inc.   4,604,667   Asset Purchase Agreement  $690,700 
E World Corp   692,858   Finance charge under Note Payable  $69,286 
Blue Future Inc.   120,000   Investor Relations Services  $18,000 
Joe Dubose   71,120   Security Consultancy Services  $10,668 
Darrin Ocasio   60,000   Legal Services  $6,000 
Moody Capital Partners   200,000   Investment Banking Services  $20,000 
E World Corp   2,962,962   Stock Issue under Note Payable  $296,296 
Total   8,785,274      $1,122,000 

 

Item 3. Defaults upon Senior Securities

 

None, for the three month period ending March 31, 2012.

 

Item 4. Submission of matters to a Vote of Security Holders

 

None, for the three month period ending March 31, 2012.

 

Item 5. Other Information

 

None

 

15
 

 

Item 6. Exhibits

 

Green Energy Renewable Solutions, Inc. includes by reference the following exhibits:

 

3.1     Articles of Incorporation, exhibit 3.1 filed with the registrant’s Registration Statement on Form SB-2, as amended; filed with the Securities and Exchange Commission on December 27, 2005
     
3.2     Amendment to Articles of Incorporation, exhibit 3.2 filed with the registrant’s Registration Statement on  Form SB-2, as amended; filed with the Securities and Exchange Commission on December 27, 2005
     
3.3     Amendment to Articles of Incorporation, exhibit 3.3 filed with the registrant’s Registration Statement on  Form SB-2, as amended; filed with the Securities and Exchange Commission on December 27, 2005.  
     
3.4     Bylaws, filed as exhibit 3.4 with the registrant’s Registration Statement on Form SB-2, amended; filed with the Securities and Exchange Commission on December 27, 2005.  
     
3.5     Amendment to Articles of Incorporation, filed as exhibit 3.5 with the registrant’s Registration Statement on Form 8-A; filed with the Securities and Exchange Commission on December 14, 2006.
     
3.6   Amendment to Articles of Incorporation , filed as Exhibit Bylaws, filed as exhibit 3.1 filed on Form 8-K, filed with the Securities and Exchange commission on August 24, 2009 .
     
3.7   Amendment to Articles of Incorporation , filed as Exhibit Bylaws, filed as exhibit 3.1 filed on Form 8-K, filed with the Securities and Exchange commission on April 5, 2011
     
3.8  

Amendment to Articles of Incorporation , filed as Exhibit Bylaws, filed as exhibit 3.1 filed on Form 8-K, filed with the Securities and Exchange commission on February 28, 2012

     
10.1   Stock  purchase agreement - Between Green Energy Renewable Solutions, Inc. and Blue Atelier, Inc. March 30, 2009 and filed as exhibit 10.1 with the registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on April 03, 2009
     
10.2   Purchase Agreement - between E Wold Interactive Inc. and the shareholders of Media and Technology Solutions, Inc. for the purchase of 100% of the outstanding stock of Media and Technology
     
10.3   Purchase Agreement - between Green Energy Renewable Solutions, Inc.  to acquire the assets of Green Renewable Energy Solutions Inc. and filed as exhibit 10.1 on Form 8K filed with the Securities and Exchange commission on February 28, 2012
     
31.1   Certification of Principal Executive Officer and Principal Financial Officer Rule 13a-14(a) or 15d-14(a).
     
32.1   Certifications of Principal Executive Officer and Principal Financial Officer (18 U.S.C. Section 1350)

 

16
 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Green Energy Renewable Solutions, Inc.
   
Date: May 18, 2012 By: /s/ Joe DuRant, Chief Executive Officer
  Joe DuRant 
  Chief Executive Officer 
   
  By: /s/ Gerry Shirren, Chief Financial Officer
 

Gerry Shirren

Chief Financial Officer

 

17

 

PINX:EWRL Green Energy Renewable Solutions Inc Quarterly Report 10-Q Filling

Green Energy Renewable Solutions Inc PINX:EWRL Stock - Get Quarterly Report SEC Filing of Green Energy Renewable Solutions Inc PINX:EWRL stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

PINX:EWRL Green Energy Renewable Solutions Inc Quarterly Report 10-Q Filing - 3/31/2012
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Title |  Date |  Author |  Collection |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Title |  Date |  Company |  Symbol |  Interest |  Popularity

Previous: PINX:EWRL Green Energy Renewable Solutions Inc Insider Activity 3 Filing - 5/3/2012  |  Next: PINX:EWRL Green Energy Renewable Solutions Inc Quarterly Report 10-Q Filing - 6/30/2012