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EX-32.1 - CERTIFICATION - Todays Alternative Energy Corpv316120_ex32-1.htm
EX-10.1 - FORM OF CONVERTIBLE PROMISSORY NOTE - Todays Alternative Energy Corpv316120_ex10-1.htm
EX-31.1 - CERTIFICATION - Todays Alternative Energy Corpv316120_ex31-1.htm
EX-10.2 - EXHIBIT 10.2 - Todays Alternative Energy Corpv316120_ex10-2.htm

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 10-Q

(Mark One)

 

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

 

For the quarterly period ended April 30, 2012

 

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

  

For the transition period from _________________ to _________________

 

Commission File No.: 001-32044

 

TODAYS ALTERNATIVE ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada 16-1576984
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

191 Post Road West

Westport, Ct. 06880

(Address of principal executive offices)

 

Issuer’s telephone number:   (888) 880-0994

 

Check whether the registrant filed all documents and reports required to be filed by Section 12, 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 filter ¨   Accelerated filter ¨
     
Non-accelerated filter ¨ (Do not check if a smaller reporting company) Smaller reporting company x

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of June 19, 2012, there were 28,132,081 shares of our common stock issued and outstanding.

 

Transitional Small Business Disclosure Format:    Yes ¨       No x

 

 
 

 

Quarterly Report on Form 10-Q for the

 

Quarterly Period Ended April 30, 2012

 

Table of Contents

 

    Page
PART I. FINANCIAL INFORMATION   3
Item 1. Financial Statements   3
Condensed Consolidated Balance Sheets as of April 30, 2012 (unaudited) and October  31, 2011:   3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended April 30, 2012 and 2011 and for the Period From November 1, 2007 (inception of development stage) through April 30, 2012 (unaudited):   4
Condensed Consolidated Statement of Stockholders’ Deficit for the Period from October 31, 2007 to April 30, 2012 (unaudited):   5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended April 30, 2012 and 2011 and for the Period From November 1, 2007 (inception of development stage) through April 30, 2012 (unaudited):   6
Notes to Unaudited Condensed Consolidated Financial Statements April 30, 2012:   7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   13
Item 3. Quantitative and Qualitative Disclosures About Market Risk   18
Item 4.  Controls and Procedures   18
     
PART II. OTHER INFORMATION   18
Item 1. Legal Proceedings   18
Item 1A Risk Factor   19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   19
Item 3. Defaults upon Senior Securities   19
Item 4. Mine Safety Disclosures   19
Item 5. Other Information   19
Item 6. Exhibits   19
Signatures   20
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002    
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002    

 

2
 

 

PART 1:         FINANCIAL INFORMATION

 

ITEM 1 – FINANCIAL STATEMENTS

 

Todays Alternative Energy Corporation

 (A Development Stage Company)

Condensed Consolidated Balance Sheets

 

   April 30,   October 31, 
   2012   2011 
   (unaudited)     
Assets          
           
Current assets:          
Cash and cash equivalents  $1,007   $44,245 
Stock subscription receivable   -    50,000 
Total current assets   1,007    94,245 
           
Other assets:          
Security deposit   -    7,478 
Other deposit   -    41,522 
Total other assets   -    49,000 
           
Total assets  $1,007   $143,245 
           
Liabilities and Stockholders' Deficit          
           
Current liabilities:          
Accounts payable and accrued expenses  $1,259,682   $1,118,910 
Advances payable   -    111,000 
Convertible notes payable (net of debt discount of $36,854 and $0 as of April 30, 2012 and October 31, 2011, respectively)   1,491,691    1,429,965 
Total current liabilities   2,751,373    2,659,875 
           
Long term portion of convertible notes payable (net of debt discount of $85,266 and $61,765 as of April 30, 2012 and October 31, 2011, respectively)   5,734    38,130 
           
Stockholders' deficit:          
Preferred stock, $0.00001 par value, 10,000,000 shares authorized,10,000 shares of Series A issued and outstanding as of April 30, 2012 and October 31, 2011 and 69,000 shares of Series B issued and outstanding as of April 30, 2012 and October 31, 2011   1    1 
Common stock, $0.00001 par value, 1,000,000,000 shares authorized, 28,132,081 and 25,782,081 shares issued and outstanding as of April 30, 2012 and October 31, 2011, respectively   281    258 
Common stock to be issued   1    1 
Additional paid-in capital   8,106,934    8,014,642 
Deficit accumulated from November 1, 2007 (inception of development stage)   (3,354,996)   (3,061,341)
Accumulated deficit   (7,508,321)   (7,508,321)
Total stockholders' deficit   (2,756,100)   (2,554,760)
           
Total liabilities and stockholders' deficit  $1,007   $143,245 

 

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

 

3
 

 

Todays Alternative Energy Corporation

(A Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

 

   Three Months Ended   Six Months Ended   From Inception of
Development Stage
on November 1, 2007
 
   April 30,   April 30,   Through April 30, 
   2012   2011   2012   2011   2012 
                     
Expenses:                         
General and administrative expenses  $69,393   $123,146   $195,572   $245,308   $2,168,377 
Total expenses   69,393    123,146    195,572    245,308    2,168,377 
                          
Loss from operations   (69,393)   (123,146)   (195,572)   (245,308)   (2,168,377)
                          
Other expenses:                         
Beneficial conversion feature expense   (18,020)   (9,906)   (30,645)   (86,390)   (688,155)
Interest expense   (32,814)   (30,648)   (67,438)   (60,001)   (498,464)
Total other expenses   (50,834)   (40,554)   (98,083)   (146,391)   (1,186,619)
                          
