RTS Oil Holdings, Inc. - FORM 10-K

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - RTS Oil Holdings, Inc.	Financial_Report.xls
EX-31.01 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13A-14 - RTS Oil Holdings, Inc.	geopoint10kexh3101.htm
EX-21.01 - SCHEDULE OF SUBSIDIARIES - RTS Oil Holdings, Inc.	geopoint10kexh2101.htm
EX-32.01 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - RTS Oil Holdings, Inc.	geopoint10kexh3201.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended March 31, 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 Number 000-53182

GEO POINT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

Utah		11-3797590
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2319 Foothill Drive, Suite 160
Salt Lake City, UT		84109
(Address of principal executive offices)		(Zip Code)

801-810-4662
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class		Name of each exchange on which registered
n/a		n/a

Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, Par Value $0.001
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act 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 (§ 229.405 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 if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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 o	Accelerated filer ¨
Non-accelerated filer o	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

State the aggregate market value of the voting and nonvoting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. As of September 30, 2011, the aggregate market value of the voting and nonvoting common equity held by nonaffiliates of the issuer was $46,112,700.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of July 16, 2012, issuer had 30,065,000 shares of issued and outstanding common stock, par value $0.001.

DOCUMENTS INCORPORATED BY REFERENCE: None.

TABLE OF CONTENTS

		Page

	Part I
Item 1	Business	1
Item 1A	Risk Factors	5
Item 1B	Unresolved Staff Comments	5
Item 2	Properties	5
Item 3	Legal Proceedings	6
Item 4	Mine Safety Disclosures	6

	Part II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	7
Item 6	Selected Financial Data	8
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	11
Item 8	Financial Statements and Supplementary Data	11
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	11
Item 9A	Controls and Procedures	12
Item 9B	Other Information	13

	Part III
Item 10	Directors, Executive Officers and Corporate Governance	13
Item 11	Executive Compensation	14
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	15
Item 13	Certain Relationships and Related Transactions, and Director Independence	15
Item 14	Principal Accounting Fees and Services	16
Item 15	Exhibits, Financial Statement Schedules	18
	Signatures	19

SPECIAL NOTE ABOUT FORWARD-LOOKING INFORMATION

Certain statements in this Annual Report on Form 10-K are forward-looking statements. Forward-looking statements are typically identified by the use of the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and similar words and expressions. Statements that describe our future strategic plans, goals, or objectives are also forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The forward-looking statements included in this report are made only as of the date of this report.

PART I

ITEM 1. BUSINESS

History

Geo Point Technologies was formed as a DBA of our founder, William Lachmar, in 1997 and then incorporated under the laws of California in 2002. In October 2006, we changed our state of incorporation from California to Utah by merging with our wholly owned Utah subsidiary formed for that purpose. In May 2010, we entered into a share exchange agreement by which we acquired Sinur Oil LLP, a Kazakh oil refining company with operations in southern Kazakhstan.

Previous to the acquisition, our primary efforts had been in our environmental division, providing historical site data searches, preliminary investigation and drilling, site characterization modeling, regulatory agency liaison, and full environmental clean-ups using such methods as vapor extraction, air sparging, bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection treatment, air stripping, and ionic exchange.

Our engineering division has provided consulting and compliance services for new utility installation and general site erosion control for housing tracts and updating service station underground storage tanks and dispensing systems to comply with continually changing C.A.R.B. (California Air Resources Board) regulations.

Our petroleum geology division has not promoted its services to customers but has been engaged in research and development of hydrocarbon-indicating methods and technology.

We are now in the process of shifting our focus to oil refining activities. To carry out this transition, we will continue the operations of our other divisions until such time as the oil refining division is generating sufficient revenue to be self-sustaining. At that point, we will evaluate whether or not to continue the operations of our environmental, engineering, and petroleum geology divisions or to focus all of our resources on our petroleum refining division.

Corporate Objective

We intend to continue to operate and expand our oil refining facility located in Karatau, Kazakhstan. The refinery is designed to process crude oil into diesel, gasoline, and mazut, a fuel oil. We currently sell the refined products domestically, and once current export restrictions are lifted, we intend to export them to the surrounding region as well.

Business Strategy

Our primary objective will be the achievement of profitability and self-sustaining growth by:

•

sourcing high-quality crude oil at favorable prices from local oil fields;

•

refining oil at our Karatau, Kazakhstan, micro-refinery; and

•

selling the finished products, which consist of diesel, petroleum, and mazut, both to domestic and international customers.

The Sinur Oil Plant at Karatau

The site of the Sinur Oil refinery was previously a fuel depot. It was acquired by the Sinur Oil principals in 2007. Since then, it has been remodeled and enhanced to turn it into a fully functional oil refinery.

The plant is expected to produce approximately 25,000 tons annually of refined products. The micro-refinery is based on technology that has been in use since the 1990s and is currently deployed in over a dozen micro-refineries throughout Kazakhstan. The refinery is located in Karatau, Kazakhstan, which is about 50 miles from Taraz, the fifth largest city in Kazakhstan. The existing infrastructure, which includes electrical supply, water, boiler room, reservoirs, pipeline access, rail access, and administrative buildings, should be able to support an increase in refining activity. Throughout Kazakhstan there are several smaller oil fields that are looking for access to refineries, but do not produce sufficient volume to supply larger refineries.

The technology for the main refining stack has been provided by Montazh-Engineering LLP, a Kazakh company. It relies on electromagnetic induction instead of traditional open-flame combustion as its major heat source. We believe that this new “green” technology provides the following advantages over traditional refineries:

Environmentally Friendly - The absence of emissions from combustion products results in a cleaner, less-polluted environment.

Consistency – The induction heater enables operators to adjust temperatures with more precision than oil-fired furnaces, resulting in a more consistent and uniform finished product.

Reduced Labor – The highly automated process requires fewer employees to oversee and make adjustments.

Safety – The absence of an open flame combined with lower excess pressure, compared to other refining technologies, offers a safer work environment for plant operators.

Energy Efficiency – Oil-fired furnaces lose large amounts of heat through exhaust fumes, resulting in heat transfer efficiencies of less than 60%. The electromagnetic inductors, on the other hand, can convert electrical energy into heat at over 98% efficiency on-site.

Cost Savings – Plant construction requires a fraction of the initial capital expenditures necessary for the traditional billion dollar refineries.

Modularity - The modular design of the micro-refinery enables it to be expanded in relatively brief time (6-9 months) by constructing additional refining stacks. This also allows one stack to be shut down for maintenance independently of the others, allowing the plant to remain in operation, as compared to the large-scale refineries that have to completely shut down annually for up to 30 days at a time to perform maintenance.

Competition

Petroleum refining and marketing is highly competitive. Within Kazakhstan, there are three major refineries – Shymkent, Pavlodar, and Atyrau – that supply the majority of the country’s refined petroleum needs. The Shymkent refinery is located in southern Kazakhstan within 200 kilometers of the Sinur Oil refinery in Karatau. The other major Kazakh refineries in Pavlodar and Atyrau are located more than 1,500 kilometers away. There are also several smaller micro-refineries, similar to Sinur Oil’s, throughout Kazakhstan.

Russia supplies significant quantities of refined products to the Kazakhstan market. Russian refineries have supplied, on a regular basis, products that are not available or are in short supply from Kazakhstan refineries. Russian refineries emerge as competitors in the southern Kazakhstan market primarily when supply and demand, currency imbalances, or differing interpretations of applicable legal and tax requirements create opportunities for them to export bulk products into the region.

The principal competitive factors that would affect our refining operations are crude oil and other feedstock costs, refinery efficiency, refinery product mix and product distribution, and transportation costs. Certain competitors have refineries that are larger and more complex and, as a result, could have lower per unit costs or higher margins per unit of throughput. Sinur Oil has no crude oil reserves and does not plan to engage in exploration at this time. We believe that we will be able to obtain crude oil and other feedstock at generally competitive prices for the foreseeable future.

Manufacturing Capacity and Suppliers

The main piece of equipment for the Sinur Oil refinery, the refining stack, was produced by and bought from Montazh-Engineering LLP, a Kazakh company. There are other producers of similar micro-refining equipment in Kazakhstan that Sinur Oil evaluated before deciding to use Montazh-Engineering. If Sinur Oil were to expand its refining capacity, it could take up to a year for Montazh-Engineering to produce and install more refining stacks.

To operate profitably, it is important that Sinur Oil have a reliable supply of quality crude oil for its refining activities. We have encountered some difficulty to date in obtaining a consistent supply of crude oil, and hence have not been able to operate the refinery at maximum capacity.

