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EX-99.2 - FINANCIAL STATEMENTS FOR THE QUARTER ENDING JUNE 30, 2009 - Green Energy Live Incf8k072409a2ex99ii_grnenergy.htm
8-K/A - AMENDMENT NO. 2 TO FORM 8-K - Green Energy Live Incf8k072409a2_grnenergy.htm
 
Exhibit 99.1
 
 
COMANCHE LIVESTOCK EXCHANGE, LLC

COMANCHE, TEXAS



FINANCIAL STATEMENTS



FOR THE YEARS ENDED
DECEMBER 31, 2008 AND 2007
 
 
 

 



 


 
 
 
 

 
COMANCHE LIVESTOCK EXCHANGE, LLC

TABLE OF CONTENTS

 
PAGE
   
Independent Auditors’ Report
1
   
Financial Statements for the Year Ended December 31, 2008 and 2007
 
   
    Balance Sheets
2
   
    Statements of Income and Member’s Equity
3
   
    Statements of Cash Flows
4
   
    Notes to Financial Statements
5-7
   


 
 
 


 


INDEPENDENT AUDITORS’ REPORT




Shareholder
Comanche Livestock Exchange, LLC
Comanche, Texas


We have audited the accompanying balance sheets of Comanche Livestock Exchange, LLC as of December 31, 2008 and 2007, and the related statements of income and member’s equity, and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Comanche Livestock Exchange, LLC as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.


/s/ Rehmann Robson P.C.
Rehmann Robson P.C.
 
Grand Rapids, Michigan
September 29, 2009



1

 
COMANCHE LIVESTOCK EXCHANGE, LLC
 
   
BALANCE SHEETS
 
             
             
   
December 31
 
             
   
2008
   
2007
 
Current assets
           
Cash and cash equivalents
  $ 145     $ 3,683  
                 
Net property and equipment
    309,692       298,666  
Member advances receivable
    43,963       20,652  
Deferred closing costs (net of amortization of $502 in 2008 and
               
$185 in 2007)
    4,247       4,564  
Goodwill
    90,129       90,129  
                 
Total assets
  $ 448,176     $ 417,694  
                 
LIABILITIES AND MEMBER'S EQUITY
               
Current liabilities
               
Accounts payable
  $ 28,917     $ 47,412  
Current portion of long-term debt
    17,567       15,479  
Auction proceeds payable
    44,032       21,047  
Member note payable
    18,069       -  
Accrued expenses
    1,579       -  
                 
Total current liabilities
    110,164       83,938  
                 
Long-term debt, net of current portion
    312,738       331,093  
                 
Total liabilities
    422,902       415,031  
                 
Commitments and contingencies (Notes 4 and 6)
               
                 
Member's equity
    25,274       2,663  
                 
Total liabilities and member's equity
  $ 448,176     $ 417,694  
                 
 
 
The accompanying notes are an integral part of these financial statements.
2

 
COMANCHE LIVESTOCK EXCHANGE, LLC
 
             
STATEMENTS OF INCOME AND MEMBER'S EQUITY
 
             
             
   
Year Ended December 31
 
   
2008
   
2007
 
             
Revenues
  $ 644,146     $ 717,443  
                 
Cost of revenues
    101,364       243,485  
                 
Gross profit
    542,782       473,958  
                 
General and administrative expenses
    422,119       437,339  
                 
Operating income
    120,663       36,619  
                 
Other expense (income)
               
Interest income
    -       (562 )
Interest expense
    22,662       28,181  
                 
Other expense, net
    22,662       27,619  
                 
Net income
    98,001       9,000  
                 
Member's equity, beginning of year
    2,663       55,993  
                 
Member distributions, net
    (75,390 )     (62,330 )
                 
Member's equity, end of year
  $ 25,274     $ 2,663  
 
 
The accompanying notes are an integral part of these financial statements.
3

 
COMANCHE LIVESTOCK EXCHANGE, LLC
 
             
STATEMENTS OF CASH FLOWS
 
             
             
   
Year Ended December 31
 
   
2008
   
2007
 
Cash flows from operating activities
           
Net income
  $ 98,001     $ 9,000  
Adjustments to reconcile net income to net cash
               
provided by (used in) operating activities
               
Depreciation
    18,182       15,495  
Changes in operating assets and liabilities
               
which provided (used) cash
               
Deferred closing costs
    317       -  
Other assets
    -       6,878  
Accounts payable
    (18,495 )     35,926  
Auction proceeds payable
    22,985       (146,874 )
Accrued expenses
    1,579       (2,521 )
                 
Net cash provided by (used in) operating activities
    122,569       (82,096 )
                 
Cash flows from investing activities
               
Purchases of property and equipment
    (29,208 )     (1,395 )
Member receivable (advances) collections, net
    (23,311 )     52,441  
                 
Net cash (used in) provided by investing activities
    (52,519 )     51,046  
                 
Cash flows from financing activities
               
Repayments of long-term debt
    (16,267 )     (27,518 )
Proceeds from issuance of notes payable
    -       79,913  
Member note payable, net
    18,069       -  
Member distributions, net
    (75,390 )     (62,330 )
                 
Net cash used in financing activities
    (73,588 )     (9,935 )
                 
Net decrease in cash and cash equivalents
    (3,538 )     (40,985 )
                 
Cash and cash equivalents, beginning of year
    3,683       44,668  
                 
Cash and cash equivalents, end of year
  $ 145     $ 3,683  
 
The accompanying notes are an integral part of these financial statements.
4

 
COMANCHE LIVESTOCK EXCHANGE, LLC

NOTES TO FINANCIAL STATEMENTS
 

 

1.    BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Comanche Livestock Exchange, LLC (the “Company”), a Texas corporation, primarily generates revenues from commission based livestock marketing sales.  The Company provides the location and personnel for the sale of cattle on the behalf of others and receives a commission from these services.  The Company also provides feed and cattle services.