Net loss before provision for income taxes   (120,227)   (163,700)   (293,655)   (391,699)   (3,354,996)
                          
Provision for income taxes   -    -    -    -    - 
Net loss  $(120,227)  $(163,700)  $(293,655)  $(391,699)  $(3,354,996)
                          
Net loss per weighted average share - basic and diluted  $(0.00)  $(0.06)  $(0.01)  $(0.16)     
Weighted average number of shares - basic and diluted   28,132,081    2,807,532    27,976,312    2,523,779      

 

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

 

4
 

 

Todays Alternative Energy Corporation

(A Development Stage Company)

Condensed Consolidated Statement of Stockholders’ Deficit

(Unaudited)

  

   Preferred Stock
Series A and B
   Common Stock                     
   Shares   Amount   Shares   Amount   Common
Stock to
be
Issued
   Additional
Paid in
Capital
   Deficit
Accumulated
During the
Development
Stage
   Accumulated
(Deficit)
   Total
Stockholders'
(Deficit)
 
                                     
Balance, October 31, 2007   -   $-    2,318   $-   $-   $5,866,870   $-   $(7,508,321)  $(1,641,451)
                                              
Debt converted for shares             800    -         106,560              106,560 
                                              
Series A and common shares issued for services   10,000    10    1,336    -         285,312              285,322 
                                              
Beneficial conversion feature                            (55,990)             (55,990)
                                              
Reclassification as a result of reincorporation        (10)                  10              - 
                                              
Net loss                                 (592,439)        (592,439)
                                              
Balance, October 31, 2008   10,000   $-    4,454   $-   $-   $6,202,762   $(592,439)  $(7,508,321)  $(1,897,998)
                                              
Shares issued in satisfaction of fraction shares resulting from 1-for-1,000 reverse stock split             101    -                        - 
                                              
Debt converted for shares             1,319,750    13         113,937              113,950 
                                              
Shares issued for services             6,555    -         66,818              66,818 
                                              
Series B shares issued for legal settlement   92,000    1                   91,999              92,000 
                                              
Beneficial conversion feature                            331,157              331,157 
Net loss                                 (927,207)   -    (927,207)
                                              
Balance, October 31, 2009   102.000   $1    1,330,860   $13   $-   $6,806,673   $(1,519,646)  $(7,508,321)  $(2,221,280)
                                              
Debt converted for shares             400,250    4         8,001              8,005 
                                              
Shares issued for services             385,455    4         134,996              135,000 
                                              
Conversion of Series B shares for common shares   (12,000)        51,989    1         (1)             - 
                                              
Beneficial conversion feature                            269,608              269,608 
                                              
Contributed services by former officers                            394,679              394,679 
                                              
Accrued expenses forgiven by former officer                            1,666              1,666 
                                              
15 shares of common stock to be issued to former officer                       1                   1 
                                              
Net loss                                 (833,129)        (833,129)
                                              
Balance, October 31, 2010   90,000   $1    2,168,554   $22   $1   $7,615,622   $(2,352,775)  $(7,508,321)  $(2,245,450)
                                              
Debt converted for shares             5,577,500    56         11,749              11,805 
                                              
Shares issued for services rendered             1,175,752    12         112,939              112,951 
                                              
Common stock issued for cash and subscription receivable             16,406,915    164         99,836              100,000 
                                              
Beneficial conversion feature                            174,500              174,500 
                                              
Conversion of Series B shares for common shares   (11,000)        451,578    4    -    (4)             - 
                                              
Shares issued in satisfaction of fraction shares resulting from 1 for 20 reverse stock split             1,782                             - 
Net loss                                 (708,566)        (708,566)
Balance, October 31, 2011   79,000   $1    25,782,081   $258   $1   $8,014,642   $(3,061,341)  $(7,508,321)  $(2,554,760)
Debt converted for shares             2,350,000    23         1,292              1,315 
Fair value of beneficial conversion feature                            91,000              91,000 
                                              
Net loss                                 (293,655)        (293,655)
                                              
Balance, April 30, 2012   79,000   $1    28,132,081   $281   $1   $8,106,934   $(3,354,996)  $(7,508,321)  $(2,756,100)

 

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

 

5
 

 

Todays Alternative Energy Corporation

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited) 

 

   Six Months Ended 
April 30,
   From Inception of
Development Stage
on November 1, 2007
Through April 30,
 
   2012   2011   2012 
CASH FLOWS FROM OPERATING ACTIVITIES               
Net loss  $(293,655)  $(391,699)  $(3,354,996)
Adjustments to reconcile net loss to net cash used in operating activities:               
Depreciation and amortization   -    -    3,570 
Loss on disposition of fixed assets   -    -    3,320 
Beneficial conversion feature expense   30,645    86,390    688,155 
Shares issued for services rendered   -    67,261    598,534 
Shares issued for legal settlement   -    -    92,000 
Shares to be issued for officer’s compensation   -    -    1 
Shares issued for interest payment   -    -    68,250 
Write off of other assets   49,000    -    49,000 
Changes in operating assets and liabilities:               
Decrease in prepaid expenses   -    975    2,000 
Increase in other assets   -    (54,000)   (49,000)
Increase in due to officer   -    5,613    - 
Increase in accounts payable and accrued expenses   140,772    104,959    861,865 
Net cash used in operating activities   (73,238)   (180,501)   (1,037,301)
                