Governmental and Environmental Regulation

Sinur Oil’s operations are subject to various levels of governmental control and regulation in Kazakhstan. We plan to focus on compliance with all legal requirements in the conduct of our operations and employ business practices that we consider to be prudent under the circumstances in which we operate. In Kazakhstan, legislation affecting the oil and gas industry is under constant review for amendment or expansion. Pursuant to such legislation, various governmental departments and agencies have issued extensive rules and regulations that affect the oil and gas industry, some of which carry substantial penalties for failure to comply. These laws and regulations can have a significant impact and could adversely affect our profitability by increasing the cost of doing business and by imposition of new taxes, tax rates, and tax schemes. Inasmuch as new legislation affecting the industry is commonplace and existing laws and regulations are frequently amended or reinterpreted, we are unable to predict the future cost or impact of complying with such laws and regulations.

We do not expect that any of these governmental controls or regulations will affect projects in which we participate in a manner materially different than they would affect other projects of similar size or scope of operations. All current legislation is a matter of public record, and we are not able to accurately predict what additional legislation or amendments may be enacted. Governmental regulations may be changed from time to time in response to economic or political conditions.

On September 15, 2010, the government of Kazakhstan granted Sinur Oil a “License to Produce and Sell” petroleum products from its refinery in Karatau, southern Kazakhstan. This license allows Sinur Oil to sell the finished products it refines itself, as well as to buy and sell petroleum products from other suppliers. The license was issued by the Kazakh government after a lengthy process of document submission, quality testing, and review by various governmental departments, including the Ministry of Industry and Trade, the Agency for Natural Monopolies, and the Ministry of Oil and Gas.

Research and Development

There were no research and development expenses for the years ended March 31, 2012 and 2011.

Employees

We currently have approximately 45 full-time employees, 26 of whom are employed and paid only when our refinery is operating.

Office and Facilities

Our executive offices are located at 2319 Foothill Drive, Suite 160, Salt Lake City, Utah 84109. Our telephone number at that address is 801-810-4662, and our facsimile number is 801-820-3070.

Environmental and Engineering Division

The business operations of the Environmental Division are primarily comprised of services related to identifying any recognized environmental condition (“REC”) as provided by the federal, state or local governmental agencies and any potential lender that may be seeking a security interest in subject properties. If an REC is identified to exist, then we will provide the project management and engineering necessary to remediate the property and bring it back into regulatory compliance. Examples of products of concern when they are inadvertently inoculated into the shallow subsurface soils or groundwater are gasoline, diesel fuel, dry cleaning fluid, rocket fuel, arsenic, mercury, lead and other toxic substances.

The Engineering Division has provided consulting and compliance services for new utility installation and general site erosion control for housing tracts and updating service station underground storage tanks and dispensing systems to comply with continually changing California Air Resources Board (“CARB”) regulations. These services mostly comprise subsurface trench work where underground utilities are installed such as electrical, fiber optic, water and gas. Other engineering services are for gasoline service stations where updated monitoring equipment must be installed or the monitoring equipment shows an error code that needs to be corrected before the gas station can begin to pump gas again, or more crash posts must be installed around a propane tank, dispenser island or similar setting.

These Divisions’ services generally include:

Construction and Emergency Response

Demolition, Remediation and Restoration

Subsurface Investigation

Water and Wastewater Treatment

Engineering and Environmental Consulting

Environmental Permitting and Compliance

Litigation Support

We are a California General Engineering, Construction and Hazardous Materials Contractor (Lic.# 920887).

The technology underlying the License Agreement of the “HI Technology”, which is related to petroleum geology, has not been promoted to customers and requires substantial research and development of hydrocarbon-indicating methods and technology. No funds were expended for research and development of the HI Technology during the past 2 years. We intend to use our proprietary HI Technology to become a technology leader in oil and gas exploration services. As we enter the commercialization stage of the HI Technology development, we must acquire projects and business opportunities that build the credibility of the HI Technology and develop our ability to deliver quality oil and gas exploration prospect areas. Substantial additional funding will be required for research and development respecting the efficacy of the HI Technology to locate oil and gas prospect areas.

Our competitors include most large and well-funded entities whose businesses and subsidiaries focus solely on the industries in which we will be operating. In this respect, we are at a distinct disadvantage to these competitors. Our services may be limited to smaller projects by reason of our limited financial resources. We believe our competitive position in this industry as a whole is not presently significant.

We do not advertise our services in any publications, and we rely primarily on past customers for repeat business, including large property management companies, wholesale fuel distributors and automobile dealers, among others, for referrals.

We do not maintain any hazardous chemicals on-site, and those we utilize in our remediation services are shipped directly to the impacted site from the supplier of chemicals, with all the proper manifests by a certified Hazardous Materials transporter. These chemicals are available from a wide array of suppliers. We store no materials that require us to maintain any permits.

We do not hold any patents; however, we have proprietary technology applications related to our HI Technology.

We have no real suppliers of products other than some environmental hand held equipment that is competitively marketed by numerous distributors, and there is little chance that any equipment that is necessary to conduct our environmental services would not be available to rent or purchase.

We have two main subcontractors that are almost always a part of any Environmental services conducted by us, which are the drillers and sample analysis laboratories; however, there are numerous companies that provide these services, and we would always be able to subcontract these services to others because the drilling and sample analysis businesses are very competitive, along with the prices for these services. We do not anticipate any adverse effect if our main subcontractors ceased operations. There are many other subcontractors that would be available to provide these services. Our current principal subcontractors are ASTECH Environmental Services, Inc., a drilling contractor, and Alpha Scientific Corporation, a laboratory analysis subcontractor.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Our executive offices are currently located in office space that has been made available to us by a nonrelated party free of charge. We cannot be sure that this space will remain available to us or will continue to be sufficient for our needs. We rent our environmental remediation offices in Santa Ana, California, on a month-to-month basis, which means that we could choose to leave or the property owner could require us to leave with one month’s notice. Our current rental payment is approximately $1,000.00 per month.

Our oil refinery in Karatau, Kazakhstan, is located on a 4.3 hectare site that includes the refining equipment, storage tanks, administrative buildings, boilers, pumps, a warehouse, and a rail spur.

ITEM 3. LEGAL PROCEEDINGS

In April 2011, we were sued by E&R Encino Property in the Superior Court of California, County of Los Angeles, Northwest District (Case No. LC093221). The plaintiff allege that we were negligent in performing certain tests to determine whether there were contaminants on a parcel of real property and that our negligence was also a breach of contract. On February 2, 2012, we settled with the plaintiff for a minimal amount and the lawsuit was dismissed with prejudice.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

Our common stock has been quoted on the Over-the-Counter Bulletin Board since May 14, 2010. The following table sets forth for the period indicated the high and low closing sales prices for our common stock as quoted under the symbol GNNC on the Over-The-Counter Bulletin Board:

	Low		High

2012:
Second Quarter (through July 12, 2012)	$	1.70	$	1.70
First Quarter		1.70		1.70

2011:
Fourth Quarter		1.10		2.30
Third Quarter		2.30		2.30
Second Quarter		2.30		2.30
First Quarter		1.75		4.00

2010:
Fourth Quarter		1.75		2.00
Third Quarter		1.99		2.50
Second Quarter		2.00		3.00
First Quarter		1.40		3.00

As of July 16, 2012, we had 30,065,000 shares of common stock issued and outstanding. Of those shares, 10,000,000 shares are held by Gafur Kassymov, General Director of our subsidiary, Sinur Oil, and a director.

As of July 16, 2012, there were approximately 158 holders of record of our common stock.

Dividend Policy

We have never paid cash dividends on our common stock and do not anticipate that we will pay dividends in the foreseeable future. We intend to use any future earnings primarily for the expansion of our business.

Recent Issuances of Unregistered Securities

We did not issue any unregistered securities during the period covered by this report.

Penny Stock Regulations

Our stock is presently regulated as a penny stock, and broker-dealers will be subject to regulations that impose additional requirements on us and on broker-dealers that want to publish quotations or make a market in our common stock. The Securities and Exchange Commission has promulgated rules governing over-the-counter trading in penny stocks, defined generally as securities trading below $5.00 per share that are not quoted on a securities exchange or which do not meet other substantive criteria. Under these rules, our common stock is currently classified as a penny stock. As a penny stock, our common stock is currently subject to rules promulgated by the Securities and Exchange Commission that impose additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to sale. Further, if the price of the stock is below $5.00 per share and the issuer does not have $2.0 million or more net tangible assets or is not listed on a registered national securities exchange, sales of such stock in the secondary trading market are subject to certain additional rules promulgated by the Securities and Exchange Commission. These rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices, and disclosure of the compensation to the broker-dealer and the salesperson working for the broker-dealer in connection with the transaction. These rules and regulations may affect the ability of broker-dealers to sell our common stock, thereby effectively limiting the liquidity of our common stock. These rules may also adversely affect the ability of persons who acquire our common stock to resell their securities in any trading market that may exist at the time of such intended sale.

Equity Compensation Plans

We do not have any securities authorized for issuance under any equity compensation plans.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our audited financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors discussed elsewhere in this report.

Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues, gross margin and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity, and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include those relating to our liquidity requirements, future events that may result in the need for additional capital, the cost and availability of additional capital that we may require and possible related restrictions on our future operating or financing flexibility, our future ability to attract industry or financial participants to share the costs of exploration, exploitation, development, and acquisition activities, future plans and the financial and technical resources of industry or financial participants, and other factors.

Overview

We own and operate an oil refinery in Karatau, Kazakhstan, that refines crude oil into diesel fuel, gasoline, and mazut, a heating oil. Our environmental and engineering division provides geological and earth study services related to land surveying for new construction, soil testing and environmental risk and impact assessments, and natural resource assessments with an emphasis on oil and gas deposit discovery. During November 2010, we commenced production at the refinery. The refinery equipment is new and during this initial production startup phase, we have not operated the refinery at its full capacity due to various factors. During the quarter and subsequent period, the refinery was shut down due to the lack of availability of crude oil and the need for certain needed improvements, repairs, and maintenance.

Sources of Revenues

We generate revenues principally from the sale of crude oil and refined oil products in Kazakhstan. We also generate revenue from our environmental and engineering services in the state of California.

Cost of Revenues and Operating Expenses

Cost of Revenues. For our refining division, cost of revenues consists of costs of products sold, which includes the cost of crude oil and purchased finished products, direct costs of labor, maintenance materials and services, utilities, marketing expense, transportation costs, and other direct operating costs. Cost of products is presented exclusive of depreciation and amortization. Cost of revenues in connection with our environmental and engineering division consists of direct supplies and direct labor related to the fulfillment of each job.

General and Administrative. General and administrative expenses consist of compensation and related expenses for executive, finance, accounting, administrative, legal, professional fees, other corporate expenses, and marketing.

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

We believe that of our significant accounting policies, which are described in Note 3 to the financial statements, the following accounting policy involves a greater degree of judgment and complexity.

Accordingly, this is the policy we believe is the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Revenue Recognition. Revenue from the sale of crude oil and refined oil products is measured at the fair value of the consideration received or receivable, net of all trade discounts and volume rebates. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Transfers of risks and rewards vary depending on the individual terms of the contract of sale. Our main products will be derived from refined crude oil, although the sale of crude oil is expected to occur from time to time.

Revenues from our environmental and engineering division are recognized over the period of services being performed.

Results of Operations

Revenues. Revenues from our refining segment for the year ended March 31, 2012, were $246,239, compared to $964,347 during the comparable prior period in 2011. The decrease in revenues was primarily due to the lack of available feedstock to operate our refinery. However, in the prior period, we sold crude oil that we had purchased prior to the commencement of production.

Cost of Revenues. Cost of revenues from our refining segment for the year ended March 31, 2012, were $551,795, compared to $594,858 during the comparable prior period in 2011. The decrease in cost of revenues was primarily due to the lack of available feedstock to operate our refinery, but was offset by the write-off of prepaid crude. Revenues from our environmental services segment commenced in November 2010 of the previous fiscal year.

General and Administrative Expenses. General and administrative expenses for the year ended March 31, 2012, were $610,042, compared to $731,082 for the comparable prior period in 2011. General and administrative expenses primarily consisted of professional fees, salaries and wages, and stock-based compensation. The decrease was primarily related to the additional professional expenditures incurred during the prior period in connection with initial expenditures related to public company filings.

Amortization and Depreciation. Amortization and depreciation for the year ended March 31, 2012, were $384,107, compared to $146,099 for the comparable prior period in 2011. The inclusion of amortization and depreciation was due to the commencement of production at our refinery during November 2010.

Cash Flows from Operating Activities. Net cash used in operating activities during the year ended March 31, 2012, was $97,866, compared to net cash used in operating activities for the year ended March 31, 2011, of $431,100. This decrease in cash used by operations was primarily due to customer deposits received during fiscal 2012, increase in accounts payable, and the add-back of depreciation expense. Offsetting these amounts was an increase in prepaids and other assets due to the Company prepaying for crude oil prior to its delivery.

Cash Flows from Investing Activities. Net cash used in investing activities during the year ended March 31, 2012, was $30,718, compared to net cash used in investing activities for the year ended March 31, 2011, of $200,859. This decrease in cash used for investing was primarily due to additional capital expenditures related to our refinery in the prior period.

Cash Flows from Financing Activities. Net cash used in financing activities during the year ended March 31, 2012, was $26,798, compared to net cash provided by financing activities for the year ended March 31, 2011, of $671,761. This decrease in cash provided by financing activities was directly related to the $750,000 in proceeds we received during the first quarter of fiscal 2011, which was used for operations.

Liquidity and Capital Resources

As of March 31, 2012, our principal source of liquidity was cash totaling $35,249. The primary source of our liquidity during the year ended March 31, 2012, was cash on hand, loans from a related party, and customer deposits in excess of prepaid crude oil. The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern. As shown in the accompanying financial statements, we have generated limited revenues during the year ended March 31, 2012, have a working capital deficit of $3,045,788, have limited capital to fund operations, and had a net usage of cash in operations. In addition, we have significant notes payable and accrued interest that were due in October 2011 are currently in default, and for which we are currently negotiating an extension. Additionally, we have had difficulties in securing contracts for the consistent delivery of crude oil for us to refine. These inconsistencies have required us to operate the refinery at below capacity and at times required us to close the refinery. These conditions raise substantial doubt about our ability to continue as a going concern.

Our future is dependent upon our ability to obtain equity and/or debt financing and, ultimately, to achieve profitable operations from the development of our business segments. Since inception through March 31, 2012, we funded operations through related-party borrowings and $750,000 in borrowings from unrelated third parties. We are currently attempting to raise capital through debt and equity offerings and if needed will attempt to negotiate extensions of due dates in connection with capital leases and notes payable that are due in the near future. Currently, we do not have any commitments or assurances for additional capital other than the revolving loans payable from the shareholder and related individuals. There can be no assurance that the revenue from future expected operations from the refinery will be sufficient for us to achieve profitability in our operations, and it is possible that additional equity or debt financing may be required for us to continue as a going concern. We believe that our current cash together with our expected cash flows from operations will be sufficient to meet our anticipated cash requirements for working capital and capital expenditures through October 2012.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements, including the report of independent registered public accounting firm, are included beginning at page F-1 immediately following the signature page of this registration statement.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive officer and principal financial officer (whom we refer to as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure.

Our Certifying Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) as of March 31, 2012, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of March 31, 2012, our disclosure controls and procedures were not effective due to a material weakness communicated to management by our independent registered accounting firm.

Internal Controls over Financial Reporting

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Our management, including our Certifying Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent 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 system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

Our Certifying Officer conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, he concluded that our internal control over financial reporting was not effective as of March 31, 2012.

In connection with our fiscal 2012 audit, our independent registered public accounting firm notified us of the following weakness in our internal controls, which it considers a material weakness:

Lack of segregation of duties with the cash receipts and disbursements processes.

Inadequate controls over the period end closing function and account reconciliations.

We are currently in the process of remediating the material weaknesses by assessing the current segregations and areas in which improvement can be made. Due to limited capital and personnel, we may not be able to remediate in the immediate future but are attempting to remediate within fiscal 2013.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

The following table sets forth the name, age, and position of each of our current directors and executive officers:

Name	Age	Title
Jeff Jensen	33	President, Director
Gafur Kassymov	60	Director, Chairman of the Board, General Director of Sinur Oil
Jeffrey Brimhall	31	Director, Secretary/Treasurer

The principal occupation, title, and business experience of our executive officers and directors during the last five years, including the names and locations of employers, are indicated below.

Jeff Jensen became our director in August 2007 and our president and chief executive officer in March 2010. He assumed the role of chief financial officer as well in December 2010. Mr. Jensen is the president and owner of Jensen Consulting Group, a business consulting firm he founded in April 2007 that helps companies perform financial analysis, forecast cash flow needs, and secure investment capital. In 2003, he founded Pacific Industrial Contractor Screening, a proprietary online clearinghouse that assists petrochemical companies prequalify contractors, and served as its chief information officer from 2003 through September 2007. Mr. Jensen earned an M.B.A. from Brigham Young University in 2006 and a B.S. in electrical and computer engineering, magna cum laude, from Brigham Young University in 2003.

Gafur Kassymov became our director following the completion of the acquisition of Sinur Oil LLP in October 2010. Mr. Kassymov is the General Director of Sinur Oil, overseeing company management and operations. He has been involved in the oil refinery’s development since its inception in 2005. Permanently residing in the Republic of Kazakhstan, Mr. Kassymov is the Chairman of the Uzbek Ethnic Cultural Association in the Republic of Kazakhstan, a non-governmental and non-political body. Mr. Kassymov is a member of the Kazakhstan People’s Assembly (KPA), chaired by the President of Kazakhstan. Mr. Kassymov studied at Leningrad Electrotechnical School, and then continued his education in Kazakhstan where he graduated from Dzambyl University with a bachelor’s degree in engineering and economics. He also holds a degree of jurisprudence studies from Auylie-Ata University where he completed his post-graduate education in 2000. Mr. Kassymov, however, is not a practicing attorney.