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the year.  Actual results could differ from those estimates. Significant estimates include, but are not limited to, carrying values and recovery of intangible assets.

Revenue Recognition

Revenue is generally recognized at the time of marketing sales or performance of services. The Company records commission revenue upon the consummation of sale at the weekly auctions.  Funds are collected and remitted to sellers upon receipt of cash.  The sales and collection cycle is typically completed within one week of auction. Revenue from the sale of feed is recorded at the time of sale.  Fees for services are recorded when performed.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits in banks.  In the normal course of business, the Company may, at times, maintain deposits that exceed federally insured limits.  Management does not consider uninsured cash to be a significant risk.

Member Advances Receivable

The Company has advanced monies to its sole member.  The advances are non-interest bearing and due on demand.  The amount has been classified as non-current as settlement is not expected to occur within one year.

Property and Equipment and Depreciation

Property and equipment are stated at cost. Major improvements and renewals are capitalized, while ordinary repairs and maintenance are expensed. Management annually reviews these assets to determine whether carrying values have been impaired. Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets, which range from 5 to 35 years.
 
 
5

 
COMANCHE LIVESTOCK EXCHANGE, LLC

NOTES TO FINANCIAL STATEMENTS
 


Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets of the Comanche Livestock Exchange, LLC when acquired by the current owner.  The Company evaluates goodwill for impairment on an annual basis.

Auction Proceeds Payable

The Company facilitates the weekly auctions for the sale of livestock on behalf of other sellers.  Auction proceeds received by the Company are held in a separate custodial account in the name of the Company.  Proceeds are then paid to the sellers from this account, net of the Company’s commission.  Auction Proceeds Payable represents amounts owed to the sellers from previous sales.

Advertising and Marketing

The costs of advertising and marketing costs are expensed as incurred.  The Company incurred $70,525 and $84,585 in advertising and marketing costs during 2008 and 2007, respectively.

Income Taxes

Income from the Company is combined with the income and expense of the member from other sources and reported in the member’s individual federal and state tax returns.  The Company is not a tax paying entity for the purposes of federal income taxes and, therefore, no income taxes have been recorded within these financial statements.

2.    PROPERTY AND EQUIPMENT

Property and equipment and accumulated depreciation consist of the following amounts as of December 31:
 
   
2008
   
2007
 
             
Equipment
  $ 60,281     $ 60,281  
Office equipment and furniture
    8,158       4,318  
Software
    25,368       -  
Land
    28,066       28,066  
Building
    249,456       249,456  
Total property and equipment
    371,329       342,121  
Less accumulated depreciation
    61,637       43,455  
                 
Net property and equipment
  $ 309,692     $ 298,666  
 
Depreciation expense was $18,182 and $15,495 in 2008 and 2007, respectively.
 
 
6

 
COMANCHE LIVESTOCK EXCHANGE, LLC

NOTES TO FINANCIAL STATEMENTS
 


 
3.    DEBT

Long-term debt consists of a note payable to a bank, collateralized by real estate.  The note is payable over 180 months through May 25, 2022.  Monthly payments are $3,493, or more, including interest charged at a rate of prime plus 0.25% (effective rate of 3.50% as of December 31, 2008).  The note includes a guarantee by the sole member.

Scheduled principal payments on long-term debt for each of the five years following 2008 and thereafter are summarized as follows:
 
Year
 
Amount
 
       
2009
  $ 17,567  
2010
    18,512  
2011
    19,507  
2012
    20,557  
2013
    21,662  
Thereafter
    232,286  
         
Total minimum payment due
  $ 330,091  
         

 
4.    RELATED PARTY TRANSACTIONS

The Company utilizes certain equipment owned by other companies, related through common ownership.  Rent, in the form of debt payments on behalf of the sole member, is paid for use of certain equipment, while other equipment is used without charge.  Rent expense recorded by the Company amounted to $1,800 for both 2008 and 2007.  The value of the rent free equipment has not been determined.

Additionally, the Company has a note with its sole member related to the acquisition of certain fixed assets with an original balance of $25,368.  The note is interest free and payment is due monthly, until 2011.  The note is expected to be repaid upon the sale of the Company and is therefore classified as current.

5.    SUPPLEMENTAL CASH FLOWS INFORMATION

During 2008, the Company financed the purchase of software through a note payable to the member in the amount of $25,368.

Cash paid for interest amounted to $21,506 and $28,181 during 2008 and 2007, respectively.

6.    SUBSEQUENT EVENT

Effective July 30, 2009, the Company’s sole shareholder entered into a definitive agreement with Green Energy Live, Inc. for the sale of 100% of the outstanding shares of common stock to Green Energy Live, Inc.



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