Net cash used in investing activities   -    -    - 
                
Cash flows from financing activities:               
Proceeds from advance payable   -    10,000    111,000 
Proceeds from notes payable   -    174,500    891,194 
Proceeds from sale of stock   50,000    -    100,000 
Payments of notes payable   (20,000)   -    (68,922)
Net cash provided by financing activities   30,000    184,500    1,033,272 
                
Net (decrease) increase in cash and cash equivalents   (43,238)   3,999    (4,029)
Cash and cash equivalents – beginning of period   44,245    4,446    5,036 
Cash and cash equivalents – end of period  $1,007   $8,445   $1,007 
                
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:               
Interest paid  $-   $-   $- 
Income taxes paid  $-   $-   $- 
NON CASH INVESTING AND FINANCING ACTIVITIES:               
Contribution of accrued salaries by former officers  $-   $-   $394,679 
Common stock issued for services to be rendered  $-   $2,500   $2,500 
Exchange of advances payable for convertible note payable  $91,000   $-   $91,000 
Accrued expenses forgiven by former officer  $-   $-   $1,666 
Debt converted to equity  $1,315   $7,500   $175,185 

 

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

 

6
 

 

TODAYS ALTERNATIVE ENERGY CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED APRIL 30, 2012 AND 2011

 

NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements of Todays Alternative Energy Corporation (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2011 filed with the SEC on January 30, 2012. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited condensed consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the fiscal year ended October 31, 2011 as reported in the 10-K have been omitted.

 

Principles of Consolidation

 

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Guaranteed Enzyme Miracle Corporation (“GEM”) and Bio-Extraction Services, Inc. (“BESI”). Significant inter-company accounts and transactions have been eliminated.

 

Nature of Business and History of Company

 

The Company’s business has two primary opportunities that it is developing. The Company has a green cleaning products business that uses its scientific formulations to manufacture and sell a new line of industrial strength, environmentally friendly, and biodegradable cleaning products that contain natural non-toxic ingredients. The Company has a biodiesel business that uses its extraction technology to convert waste cooking oil and grease into a biodiesel fuel ingredient that it intends to sell to biodiesel fuel producers. The Company’s biodiesel business is designed to reduce environmental issues associated with disposing of waste cooking oil and grease.

 

Corporate Changes

 

On April 19, 2010, holders of the majority of the voting power of the Company’s outstanding stock as of April 16, 2010, voted in favor of changing the Company’s name to Todays Alternative Energy Corporation.  On June 9, 2010, the Company filed a certificate of amendment with the Secretary of State of Nevada in order to effect the name change.

 

On May 20, 2011, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of Nevada to effectuate a reverse stock split of the Company’s outstanding common stock on a 1 to 20 basis.  Each holder of common stock received 1 share of the Company’s common stock for each 20 shares of the Company’s common stock held.  Fractional shares were rounded up to the nearest whole share. All per share numbers quoted herein are reflective of the 1:20 reverse split. All common stock and related information have been retroactively restated.

 

7
 

 

On March 22, 2012, the board of directors appointed Albertus Hendrik van Leiden as a director of the Company.

 

Development Stage Company

 

As a result of impairing the value of the Company’s intangible assets, at October 31, 2007, the Company began implementing new plans to enter the biodiesel fuel market on November 1, 2007. As a result, the Company is a development stage enterprise, as defined by Accounting Standards Codification (the “Codification” or “ASC”) 915-10. The Company is devoting all of its present efforts in securing and establishing a new business, and its planned principle operations have not commenced, and, accordingly, no revenue has been derived during the organization period. From its inception of development stage through the date of these unaudited condensed consolidated financial statements, the Company has not generated any revenues and has incurred significant operating expenses. Consequently, its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from November 1, 2007 (the inception of development stage) through April 30, 2012, the Company has accumulated losses of $3,354,996.

 

Use of Estimates

 

The preparation of the unaudited condensed consolidated financial statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Loss per Share

 

Basic and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding. Potentially dilutive shares of common stock realizable from the conversion of our convertible debentures of 4,036,939,111 and 2,904,888,118 respectively at April 30, 2012 and 2011, are excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive.

 

Reclassifications

 

Certain reclassifications have been made in prior period's unaudited condensed consolidated financial statements to conform to classifications used in the current period.

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its unaudited condensed consolidated financial condition or the results of its operations.

 

Going Concern

 

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company has incurred losses since inception and has negative cash flows from operations. For the three and six months ended April 30, 2012, the Company has incurred net losses of $120,227 and $293,655, respectively and has a stockholders’ deficit of $2,756,100 as of April 30, 2012. The future of the Company is dependent upon its ability to obtain additional equity or debt financing and upon future successful development and marketing of the Company’s products and services. Although the Company may pursue additional financing, there can be no assurance that the Company will be able to secure such financing or obtain financing on terms beneficial to the Company. Failure to secure such financing may result in the Company’s inability to continue as a going concern.

 

As of April 30, 2012, the Company’s Chief Executive Officer was its sole employee. The Company continues to need to borrow cash from time to time in order to pay its operating costs and may need to pursue additional financing arrangements in order to generate sales from its Biodiesel Division and Cleaning Division. The Company anticipates future losses from operations as a result of ongoing overhead expenses incurred while it attempts to resume selling activities.