Jeffrey Brimhall currently serves as our director. He served as the chief financial officer from March 2010 to December 2010. Mr. Brimhall has several years of accounting and financial reporting experience. He is currently a Financial Reporting Analyst with Resolute Energy Corp. and was previously an audit supervisor and audit associate with Hein & Associates LLP and Grant Thornton LLP, respectively. Mr. Brimhall earned his B.S. in Accounting from Brigham Young University in 2005 and is a Certified Public Accountant licensed in the state of Colorado. Mr. Brimhall is also a director of Caspian Services, Inc.

Code of Ethics

We have adopted a code of ethics that applies to all of our employees, including our executive officers, a copy of which was attached as Exhibit 14.01 to our Annual Report on Form 10-K for the Year Ended March 31, 2009.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and persons that own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our equity securities. Officers, directors, and greater than 10% stockholders are required to furnish us with copies of all Section 16(a) forms they file.

Based solely upon a review of Forms 3, 4, and 5 and amendments thereto filed with the Securities and Exchange Commission during or respecting the last fiscal year ended March 31, 2012, no person that, at any time during the most recent fiscal year, was a director, officer, beneficial owner of more than 10% of any class of our equity securities, or any other person known to be subject to Section 16 of the Exchange Act failed to file, on a timely basis, reports required by Section 16(a) of the Securities Exchange Act.

ITEM 11. EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth, for the last three fiscal years, the dollar value of all cash and noncash compensation earned by the person who was our chief executive officer (our “Named Executive Officer”) as of the end of the last fiscal year:

Name and Principal Position	Year Ended March 31	Salary ($)	Bonus ($)	Stock Award(s) ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation	Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)

Jeff Jensen	2012
CEO and CFO(1)	2011	--	--	--	--	--	--	--	--

(1)	Hired March 29, 2010, and serving without compensation until our financial position permits us to pay compensation.

Our compensation committee reviews our financial condition and internal projections for the following year before setting our officers’ salaries.

No other employee received any compensation in excess of $100,000 from us in the fiscal years ended March 31, 2012 and 2011.

No employees received any equity incentive awards during the fiscal years ended March 31, 2012 and 2011.

We do not have any plans that provide for the payment of any retirement benefits to any employee, and there are no contracts, agreements, plans, or arrangements that provide for any payment to any of our executive officers in the event of resignation, retirement, or other termination of employment with us.

Directors’ Compensation

Our directors are not compensated for their services as directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Principal Stockholders

The following table sets forth, as of July 14, 2011, the name, address, and stockholdings of each person who owns of record, or was known by us to own beneficially, 5% or more of our common stock currently issued and outstanding; the name and stockholdings of each director; and the stockholdings of all executive officers and directors as a group. Unless otherwise indicated, all shares consist of common stock, and all such shares are owned beneficially and of record by the named person or group:

Name of Person or Group	Nature of Ownership	Amount			Percent

Principal Stockholders:
Gafur Kassymov	Common Stock		10,000,000			33.3	%
Kapal St. 144
Taraz City, Kazakhstan

Directors:
Gafur Kassymov	----------See above----------

Jeffrey Brimhall	Common Stock		--			--
2319 Foothill Drive, #160
Salt Lake City, UT 84109

Jeffrey Jensen	Common Stock		16,000	(1)		*
2319 Foothill Drive, #160
Salt Lake City, UT 84109

All Executive Officers and Directors as a Group (three persons):	Common Stock		10,016,000	(1)		33.3	%

_______________

* Less than 1%.

(1)	Shares of common stock are held by Jeff Jensen, his wife, Casey Jensen, or JTJ Holdings LLC, CLJ Holdings LLC, Data System Innovations, and Jensen Consulting Group LLC, of which he and his spouse are members and/or managers

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Advances to Shareholder

Prior to the reverse acquisition, Sinur Oil provided cash advances to a former shareholder of Sinur Oil for operating purposes. Sinur Oil recorded these advances as a receivable from the shareholder at the time of the advance. The advances were short-term and did not accrue interest. At March 31, 2012 and 2011, there were no advances due to the former shareholder.

Revolving Loans Payable to Related Parties

Sinur Oil’s operations have been funded through revolving loans due to its shareholder or direct family members or entities controlled by its shareholder. The following is a summary of loans due to these related parties as of March 31, 2012 and 2011.

On October 31, 2011, the Company entered into a revolving debt agreement with a direct relative of Sinur Oil’s principal shareholder. Under the terms of the agreement, the Company may borrow up to 27 million KZT, which converts to approximately $180,000 at March 31, 2012. The note does not incur interest and was due January 31, 2012, which automatically extends monthly until called by the holder. As of March 31, 2012, amounts due under this loan were $21,789 and $158,211 was available. The amount due has been reflected as a current liability on the accompanying balance sheet.

On February 2, 2010, we entered into a revolving debt agreement with a direct relative of Sinur Oil’s shareholder. Under the terms of the agreement, we may borrow up to 30 million KZT, which is approximately $200,000 and $203,000 at March 31, 2012 and 2011, respectively. The note does not accrue interest and is due February 2, 2013. As of March 31, 2012 and 2011, amounts due under this loan were $133,250 and $135,360, respectively.

On December 12, 2009, we entered into a revolving debt agreement with an entity owned by Sinur Oil’s shareholder. Under the terms of the agreement, we were able to borrow up to 20 million KZT, or $135,360 at March 31, 2011, respectively. The note did not accrue interest and expired December 14, 2011. As of March 31, 2012 and 2011, no amounts were due under this.

Since the above loans do not accrue interest, we have imputed interest at 19% per annum. Imputed interest during the years ended March 31, 2012 and 2011, was $33,535 and $33,205, respectively. In addition, we determined that an annual interest rate of 19% was consistent with borrowing rates we could receive.

Assumption of Capital Lease

In connection with the assumption of a capital lease from an entity owned by Sinur Oil’s shareholder, we agreed to reimburse the entity payments that it had made on the capital lease. In addition, in January 2011, the same entity loaned us an additional $33,530 that was used to pay interest on the capital lease to obtain an extension of the principal balance due. As of March 31, 2012 and 2011, amounts due to this entity were approximately $97,896 and $99,438, and are reflected as a current liability on the accompanying balance sheet.

Director Independence

None of our directors is considered an independent member of our board of directors under NASD Rule 5605(a)(2).

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

We were billed $108,225 and $105,905 for professional services rendered for the audit and reviews of our annual and interim financial statements for fiscal years ended March 31, 2012 and 2011, respectively.

Audit Related Fees

For our fiscal years ended March 31, 2012 and 2011, we did not incur any audit related fees.

Tax Fees

For our fiscal years ended March 31, 2012 and 2011, we were billed $5,061 and $0, respectively for professional services rendered for tax compliance.

Audit and Nonaudit Service Preapproval Policy

In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder, the board of directors has, as of September 25, 2006, adopted an informal approval policy that it believes will result in an effective and efficient procedure to preapprove services performed by the independent registered public accounting firm.

Audit Services. Audit services include the annual financial statement audit (including quarterly reviews) and other procedures required to be performed by the independent registered public accounting firm to be able to form an opinion on our financial statements. The audit committee preapproves specified annual audit services engagement terms and fees and other specified audit fees. All other audit services must be specifically preapproved by the audit committee. The audit committee monitors the audit services engagement and may approve, if necessary, any changes in terms, conditions, and fees resulting from changes in audit scope or other items.

Audit-Related Services. Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that historically have been provided to us by the independent registered public accounting firm and are consistent with the Securities and Exchange Commission’s rules on auditor independence. All audit-related services must be preapproved by the audit committee.

Tax Services. The audit committee must preapprove any tax services.

All Other Services. Other services are services provided by the independent registered public accounting firm that do not fall within the established audit, audit-related, and tax services categories. The audit committee must preapprove any other services.

Procedures. All proposals for services to be provided by the independent registered public accounting firm, which must include a detailed description of the services to be rendered and the amount of corresponding fees, are submitted to the audit committee.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit Number*	Title of Document	Location

Item 2	Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
2.01	Articles of Merger	Incorporated by reference from initial filing of the registration statement on Form 10, SEC File No. 000-53182, filed June 23, 2008.

Item 3.	Articles of Incorporation and Bylaws
3.01	Articles of Incorporation	Incorporated by reference from initial filing of the registration statement on Form 10, SEC File No. 000-53182, filed June 23, 2008.

3.02	Bylaws	Incorporated by reference from initial filing of the registration statement on Form 10, SEC File No. 000-53182, filed June 23, 2008.

Item 4.	Instruments Defining the Rights of Security Holders, Including Indentures
4.01	Specimen stock certificate—Common Stock	Incorporated by reference from initial filing of the registration statement on Form 10, SEC File No. 000-53182, filed June 23, 2008.