 

8
 

 

These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classifications of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

NOTE 2 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses are comprised of the following:

 

   April 30,
2012
   October 31,
2011
 
   (unaudited)     
         
Accounts payable  $6,669   $5,053 
Salaries   59,298    59,298 
Interest   581,950    514,512 
Payroll taxes   49,251    49,251 
Professional fees   244,558    174,590 
Old accounts payable   296,908    296,908 
Others   21,048    19,298 
Total  $1,259,682   $1,118,910 

 

NOTE 3 – CONVERTIBLE NOTES PAYABLE

 

   April 30,
2012
(unaudited)
   October 31,
2011
 
Convertible notes payable:          
Convertible promissory note (a)  $1,199,020   $1,199,020 
Convertible promissory note (b)   400    400 
Convertible promissory note (c)   32,445    33,645 
Convertible promissory note (d)   29,780    29,895 
Convertible promissory note (e)   40,000    40,000 
Convertible promissory note (f)   30,000    30,000 
Convertible promissory note (g)   196,900    196,900 
Convertible promissory note (h)   91,000    - 
    1,619,545    1,529,860 
Less: unamortized discount on debt   (122,120)   (61,765)
    1,497,425    1,468,095 
Less: current portion   (1,491,691)   (1,429,965)
Long term debt  $5,734   $38,130 

 

  a) Under a loan agreements and corresponding secured convertible promissory notes dated November 29, 2006, the third party lender may, in its sole and absolute discretion, loan the Company up to an aggregate total of $2,000,000. In May 2008, the conversion price was amended to provide a fixed conversion price of $0.001 per share. In addition, the note holder cannot convert any principal or interest under the notes to the extent that such conversion would require the Company to issue shares of its common stock in excess of its authorized and unissued shares of common stock. Each note accrues interest at an annual rate of eight percent (8%) and is payable on demand.

 

9
 

 

  b) On July 14, 2009, an unrelated third party investor acquired an interest in the November 29, 2006 loan agreement from the existing lender, since which time the investor has made various conversions to the principal and interest outstanding.
     
  c) On May 26, 2010, unrelated third party investors acquired an interest in the November 29, 2006 loan agreement from the existing lender, since which time the investors have made various conversions to the principal and interest outstanding. During the six months ended April 30, 2012, the note holder converted $1,200 of note principal into 1,200,000 shares of Company common stock valued at $0.001 per share.
     
  d) On December 24, 2010, the Company sold and issued a convertible promissory note in the aggregate principal amount of $30,000 to an unrelated third party. The note matures on December 24, 2012 and accrues interest at an annual rate of ten percent (10%). The note is payable in full on the maturity date unless previously converted into shares of Company common stock at a conversion price of $0.0001 per share. The Company recognized and measured an aggregate of $30,000 of the proceeds, which is equal to the intrinsic value of the imbedded beneficial conversion feature, to additional paid in capital and a discount against the note issued, with the discount being amortized over the note’s two-year term. During the six months ended April 30, 2012, the note holder converted $115 of note principal into 1,150,000 shares of Company common stock valued at $0.0001 per share.

 

  e) On January 25, 2011, the Company sold and issued a convertible promissory note in the aggregate principal amount of $40,000 to an unrelated third party. The note matures on January 25, 2013 and accrues interest at an annual rate of ten percent (10%). The note is payable in full on the maturity date unless previously converted into shares of Company common stock at a conversion price of $0.0001 per share. The Company recognized and measured an aggregate of $40,000 of the proceeds, which is equal to the intrinsic value of the imbedded beneficial conversion feature, to additional paid in capital and a discount against the note issued, with the discount being amortized over the note’s two-year term.
     
  f) On February 25, 2011, the Company sold and issued a convertible promissory note in the aggregate principal amount of $30,000 to an unrelated third party. The note matures on February 25, 2013 and accrues interest at an annual rate of ten percent (10%). The note is payable in full on the maturity date unless previously converted into shares of Company common stock at a conversion price of $0.0001 per share. The Company recognized and measured an aggregate of $30,000 of the proceeds, which is equal to the intrinsic value of the imbedded beneficial conversion feature, to additional paid in capital and a discount against the note issued, with the discount being amortized over the note’s two-year term.
     
  g) On October 7, 2011, unrelated third party investors acquired an interest in the November 29, 2006 loan agreement from the existing lender, since which an investor has converted $3,100 of note principal outstanding into 3,100,000 shares of Company common stock.

 

  h) On March 15, 2012, an unrelated third party investor acquired an interest in the Company’s advances payable from the existing lender and the Company converted $91,000 of the advances payable into a convertible note.  The note matures on March 15, 2014 and accrues interest at an annual rate of ten percent (10%). The note is payable in full on the maturity date unless previously converted into shares of Company common stock at a conversion price of $0.0001 per share. The Company recognized and measured an aggregate of $91,000 of the convertible notes payable, which is equal to the intrinsic value of the imbedded amended beneficial conversion feature, to additional paid in capital and a debt discount against the note issued, with the discount being amortized over the note’s two-year term.

 

10
 

 

Beneficial conversion feature expenses of $18,020 and $30,645 were recorded in the three and six months ended April 30, 2012, respectively and $688,155 was recorded from November 1, 2007 (the inception of development stage) through April 30, 2012, all of which were attributed to these loan agreements.

 

Beneficial conversion feature expenses of $9,906 and $86,390 were recorded in the three and six months ended April 30, 2011, respectively and $631,165 was recorded from November 1, 2007 (the inception of development stage) through April 30, 2011, all of which were attributed to these loan agreements.

 

NOTE 4 - EQUITY TRANSACTIONS

 

Common Stock

 

During the six months ended April 30, 2012, the Company issued 2,350,000 shares of common stock upon conversion of convertible promissory notes.

 

As of April 30, 2012 and October 31, 2011, there were 28,132,081 and 25,782,081 shares of Company common stock issued and outstanding, respectively.

 

Warrants and Options

 

During the six months ended April 30, 2012 and 2011, the Company did not issue any stock warrants or options.  As of April 30, 2012, no warrants or options are outstanding.

  

NOTE 5 - COMMITMENTS AND CONTINGENCIES

 

Operating Leases

  

In October 2010, the Company negotiated a 64 month lease agreement for a 14,833 square foot facility in San Antonio, Texas. The lease contains real estate tax and operating escalations and a termination option after the third year. Monthly rental payments start five months after completion of leasehold improvements to the facility and receipt of a certificate of occupancy. In June 2011, the landlord informed the Company of an approximately $100,000 increase in anticipated costs to build the manufacturing facility.  The Company rejected the landlord’s revised plans and does not plan to go forward with the lease on the present terms. The landlord objects to the Company’s rejection of the new lease terms and seeks to go forward with the lease.  In connection with terminating the facility project, the Company wrote off a $7,478 security deposit and a $41,522 development cost deposit. The Company is currently reviewing other options on how to proceed with growing the GEM products business.

 

Rent expense for the three and six months ended April 30, 2012 was $654 and $1,204, respectively. Rent expense for the three and six months ended April 30, 2011 was $0.

 

Lawsuit

 

On October 20, 2011, Indeglia & Carney (“Indeglia”) commenced an action in the Superior Court of California against the Company alleging causes of actions for breach of contract and account stated arising from legal fees allegedly owed Indeglia by the Company and seeking $132,111.52 plus prejudgment interest from the Company. On December 9, 2011, Indeglia filed a Request for Entry of Default with the Court. On March 5, 2012, the Company filed a Motion to set aside the Default and lodged its proposed Verified Answer and a proposed Cross Complaint. On March 8, 2012, the court also entered a default judgment. The Company then supplemented its motion to also seek that the default judgment be set aside. Hearing is set for August 17, 2012. The Company disputes the allegations of the complaint, opposes the Entry of Default and intends to vigorously defend the action.

 

Payroll taxes

 

At April 30, 2012, the Company is delinquent with remitting payroll taxes of $70,182, including estimated penalties and interest. The Company has recorded the delinquent payroll taxes, which are included in accrued expenses on the balance sheet. Although the Company has not entered into any formal repayment agreements with the respective tax authorities, management plans to make payment as funds become available. Penalties and interest amounts are subject to increase based on a number of factors that can cause the estimated liability to increase further.

 

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NOTE 6 – SUBSEQUENT EVENTS

  

Since April 30, 2012, a note holder submitted a request to convert $125 of accrued interest into 124,970 shares of Company common stock. As of the date of filing, the shares have not been issued.

 

On May 4, 2012, the Company sold and issued a convertible promissory note in the aggregate principal amount of $10,000 to an existing investor. The note matures on May 4, 2014 and accrues interest at an annual rate of ten percent (10%). The note is payable in full on the maturity date unless previously converted into shares of Company common stock at a conversion price of $0.0001 per share.

 

In June 2012, two existing note holders and an unrelated third party paid a total of $23,500 to certain vendors on behalf of the Company. Currently, there are no repayment terms.

 

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

 

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this report. This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements based on current expectations and assumptions.

 

Various risks and uncertainties could cause actual results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the section “Risk Factors” set forth in this report.

 

The forward-looking events discussed in this report, the documents to which we refer you and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

General

 

Todays Alternative Energy Corporation (the “Company” or “we”) is a development stage company. Our business has two primary opportunities that we are developing. We have a green cleaning products business that is organized to use our own scientific formulations to manufacture and sell a new line of industrial strength environmentally friendly biodegradable cleaning products that contain natural non-toxic ingredients. We have a biodiesel business that is organized to use our extraction technology to convert waste cooking oil and grease into a biodiesel fuel ingredient that we intend to sell to biodiesel fuel producers. Our biodiesel business is designed to reduce environmental issues associated with disposing of waste cooking oil and grease. We are expanding our strategy beyond our current technology to find new ways to produce biofuels feedstock.

 

On June 9, 2010, we changed our name from “Bio Solutions Manufacturing, Inc.” to “Todays Alternative Energy Corporation” to better reflect the direction of our business.

 

On July 1, 2010, we announced plans to brand our new line of industrial strength, environmentally friendly biodegradable cleaning products with the GEM name, a Company-owned brand. The GEM brand name and the accompanying tagline, "Guaranteed Enzyme Miracle," call attention to the natural enzymes and other eco-friendly industrial strength ingredients in GEM cleansers that safely and quickly remove oil, grease and other stains. GEM products contain no ammonia, phosphates, dyes, artificial scents or toxins, and are biodegradable. GEM products are designed to enter a large expanding market for green cleaners through direct marketing and retail sales.

 

On October 6, 2010, we formed Guaranteed Enzyme Miracle Corporation, a Texas corporation, to operate our green cleaning products business.