Item 10.	Material Contracts
10.01	License Agreement between Geo Point Technologies, Inc. and Bill Lachmar, as of January 31, 2008	Incorporated by reference from initial filing of the registration statement on Form 10, SEC File No. 000-53182, filed June 23, 2008.

10.02	Share Exchange Agreement among Geo Point Technologies, Inc., GSM Oil Holdings Limited, and Summit Trustees PLLC, dated May 7, 2010	Incorporated by reference from our annual report on Form 10-K for the year ended March 31, 2010, filed July 14, 2010.

10.03	Engagement Agreement with National Securities Corp. dated May 28, 2010	Incorporated by reference from our annual report on Form 10-K for the year ended March 31, 2010, filed July 14, 2010.

10.04	Form of Warrant with schedule	Incorporated by reference from our annual report on Form 10-K for the year ended March 31, 2010, filed July 14, 2010.

10.05	Loan & Profit Sharing Agreement Second Amendment for $400,000	Incorporated by reference from our annual report on Form 10-K for the year ended March 31, 2011, filed July 14, 2011.

10.06	Loan & Profit Sharing Agreement Amendment for $350,000	Incorporated by reference from our annual report on Form 10-K for the year ended March 31, 2011, filed July 14, 2011.

Item 14.	Code of Ethics
14.01	Code of Ethics	Incorporated by reference from our annual report on Form 10-K for the year ended March 31, 2009, filed June 24, 2009.

Item 21.	Subsidiaries
21.01	Schedule of Subsidiaries	This filing.

Item 31.	Rule 13a-14(a)/15d-14(a) Certifications
31.01	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14	This filing.

Item 32.	Section 1350 Certifications
32.01	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This filing.

101 INS	XBRL Instance Document**	This filing.

101 SCH	XBRL Schema Document**	This filing.

101 CAL	XBRL Calculation Linkbase Document**	This filing.

101 DEF	XBRL Definition Linkbase Document**	This filing.

101 LAB	XBRL Labels Linkbase Document**	This filing.

101 PRE	XBRL Presentation Linkbase Document**	This filing.

___________

*	The number preceding the decimal indicates the applicable SEC reference number in Item 601, and the number following the decimal indicating the sequence of the particular document.

** The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GEO POINT TECHNOLOGIES, INC.


Date: July 16, 2012	By:	/s/ Jeff Jensen
		Jeff Jensen
		President, Principal Executive Officer, and Principal Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: July 16, 2012	/s/ Jeff Jensen
	Jeff Jensen, Director
	President, Principal Executive Officer, and Principal Financial Officer


Date: July 16, 2012	/s/ Gafur Kassymov
	Gafur Kassymov, Director


Date: July 16, 2012	/s/ Jeffrey Brimhall,
	Jeffrey Brimhall, Director

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the Shareholders

Geo Point Technologies, Inc.

We have audited the accompanying consolidated balance sheets of Geo Point Technologies, Inc. (the "Company"), and subsidiaries, as of March 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Geo Point Technologies, Inc. as of March 31, 2012 and 2011, 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.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the financial statements and as discussed in Note 2 to the financial statements, the Company has incurred significant losses and negative cash flows from operating activities since inception, has negative working capital and an accumulated deficit, is in default on certain debt, and is dependent on additional debt or equity financing in order to continue its operations. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Hansen, Barnett & Maxwell, P.C.

Salt Lake City, Utah

July 16, 2012

F - 1

GEO POINT TECHNOLOGIES, INC., AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2012			March 31, 2011
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	35,249		$	191,545
Accounts receivable, net		3,911			25,414
Inventories		285,094			51,211
Prepaids and other current assets		36,502			151,218
Total Current Assets		360,756			419,388

OTHER ASSETS
Property, plant and equipment, net		4,243,895			5,441,010
Value-added tax receivable		255,393			223,435
Other assets		1,000			1,000
		4,500,288			5,665,445

TOTAL ASSETS	$	4,861,044		$	6,084,833

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilies	$	1,056,096		$	527,342
Customer deposits		561,899			98,131
Line of credit		22,830			22,258
Notes payable		902,500			750,000
Capital lease payable		610,284			272,657
Payable to related parties		252,935			99,438
Total Current Liabilities		3,406,544			1,769,826

LONG-TERM LIABILITIES
Capital lease payable, net of current portion		-			396,458
Loans payable to related parties, net of current portion		-			135,360
TOTAL LIABILITIES		3,406,544			2,301,644

Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred stock; $0.001 par value; 5,000,000 shares authorized; none outstanding		-			-
Common stock; par value of $0.001; 100,000,000 shares authorized; 30,065,000 shares issued and outstanding at March 31, 2012 and 2011		30,065			30,065
Additional paid-in capital		5,688,173			5,654,638
Accumulated deficit		(3,251,714	)		(830,236	)
Other comprehensive loss		(1,012,024	)		(1,071,278	)
Total Stockholders' Equity		1,454,500			3,783,189

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	4,861,044		$	6,084,833

See accompanying notes to the consolidated financial statements.

F - 2

GEO POINT TECHNOLOGIES, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Year Ended March 31,			For the Year Ended March 31,
	2012			2011

REVENUES:
Refining	$	246,239		$	964,347
Environmental services		126,459			90,841
Total revenues		372,698			1,055,188

COSTS AND OPERATING EXPENSES:
Cost of refining revenues		551,795			594,858
Cost of environmental services revenues		38,099			24,384
General and administrative		610,042			731,082
Depreciation and amortization		384,107			146,099
Impairment of long lived asset		750,000			-
Total costs and operating expenses		2,334,043			1,496,423

OPERATING LOSS		(1,961,345	)		(441,235	)

OTHER INCOME (EXPENSE)
Interest expense		(460,133	)		(351,901	)
Total other expense		(460,133	)		(351,901	)

NET LOSS	$	(2,421,478	)	$	(793,136	)

Other comprehensive gain - foreign currency translation adjustments		59,254			47,298

COMPREHENSIVE LOSS	$	(2,362,224	)	$	(745,838	)

Basic and dilutive loss per share	$	(0.08	)	$	(0.03	)
Basic and dilutive weighted average common shares outstanding		30,065,000			28,185,962

See accompanying notes to the consolidated financial statements.

F - 3

GEO POINT TECHNOLOGIES, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED MARCH 31, 2011 AND 2012

	Common Stock				Additional Paid-in		Accumulated			Other Comprehensive
	Number of Shares		Amount		Capital		Deficit			Loss			Total
Balance, March 31, 2010		26,808,000	$	26,808	$	5,589,433	$	(9,691	)	$	(1,118,576	)	$	4,487,974

Reverse acquisition with Geo Point		3,257,000		3,257		-		(27,409	)		-			(24,152	)
Stock based compensation		-		-		32,000		-			-			32,000
Imputed interest on notes payable to related parties		-		-		33,205		-			-			33,205
Net loss and change in other comprehensive loss		-		-		-		(793,136	)		47,298			(745,838	)
Balance, March 31, 2011		30,065,000		30,065		5,654,638		(830,236	)		(1,071,278	)		3,783,189

Imputed interest on notes payable to related parties		-		-		33,535		-			-			33,535
Net loss and change in other comprehensive loss		-		-		-		(2,421,478	)		59,254			(2,362,224	)
Balance, March 31, 2012		30,065,000	$	30,065	$	5,688,173	$	(3,251,714	)	$	(1,012,024	)	$	1,454,500

See accompanying notes to the consolidated financial statements.

F - 4

GEO POINT TECHNOLOGIES, INC., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended March 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,421,478	)	$	(793,136	)
Adjustments to reconcile net loss to net cash used in operating activities:
Imputed interest on notes payable to related parties		33,535			33,205
Depreciation		384,107			146,099
Impairment of long lived asset		750,000			-
Stock based compensation		-			32,000
Change in operating assets and liabilities, net of amount acquired in 2011:
Accounts receivable		21,434			(25,367	)
Inventories		(236,038	)		(50,731	)
Prepaids and other current assets		113,077			(143,173	)
Valued-added tax receivable		(35,636	)		(142,519	)
Accounts payable and accrued liabilies		825,144			415,311
Customer deposit		467,989			97,211
Net cash used in operating activities		(97,866	)		(431,100	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash received in connection with reverse acquisition		-			119,749
Net repayment from (advances to) related parties		-			34,828
Purchase of property, plant and equipment		(30,718	)		(208,828	)
Net cash used in investing activities		(30,718	)		(54,251	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (payments) on revolving notes payable to related parties		21,912			(52,916	)
Proceeds from notes payable		-			750,000
Payments on capital lease obligations		(48,710	)		-
Net repayment on lines of credit		-			(25,323	)
Net cash provided by (used in) financing activities		(26,798	)		671,761

EFFECT OF FOREIGN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS		(914	)		4,211
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(156,296	)		190,621
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		191,545			924
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	35,249		$	191,545

CASH PAID FOR:
Interest	$	67,109		$	74,368
Income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Assumption of capital lease	$	-		$	(659,083	)
Assumption of note payable to related parties	$	-		$	(65,908	)
Receipt of equipment in connection with assumption of capital lease	$	-		$	647,314
Assets received in connection with reverse acquisition with Geo Point	$	-		$	12,406
Liabilities received in connection with reverse acquisition with Geo Point	$	-		$	(156,307	)
Conversion of accured interest into note payable	$	152,500		$	-

See accompanying notes to the consolidated financial statements.

F - 5

GEO POINT TECHNOLOGIES, INC., AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Background

On May 7, 2010, Geo Point Technologies, Inc. (“Geo Point”), entered into a Share Exchange Agreement (the “Agreement”) with Summit Trustees PLLC, a Utah professional limited liability company (“Summit”), to acquire all of the issued and outstanding stock of GSM Oil Holdings Ltd. (“GSM”), a limited liability company organized in Cyprus on June 2, 2009. Summit acted for the benefit and on behalf of certain beneficial stockholders of GSM. On October 28, 2010, Geo Point completed the acquisition of all the assets and business of GSM in exchange for 26,808,000 shares of Geo Point’s common stock. Pursuant to the terms of the Agreement, GSM became a wholly owned subsidiary of Geo Point, and the GSM shareholders assumed the controlling interest in Geo Point. GSM recently completed the acquisition of Sinur Oil LLP, a limited liability partnership organized in Kazakhstan (“Sinur Oil”), through its wholly owned subsidiary, GSM OIL B.V., a Dutch private company limited by shares (the “Subsidiary”). Sinur Oil was organized on January 19, 2007 (“Inception”). The transaction between GSM and Sinur Oil was between related entities held by the same shareholder. The purpose of the transaction was for corporate structure strategies.

The primary assets of Sinur Oil include an oil refinery in Karatau, Kazakhstan. The refinery consists of a main refining stack that has a processing capacity of approximately 2,000 tons of crude oil per month. The refinery is located on a site that contains the refining equipment, storage tanks, administrative buildings, boilers, pumps, a warehouse, and a rail spur. It is currently operating. The three main refined products are diesel fuel, gasoline, and mazut, a heating oil.

The consolidated financial statements presented herein include the operations of GSM and Sinur Oil from the date of Sinur Oil’s Inception and the operations of Geo Point from the date of the reverse acquisition of October 28, 2010 (all entities collectively referred to as the “Company”).

Geo Point’s operations are located in Santa Ana, California. Geo Point provides geological and earth study services related to: land surveying for new construction; soil testing and environmental risk and impact assessments; natural resource assessments with an emphasis on oil; and gas deposit discovery.

Reverse Acquisition of Geo Point

The acquisition of Geo Point was accounted for as a reverse acquisition in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company determined for accounting and reporting purposes that Sinur Oil is the acquirer because of the significant holdings and influence of the control group before and after the acquisition. In connection with the transaction, Sinur Oil shareholders held approximately 89% of Geo Point’s issued and outstanding common stock. Accordingly, the assets and liabilities of Sinur Oil are reported at historical cost and the historical results of Sinur Oil will be reflected in this and future Geo Point filings as a change in reporting entity. The assets and liabilities of Geo Point are reported at fair value on the date of acquisition, and results of operations are reported from the date of acquisition of October 28, 2010. The assets and liabilities of Geo Point are reported at their carrying values, which represented fair value. No goodwill was reported since Geo Point had limited business activities.

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The following is a summary of the carrying value, which represented the fair value of Geo Point’s assets and liabilities as of October 28, 2010, the date of acquisition:

Assets:
Cash and cash equivalents	$	119,749
Prepaid expenses and other current assets
Property and equipment		3,362
Other assets		1,000
Total Assets		132,155

Liabilities:
Accounts payable and accrued liabilities
Line of credit		47,581
Total Liabilities		156,307

Net Deficit	$	(24,152	)

The following unaudited pro forma information was prepared as if the acquisition had taken place at the beginning of the year for the year ended March 31, 2011:

	2011

Revenues	$	1,099,718
Net income (loss)	$	(1,530,546	)

2. GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has generated limited revenues during the year ended March 31, 2012, has a working capital deficit of $3,045,788, has limited capital to fund operations, and had a net usage of cash in operations. Currently, the Company is in default on its capital lease totaling $610,284 and its notes payable totaling $902,500. Additionally, the Company has had difficulties in securing contracts for the consistent delivery of crude oil for it to refine. These inconsistencies have required the Company to operate the refinery at below capacity and at times required it to close the refinery. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The future of the Company is dependent upon its ability to obtain equity and/or debt financing and, ultimately, to achieve profitable operations from the development of its business segments. Since Inception through March 31, 2012, the Company funded operations through related-party borrowings and $750,000 in borrowings from unrelated third parties. In addition, during the year ended March 31, 2011, the Company assumed a lease for the primary refining equipment in which a significant amount of liabilities were incurred. Since July 2011 and at March 31, 2012, the Company was in default of the lease agreement. See Note 7 for additional information. Currently, the Company does not have any commitments or assurances for additional capital other than the revolving loans payable from the shareholder and related individuals. There can be no assurance that the revenue from future expected operations from the refinery will be sufficient for the Company to achieve profitability in its operations, and it is possible that additional equity or debt financing may be required for the Company to continue as a going concern.

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The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities, which might be necessary in the event the Company cannot continue in existence.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of Geo Point, GSM, GSM Oil, B.V., and Sinur Oil. All material intercompany accounts and transactions have been eliminated in consolidation. The results of Geo Point’s operations are included in the accompanying financial statements from the reverse acquisition date of October 28, 2010, through March 31, 2012.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes to financial statements. Actual results could differ from those estimates. Significant estimates made by management include the useful lives of property, plant, and equipment and future cash flow expected from the property, plant, and equipment.

Development-Stage Enterprise

The Company exited the development stage during the year ended March 31, 2011, due to the commencement of its intended operations.

Fair Value of Financial Instruments

On April 1, 2008, the Company adopted the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, Fair Value Measurements, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

·	Level 1 – quoted market prices in active markets for identical assets or liabilities.

Level 2 – inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

·	Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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Due to an impairment charge based on Level 3 inputs, the Company considers the carrying amount of property, plant and equipment to be recorded at fair value on a non-recurring basis. For more detail see impairment of long-lived assets later in Note 3. As of March 31, 2012 and 2011, the Company did not have any other Level 1, 2, or 3 financial assets, nor did it have any financial liabilities. Financial instruments consist of cash, accounts receivable, payables, line of credit notes payable to third parties, and the capital lease obligation. The fair value of financial instruments approximated their carrying values as of March 31, 2012 and 2011, due to the short-term nature of these items.

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts, and marketable securities purchased with an original maturity of three months or less to be cash and cash equivalents. The fair value of cash and cash equivalents approximates their carrying amounts due to their short-term maturity.

Concentration of Credit Risk and Customer Concentration

The Company generates revenues principally from the sale of crude oil and refined oil products and its engineering services. As a result, the Company’s trade accounts receivable are concentrated primarily in these industries. As of March 31, 2011, one customer accounted for 39.3% of the Company’s consolidated accounts receivable. The loss of this customer would not have a significant impact on the Company’s operations and cash flows. There were no concentrations at March 31, 2012. The Company performs limited credit evaluations of its customers and generally does not require collateral. The Company maintains reserves for potential credit losses. The Company considers the following factors when determining if collection of a revenue is reasonably assured: customer creditworthiness, past transaction history with the customer, if any, current economic industry trends, and changes in customer payment terms. In some cases regarding new customers, management requires payment in full or letters of credit before goods are provided. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. During the periods presented, credit losses were not significant.

Inventories

Inventories are measured at the lower of cost or market. The cost of inventories is based on the first-in first-out method and includes expenditures incurred in acquiring the crude oil and additives and other costs incurred in bringing them to their existing location. Market represents net realizable value of inventories, which is determined as an estimated net sales price in the ordinary course of business, less reasonably predictable cost of completion and disposal. At March 31, 2012, inventories consisted of crude oil of $248,910 and refined product of $36,184. At March 31, 2011, inventories consisted of crude oil of $10,955 and refined product of $40,256.

Property, Plant and Equipment

Property, plant, and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any.

The costs of major renovations and improvements that lead to a prolongation of the useful life or expanded future use capabilities of an asset are capitalized and depreciated over the asset’s remaining useful life. Maintenance and repair costs that represent minor renewals and improvements are charged to expenses as incurred.

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Depreciation is charged to the statement of operations and comprehensive income (loss) on а straight-line basis over the estimated useful lives of the individual assets. Depreciation commences on the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and substantially ready for use.