 

On May 20, 2011, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of Nevada to effectuate a reverse stock split of our outstanding common stock on a 1 to 20 basis.  Each holder of common stock received 1 share of the Company’s common stock for each 20 shares of the Company’s common stock held. Fractional shares were rounded up to the nearest whole share. All per share numbers quoted herein are reflective of the 1:20 reverse split. All common stock and related information have been retroactively restated.

 

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On March 22, 2012, our board of directors appointed Albertus Hendrik van Leiden as a director of the Company.

 

Our executive offices are located at 191 Post Road West, Westport, Connecticut 06880. Our telephone number is (888) 880-0994.

 

 Critical Accounting Policies

 

Our discussion and analysis of our financial conditions and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of financial statements requires managers to make estimates and disclosures on the date of the financial statements. On an on-going basis, we evaluate our estimates, including, but not limited to, those related to revenue recognition. We use authoritative pronouncements, historical experience, and other assumptions as the basis for making judgments. Actual results could differ from those estimates. We believe the following critical accounting policies affect our more significant judgments and estimates in the preparation of our unaudited condensed consolidated financial statements.

 

Going Concern

 

The unaudited condensed consolidated financial statements contained in this report have been prepared assuming that we will continue as a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. We have incurred losses since inception and have negative cash flows from operations. For the years ended October 31, 2011 and 2010, we incurred net losses of $708,566 and $833,129, respectively, and we have a stockholders’ deficit of $2,554,760 as of October 31, 2011. For the six months ended April 30, 2012 and 2011, we incurred net losses of $293,655 and $391,699, respectively, and we have a stockholders’ deficit of $2,756,100 as of April 30, 2012. Our future is dependent upon our ability to obtain additional equity or debt financing and upon future successful development and marketing of our products and services. Although we require additional financing, there can be no assurance that we will be able to secure such financing or obtain financing on terms beneficial to us. Failure to secure such financing may result in our inability to continue as a going concern.

 

We continue to need to borrow cash from time to time in order to pay our operating costs and may need to pursue additional financing arrangements in order to generate sales from our Biodiesel Division and Cleaning Division. We anticipate future losses from operations as a result of ongoing overhead expenses incurred while we attempt to resume selling activities.

 

The unaudited condensed consolidated financial statements contained in this report do not include any adjustments relating to the recoverability and classifications of recorded assets, or the amounts and classification of liabilities that might be necessary in the event we cannot continue in existence.

 

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Revenue Recognition

 

Sales are recorded at the time title passes to the customer, which, based on shipping terms, generally occurs when the product is shipped to the customer. Based on prior experience, we reasonably estimate our sales returns and warranty reserves and both are recorded when such reserve estimates are required. Due to lack of sales, there currently are no such reserves recorded for sales returns or warranty reserves. Sales are presented net of discounts and allowances.

 

Results of Continuing Operations

 

Basis of Presentation

 

The results of operations set forth below for the three and six months ended April 30, 2012 and 2011 and for the period from November 1, 2007 (inception of development stage) through April 30, 2012 are those of the continuing operations of Todays Alternative Energy Corporation which includes GEM and BESI on a consolidated basis.

 

 

             The following table sets forth, for the periods indicated, certain selected unaudited financial data from continuing operations:

 

   Three Months Ended
April 30,
   Six Months Ended
April 30,
   From Inception of
Development
Stage on
November 1, 2007
Through
 
   2012   2011   2012   2011   April 30, 2012 
Net sales  $-   $-   $-   $-   $- 
Cost of sales   -    -    -    -    - 
                          
Gross profit   -    -    -    -    - 
                          
Selling, general and administrative   69,393    123,146    195,572    245,308    2,168,377 
                          
Operating loss  $(69,393)  $(123,146)  $(195,572)  $(245,308)  $(2,168,377)

 

Comparison of the Three Months Ended April 30, 2012 and 2011

 

Net sales. Net sales from operations were $0 for the three months ended April 30, 2012 and 2011.

 

Selling, general, and administrative. Selling, general, and administrative expenses were $69,393 for the three months ended April 30, 2012 compared to $123,146 for the three months ended April 30, 2011. The decrease of $53,753 or 43.6% was primarily due to decreases in expenses associated with professional and filing fees, salaries and advertising.

 

Operating loss. Operating losses incurred were $69,393 for the three months ended April 30, 2012 compared to $123,146 for the three months ended April 30, 2011. The decrease of $53,753 or 43.6% was primarily due to decreases in expenses associated with professional and filing fees, salaries and advertising.

   

Beneficial conversion feature expense. Beneficial conversion features expense was $18,020 for the three months ended April 30, 2012 compared to $9,906 for the three months ended April 30, 2011. The increase of $8,114 or 81.9% was primarily due to a greater debt discount balance during the current three-month period.

 

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Interest expense. Interest expense was $32,814 for the three months ended April 30, 2012 compared to $30,648 for the three months ended April 30, 2011. The increase of $2,166 or 7.1% was primarily due to our having a greater amount of outstanding borrowings during the current three-month period.

 

Comparison of the Six Months Ended April 30, 2012 and 2011

 

Net sales. Net sales from operations were $0 for the six months ended April 30, 2012 and 2011.

 

Selling, general, and administrative. Selling, general, and administrative expenses were $195,572 for the six months ended April 30, 2012 compared to $245,308 for the six months ended April 30, 2011. The decrease of $49,736 or 20.3% was primarily due to decreases in expenses associated with professional and filing fees, salaries and advertising offset by an increase in expenses associated with terminating the San Antonio, Texas facility development.

 

Operating loss. Operating losses incurred were $195,572 for the six months ended April 30, 2012 compared to $245,308 for the six months ended April 30, 2011. The decrease of $49,736 or 20.3% was primarily due to decreases in expenses associated with professional and filing fees, salaries and advertising offset by an increase in expenses associated with terminating the San Antonio, Texas facility development.

   

Beneficial conversion feature expense. Beneficial conversion features expense was $30,645 for the six months ended April 30, 2012 compared to $86,390 for the six months ended April 30, 2011. The decrease of $55,745 or 64.5% was primarily due to the reduction in new borrowings during the current six-month period.

 

Interest expense. Interest expense was $67,438 for the six months ended April 30, 2012 compared to $60,001 for the six months ended April 30, 2011. The increase of $7,437 or 12.4% was primarily due to our having a greater amount of outstanding borrowings during the current six-month period.

 

Liquidity and Capital Resources

 

We have financed our operations, acquisitions, debt service, and capital requirements through cash flows generated from debt financing, and issuance of equity securities. Our working capital deficit at April 30, 2012 was $2,750,366 and $2,565,630 at October 31, 2011. We had cash of $1,007 at April 30, 2012 and $44,245 as of October 31, 2011.

 

We used $73,238 of net cash in operating activities for the six months ended April 30, 2012 compared to $180,501 for the six months ended April 30, 2011. The decrease of $107,263 or 59.4% was primarily due to nonrecurring payments, including salary payments, associated with the San Antonio, Texas facility made during the six month ended April 30, 2011.

 

Net cash flows used in investing activities was $0 for the six months ended April 30, 2012 and 2011.

  

Net cash flows provided by financing activities was $30,000 for the six months ended April 30, 2012 compared to $184,500 for the six months ended April 30, 2011. The net cash provided by financing activities is from the proceeds from the sales of our common stock and convertible promissory notes used to fund our operations.

 

Loan Agreement

 

On November 29, 2006, we entered into two separate loan agreements with certain lenders that provided for the potential for us to borrow up to $1,000,000 under each loan agreement. Under the loan agreements, the lenders received convertible promissory notes in the aggregate principal amounts of $164,000, $537,955 and $264,625, respectively, for loans made prior to the November 29, 2006 loan agreements. As a result of subsequent agreements between the lenders, a single lender now holds both $1,000,000 loan agreements. The lender may, in its sole and absolute discretion, make additional loans to us, up to an aggregate total of $2,000,000. Borrowings under the loan agreements bear interest at the rate of eight percent (8%) per annum and are payable on demand. Outstanding principal and accrued interest is also convertible into shares of our common stock at a fixed conversion rate of $0.001 per share as a result of a May 2008 amendment to the loan agreements. In addition, the lender cannot convert any principal or interest to the extent that such conversion would require us to issue shares of our common stock in excess of our authorized and unissued shares of common stock. The notes are secured by a first priority security interest in all of our assets. By their terms, the holder of the notes may not convert the notes to the extent such conversion would cause the holder to have acquired a number of shares of common stock that would exceed 4.99% of our then outstanding common stock.  Since July 2009, third party investors have acquired $241,000 in principal under the loan agreement. We have reduced the amount of unpaid principal and interest under the loan agreement through issuances of our common stock in satisfaction of conversion requests. Our outstanding aggregate balances under the notes as of April 30, 2012 and October 31, 2011 were $1,428,765 and $1,429,965, respectively.

  

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On December 24, 2010, January 25, 2011 and February 25, 2011, we sold and issued convertible promissory notes in the aggregate principal amounts of $30,000, $40,000 and $30,000, respectively, to a certain investor. The notes mature on the two-year anniversary of the respective dates of issuance and accrue interest at an annual rate of ten percent. The notes are payable in full on the maturity dates unless previously converted into shares of our common stock at a conversion price of $0.0001 per share. The $100,000 in aggregate proceeds was used to fund the development of our business along with subsequent advances we received from a third party lender. Our outstanding aggregate balance under the notes as of April 30, 2012 and October 31, 2011 was $99,780.

 

On March 15, 2012, we converted $91,000 of advances payable into a convertible note. The note matures on March 15, 2014 and accrues interest at an annual rate of ten percent. The note is payable in full on the maturity date unless previously converted into shares of our common stock at a conversion price of $0.0001 per share. Our outstanding balance under the note as of April 30, 2012 was $91,000.

 

Capital Requirements

 

The report of our independent public accountants for the fiscal year ended October 31, 2011 states that we have incurred operating losses since inception and requires additional capital to continue operations, and that these conditions raise substantial doubt about our ability to continue as a going concern.

 

As of April 30, 2012, we had a working capital deficit of $2,750,366. Currently, we do not generate any revenues. To operate our biodiesel fuel ingredient production business, we need to construct or lease biodiesel plants and we will not generate any revenues from this business until we have established plants that are operational. The expected cost to build each biodiesel plant is approximately $2.5 million and we do not have the capital to build such plants. In our green cleaning products business, we need to construct a production facility or we need to outsource production.  In the interim, we are not generating any revenues from this business.  Our capital requirements will be significantly greater if we establish our own production facility as compared to outsourcing production to a contract manufacturer. We raised $100,000 from the sales of convertible notes to an investor during fiscal year ended October 31, 2011 and will need to raise the remaining funds needed through additional sales of securities. If we cannot raise additional debt and/or equity capital, we will be unable to generate any revenues.