The following useful lives are used as а basis for calculating depreciation:

·	Buildings and constructions	8-50 years
·	Machinery and equipment	3-15 years
·	Vehicles	5-10 years
·	Other assets	3-10 years

Depreciation methods, useful lives, and residual values of property, plant, and equipment are reviewed at each reporting date.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of the carrying amount of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of any asset may not be fully recoverable. If circumstances require that a long-lived asset be tested for possible impairment, the Company compares the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset. If the carrying amount of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value based on a discounted cash flow analysis.

At March 31, 2012, the Company determined, based on future undiscounted cash flows, that an impairment of the oil refinery in Karatau, Kazakhstan was necessary. Thus as of March 31, 2012, the Company recorded an impairment of $750,000. This determination was largely based upon the difficulty in securing a steady flow of crude oil which the refinery could refine.

Revenue Recognition

Revenue from the sale of crude oil and refined oil products is measured at the fair value of the consideration received or receivable, net of all trade discounts and volume rebates. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Transfers of risks and rewards vary depending on the individual terms of the contract of sale. The Company’s main products will be derived from refined crude oil, although the sale of crude oil is expected to occur from time to time.

All proceeds from sales and services in which the above criteria are not met are deferred until such criteria are met. At March 31, 2012 and 2011, the Company had customer deposits of $561,899 and $98,131, respectively, which were received for future purchases of the Company’s product.

Revenues from providing historical site data searches, preliminary investigation and drilling, site characterization modeling, regulatory agency liaison, and full environmental clean-ups using such methods as vapor extraction, air sparging, bio-remediation, ORC (Oxygen Release Compound) and HRC (Hydrogen Release Compound) injection treatment, air stripping, and ionic exchange are recognized over the period of services being performed.

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All revenues are reported inclusive of shipping and handling costs billed and exclusive of any taxes billed to customers. Shipping and handling costs incurred are reported in cost of products sold.

Allowances for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers the following factors when determining if collection of a fee is reasonably assured: customer creditworthiness and past transaction history with the customer. If the Company has no previous experience with the customer, the Company typically requests retainers or obtains financial information sufficient to extend the credit. If these factors do not indicate collection is reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash. If the financial condition of the Company’s customers deteriorates, additional allowances are made. To date, there have been no significant write-offs or allowances.

Share Based Compensation – Non-Employees

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees and non-employee directors in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services. The fair value of the equity instrument is charged directly to stock-based compensation expense and credited to additional paid-in capital.

Cost Classifications

Costs of products sold include the cost of crude oil and purchased finished products, inclusive of transportation costs and exclusive of depreciation and amortization. The Company purchases crude oil that at times exceeds the supply needs of its refinery. Additionally, the Company enters into buy/sell exchanges of crude oil with certain parties to facilitate the delivery of quantities to certain locations that are netted at carry-over cost. Operating expenses include direct costs of labor, maintenance materials and services, utilities, marketing expenses, and other direct operating costs. In addition, during the year ended March 31, 2012, operating expenses included approximately $375,496 of deposits paid by the Company to vendors for delivery of crude oil for which the deliveries were never received. General and administrative expenses include compensation, professional services, and other support costs.

Income Taxes

The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within the provision for income taxes. The Company believes it has appropriate support for the income tax positions taken and to be taken on future income tax returns.

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Segment Reporting

The Company reports its segments under ASC 280, Segment Reporting, which establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. At March 31, 2012 and 2011, the Company had two reporting segments; environmental and engineering services and refining services. See Note 11 for additional information.

Basic and Diluted Loss per Common Share

Basic loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period. Diluted loss per share reflects the potential dilution to basic earnings per share that could occur upon conversion or exercise of securities, options, or other such items to common shares using the treasury stock method, based upon the weighted average fair value of the Company’s common shares during the period. The Company excluded warrants to purchase 250,000 common shares from the computation of diluted net loss per common share as the effect would have been antidilutive during the year ended March 31, 2011. As of March 31, 2012, the Company did not have any dilutive securities.

Functional Currency Transactions

Foreign subsidiaries operating in a local currency environment use the local currency as the functional currency. The Tenge is the functional currency for the Company’s operations in Kazakhstan. Resulting translation gains or losses are recognized as a component of other comprehensive income. Transaction gains or losses related to balances denominated in a different currency than the functional currency are recognized in the statement of operations. Net foreign currency transaction gains included in the Company’s statement of operations were negligible for the years ended March 31, 2012 and 2011.

Comprehensive Income

Total comprehensive income represents the net change in shareholders’ equity during a period from sources other than transactions with shareholders. Accumulated other comprehensive income is comprised solely of accumulated foreign currency translation adjustments.

Reclassification

To be consistent with the current year presentation, the Company has reclassified $146,608 that was previously recorded as property, plant and equipment to prepaids and other current assets at March 31, 2011. The reclassification did not have an impact on the Company’s financial statements other than the balance sheet presented at March 31, 2011.

Environmental Matters

When it is probable that costs associated with environmental remediation obligations will be incurred and they are reasonably estimable, the Company accrues such costs at the most likely estimate. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study and are charged to provisions for closed operations and environmental matters. The Company periodically reviews its accrued liabilities for such remediation costs as evidence becomes available indicating that its remediation liability has potentially changed. Such costs are based on its current estimate of amounts that are expected to be incurred when the remediation work is performed within current laws and regulations.

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Accounting for reclamation and remediation obligations, commonly referred to as an asset retirement obligation, requires management to make estimates unique to each operation of the future costs the Company will incur to complete the reclamation and remediation work required to comply with existing laws and regulations. Actual costs incurred in future periods could differ from amounts estimated, if any. Under current laws, the Company is not required to perform any reclamation and remediation procedures if the current property were to be abandoned. However, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required. Any such increases in future costs could materially impact the amounts charged to earnings. As of March 31, 2012 and 2011, the Company has no accrual for reclamation and remediation obligations because the Company has not engaged in any significant activities that would require remediation under the current laws and regulations.

4. PROPERTY, PLANT, AND EQUIPMENT

The following is a summary of the Company’s property, plant, and equipment at March 31, 2012 and 2011:


	March 31,			March 31,
	2012			2011

Buildings	$	619,545		$	718,947
Equipment		3,928,942			4,642,548
Land		226,988			226,988
Total		4,775,475			5,588,483
Less: accumulated depreciation		(531,580	)		(147,473	)
Net Value	$	4,243,895		$	5,441,010

Depreciation expense during the years ended March 31, 2012 and 2011, was $384,107 and $146,099, respectively.

See Note 3 for discussion regarding impairment of the oil refinery in Karatau, Kazakhstan

5. NOTES PAYABLE AND LINE OF CREDIT

Notes Payable

On April 20, 2010, the Company entered into a $400,000 note payable agreement with a third party. Under the terms of the agreement, the principal balance and interest of $100,000 was due on April 15, 2011. On June 20, 2011, the Company and the holder agreed to convert accrued interest of $100,000 into the note, incur interest at 30% per annum, and extend the due date to October 15, 2011. Thus, total principal due at March 31, 2012 was $500,000. The note is currently in default, and the Company is negotiating with the lender to extend the due date. At March 31, 2012 and 2011, the Company has accrued interest of approximately $152,964 and $95,000 included in accrued liabilities, respectively. The proceeds were used in operations. The note is denominated in United States dollars. Translation losses are immaterial to the financial statements and have not been recognized. See below for an additional note payable received from the third party.

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On November 5, 2010, the Company entered into a $350,000 note payable agreement with a third party. Under the terms of the agreement, the note accrues interest at 30% per annum with principal and interest due at April 15, 2011. On June 20, 2011, the Company and the holder agreed to convert accrued interest of $52,500 into the note, incur interest at 30% per annum, and extend the due date to October 15, 2011. Thus, total principal due at March 31, 2012 was $402,500. The note is currently in default, and the Company is negotiating with the lender to extend the due date. The proceeds were used for operations. The note is denominated in United States dollars. Translation losses are immaterial to the financial statements and have not been recognized. At March 31, 2012 and 2011, the Company has accrued interest of $138,410 and $42,000 included in accrued liabilities, respectively.

In August 2011, the Company entered into a line of credit with the note payable holder described above. Under the terms of the line of credit, the Company is allowed to borrow up to a maximum of $50,000 accruing interest daily at a rate of 24% per annum and due in six months from issuance. As of March 31, 2012, the balance of the line of credit was $22,830 and $27,170 was available. Subsequent to March 31, 2012, the Company received additional advances of $22,000.

Line of Credit

In August 2010, Geo Point drew $50,000 from a line of credit already in place with a bank. At March 31, 2011, the line of credit accrued interest at 5.50% per annum and had no amounts available. The line of credit is unsecured, but is guaranteed by Geo Point’s former Chief Executive Officer. The bank has since demanded repayment of the amounts drawn on the line of credit, and the Company has been making periodic payments to satisfy the obligation. As of March 31, 2011, the line of credit balance of $22,258 was in default and reflected as a current liability. During fiscal 2012, the Company paid the remaining amounts due on the line of credit.