 

We believe that, as of the date of this report, our existing working capital and cash flows generated from operations will be insufficient to fund our plan of operations over the next 12 months, and accordingly, we will need to obtain additional financing.

 

As set forth above, we have entered into a secured loan agreement with a third party lender, under which the lender, in its sole and absolute discretion, can lend to us up to $2,000,000. However, such loans are completely discretionary with the lender, and as of the date hereof, we have received no commitment from the lender to advance us additional funds under the terms of the loan agreement or under new terms. From April to January 2012, we obtained $111,000 of advances from the third party lender. We sold unsecured convertible notes to an investor and may need to sell additional unsecured convertible notes. As of the date hereof, we have received no firm commitment from investors to purchase additional securities from us.

 

In the event that our lenders do not advance us additional funds under the loan agreement and investors do not purchase additional unsecured convertible notes, we would need to seek additional debt or equity financing, strategic alliance, or a joint venture. Such additional financing, alliances, or joint venture opportunities might not be available to us, when and if needed, on acceptable terms or at all. If we are unable to obtain additional financing in sufficient amounts or on acceptable terms under such circumstances, our operating results and prospects could be adversely affected. In addition, any debt financings or significant capital expenditures require the written consent of our existing lenders.

 

17
 

 

We intend to retain any future earnings to retire debt, finance the expansion of our business and any necessary capital expenditures, and for general corporate purposes. The loan agreement contains restrictions as to the payment of dividends.

 

Off-Balance Sheet Arrangements

 

None.  

 

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4 – CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer, in the reports that it files or submits under the Exchange Act, is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

  

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company's management, consisting of Len Amato, the Company’s Chief Executive Officer who is also our Chief Financial Officer (“CEO/CFO”), carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the three months ended April 30, 2012. Based upon that evaluation, the Company's CEO/CFO concluded that the Company's disclosure controls and procedures are not effective to ensure that information requiring disclosure by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company’s CEO/CFO, as appropriate, to allow timely decisions regarding required disclosure.

 

CHANGES IN INTERNAL CONTROLS

 

Our management, consisting of our CEO/CFO, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three month period ended April 30, 2012. Based on that evaluation, our CEO/CFO concluded that the termination of certain outsourcing arrangements for administrative activities on April 30, 2012 has had a materially adverse effect, or is reasonably likely to have a material adverse effect on the Company’s internal controls over financial reporting.  The Company has reassigned certain administrative tasks and is seeking new arrangements to perform administrative functions that are integral to its system of internal controls.

 

PART II: OTHER INFORMATION

 

ITEM 1 – LEGAL PROCEEDINGS

 

Indeglia & Carney v. Todays Alternative Energy Corporation, Case No. 30-2011-00517578 (Orange County Superior Court)

 

On October 20, 2011, Indeglia & Carney (“Indeglia”) commenced an action in the Superior Court of California against the Company alleging causes of actions for breach of contract and account stated arising from legal fees allegedly owed Indeglia by the Company and seeking $132,111.52 plus prejudgment interest from the Company. On December 9, 2011, Indeglia filed a Request for Entry of Default with the Court. On March 5, 2012, the Company filed a Motion to set aside the Default and lodged its proposed Verified Answer and a proposed Cross Complaint. On March 8, 2012, the Court also entered a default judgment. The Company then supplemented its motion to also seek that the default judgment be set aside. Hearing is set for August 17, 2012. The Company disputes the allegations of the Complaint, opposes the Entry of Default and intends to vigorously defend the action.

 

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ITEM 1A – RISK FACTORS

 

There have been no updates to our risk factors included in our most recent Annual Report on Form 10-K.

 

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

 

On March 15, 2012, the Company converted $91,000 of advances payable into a convertible promissory note.

 

The above referenced security was issued in a transaction that was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) of the Securities Act, which exempts transactions of an issuer not involving a public offering.

 

ITEM 3 – DEFAULT UPON SENIOR SECURITIES

 

None.

 

ITEM 4 – MINE SAFETY DISCLOSURES.

 

Not Applicable.

 

ITEM 5 – OTHER INFORMATION

 

On March 15, 2012, the Company converted $91,000 of advances payable into a convertible promissory note. The note matures on March 15, 2014 and accrues interest at an annual rate of 10%. The note is payable in full on the maturity date unless previously converted in shares of common stock at a conversion price of $0.0001 per share. The form of the convertible promissory note is attached hereto as exhibit 10.1 and incorporated by reference.

 

On May 4, 2012, the Company sold and issued a convertible promissory note in the aggregate principal amount of $10,000 to an existing investor. The note matures on May 4, 2014 and accrues interest at an annual rate of ten percent (10%). The note is payable in full on the maturity date unless previously converted into shares of Company common stock at a conversion price of $0.0001 per share. The form of convertible promissory note is attached hereto as exhibit 10.2 and incorporated herein by reference.

 

 ITEM 6 - EXHIBITS

 

  a. (a) The following exhibits are filed with this report.
       
    10.1 Form of Convertible Promissory Note dated as of March 15, 2012.
       
    10.2 Form of Convertible Promissory Note dated as of May 4, 2012.
       
  31.1 Certification pursuant to Sarbanes Oxley Section 302.
     
  32.1 Certification pursuant to 18 U.S. C. Section 1350.

 

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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.

 

 

   
   
Dated:  June 19, 2012   /s/ Len Amato
  By:
Its:
Len Amato
President, Chief Executive Officer, Chief Financial Officer and Director
    (Principal Executive Officer and Principal Financial and Accounting Officer)

 

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