6. RELATED-PARTY TRANSACTIONS

Advances to Shareholder

Prior to the reverse acquisition, the Company provided cash advances to the former shareholder of Sinur Oil for operating purposes. The Company recorded these advances as a receivable from the shareholder at the time of the advance. The advances were short-term and do not accrue interest. At March 31, 2012 and 2011, there were no advances due to the former shareholder.

Revolving Loans Payable to Related Parties

Since Inception, the Company’s operations have been funded through revolving loans due to Sinur Oil’s shareholder or direct family members or entities controlled by Sinur Oil’s shareholder. The following is a summary of loans due to these related parties as of March 31, 2012 and 2011.

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On February 2, 2010, the Company entered into a revolving debt agreement with a direct relative of Sinur Oil’s shareholder. Under the terms of the agreement, the Company may borrow up to 30 million KZT, which converts to approximately $200,000 and $203,000 at March 31, 2012 and 2011, respectively. The note does not accrue interest and is due February 2, 2013. As of March 31, 2012 and 2011, amounts due under this loan were $133,250 and $135,360, respectively.

On December 12, 2009, the Company entered into a revolving debt agreement with an entity owned by Sinur Oil’s shareholder. Under the terms of the agreement, the Company was able to borrow up to 20 million KZT, $135,360 at March 31, 2011. The note did not accrue interest and expired on December 14, 2011. As of March 31, 2012 and 2011, no amounts were due under this loan.

Assumption of Capital Lease

See Note 7 regarding the assumption of a capital lease from an entity owned by Sinur Oil’s shareholder. In connection with this assumption, the Company agreed to reimburse the entity payments that it had made on the capital lease. In addition, in January 2011, the same entity loaned the Company an additional $33,530 that was used to pay interest on the capital lease to obtain an extension of the principal balance due. As of March 31, 2012 and 2011, amounts due to this entity were approximately $97,896 and $99,438, respectively, and are reflected as a current liability on the accompanying balance sheet.

Imputed Interest

Since the above loans do not accrue interest, the Company has imputed interest at 19% per annum and recorded these amounts as interest expense with the offset to additional paid-in capital. Imputed interest during the years ended March 31, 2012 and 2011, was $33,535 and $33,205, respectively. In addition, the Company determined that an annual interest rate of 19% was consistent with borrowing rates the Company could receive.

7. CAPITAL LEASE

On June 28, 2010, the Company assumed a capital lease previously entered into by the shareholder. The shareholder entered into the lease to purchase the primary refining equipment for the facility. The shareholder controlled in excess of 50% of the issued and outstanding common stock of the Company at the time of assumption. Thus, the transaction was recorded at the shareholder’s basis. In connection with the transaction, the Company recorded equipment of $647,314, capital lease liability of $659,083, value-added tax receivable of $77,678, and advances due to a related party of $65,908. Amounts due to a related party represented the purchase price of the assets in excess of the liability assumed, see Note 6 for additional information.

At transfer, the lease required monthly principal payments of $17,813, had a remaining term of 37 months, accrued interest at 19% per annum, and was secured by the assets purchased.

In March 2012, the Company was in default of July’s payment for this lease and has received a notice from the bank notifying the Company that it is in default and the bank could take such actions as foreclosure and other legal remedies. To date, no additional payments have been made on this obligation. Thus, the Company has recorded the entire liability as current on the accompanying balance sheet at March 31, 2012. The Company is currently attempting to renegotiate the lease and/or obtain an extension. Due to the Company’s limited capital resources, there are no guarantees that an acceptable agreement can be reached.

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At March 31, 2012 and 2011, the Company accrued interest and penalties of $130,981 and $61,760, respectively, which is included in accounts payable and accrued liabilities on the accompanying balance sheet.

8. COMMITMENTS AND CONTINGENCIES

Insurance

The insurance industry in Kazakhstan is at the developing stage and many forms of insurance protection common in other countries of the world are not yet generally available. The Company does not have full coverage for its plant facilities, losses caused by production stoppages, or third-party liability in respect of property or environmental damages arising from accidents or the Company’s operations. Until the Company obtains adequate insurance coverage, there is a risk that the loss or destruction of certain assets could have a material adverse effect on the Company’s operations and financial position.

Taxation

Different Kazakhstani legislation acts and norms are often unclear, contradictory, and subject to varying interpretation by different tax authorities and the Ministry of Finance of the Republic of Kazakhstan. Frequently, disagreements in opinions occur among local, regional, and national tax authorities. The current regime of imposing fines and penalties for identified violations of Kazakhstani legislation, statutes, and standards is sufficiently severe. Sanctions include confiscation of questionable amounts (for violation of currency control), as well as fines of 50% of accrued tax. The penalty rate is 22.5%. The Company considers that it has accrued or paid all applicable taxes.

Environmental Issues

The Company is subject to various environmental laws and regulations of the Republic of Kazakhstan. Management believes that the Company complies with all governmental requirements regarding environmental protection. However, there is no assurance that contingent liabilities will not arise. See Note 3 for additional information.

Litigation

The Company is involved in legal matters in the ordinary course of business. Management believes the resolution of these matters will not have a material adverse effect on the Company’s consolidated financial condition.

9. STOCKHOLDER’S EQUITY

Assets Contributed

At Inception, Sinur’s sole shareholder contributed assets with a carrying value of $5,609,605. The transaction was recorded at the shareholder’s basis in the assets as the shareholder controlled the assets prior to and after the transaction. The transaction was accounted for as a capital contribution recorded in equity.

Imputed Interest

See Note 6 for a discussion regarding imputed interest on related-party loans payable.

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Warrants

In May 2010, Geo Point entered into an agreement with a third party to provide assistance in capital raising and business advisory services for a period of one year. In connection with the agreement, Geo Point granted warrants to purchase 250,000 shares of common stock, exercisable at a $1.75 per share, which were exercisable immediately. Warrants to purchase an additional 250,000 shares may be issued upon the acceptance of a term sheet by the Company. The warrants expire five years from the date of issuance. In addition to the warrants, the Company is required to pay the third party 6% of equity capital raised, 3% of debt raised, and warrants to purchase 6% of the number of common shares purchased in the offering. In addition, if the Company is successful in an acquisition or sale transaction, it is required to pay fees ranging from 2-3% of the transaction value and $100,000.

In regards to the initial warrants to purchase 250,000 shares of common stock, Geo Point valued the warrants on the date of the agreement as the performed criteria had been met and expensed as part of Geo Point’s predecessor operations. In regards to the additional 250,000 warrants, which have a performance commitment in order to be exercised, Geo Point initially estimated that the performance period would be approximately six months. In October 2010, it was apparent that this timeline would not be reached due to the delays in closing the Sinur Oil transaction. Based on current discussions with the third party, the Company expected the performance would not be completed until at least April 2011. In March 2011, the Company determined that the performance condition would not be met due to the limited operations at the Sinur Oil plant and the inability to currently establish consistent earnings, which was limiting the ability to raise capital. Thus, at March 31, 2011, the additional 250,000 warrants were canceled and the Company ceased recording any additional expense in connection with the warrants. Previously at each reporting period, the Company determined the fair value of the warrants and amortized that value over the estimated performance period. Quarterly the performance period was reassessed and modified if necessary. During the year ended March 31, 2011, the Company recorded compensation expense of $32,000 in general and administrative expenses on the accompanying statement of operations. The warrants on March 31, 2011, were valued at $203,417 based on the Black-Scholes option-pricing method using the following assumptions: volatility of 54%, expected life of five years, risk free interest rate of 1.95%, and no dividends.

10. INCOME TAXES

Kazakh tax legislation and practice is in a state of continuous development and therefore is subject to varying interpretations and frequent changes, which may be retroactive. Further, the interpretation of tax legislation by tax authorities as applied to the transactions and activities of the Company may not coincide with that of management. As a result, tax authorities may challenge transactions, and the Company may be assessed additional taxes, penalties, and interest. Tax periods remain open to review by the tax authorities for five years. The principle of group consolidation for tax purposes does not exist in Kazakhstan. This means that the Company pays tax on all profits realized by its subsidiaries, but cannot offset the losses of other subsidiaries. These losses can only be carried forward in the same company. Management believes it has paid or accrued for all taxes that are applicable. Where practice concerning the provision of taxes is unclear, management has accrued tax liabilities based on its best estimate.

During the years ended March 31, 2012 and 2011, the provision for income taxes did not include a current provision due to the net loss in both the United States and Kazakhstan entities. The deferred tax benefit for the years ended March 31, 2012 and 2011was $477,589 and $145,586, respectively, of which a full valuation allowance was applied. As of March 31, 2012, deferred tax assets included $27,378 for accrued liabilities, $150,000 for property, plant and equipment, and $445,797 for net operating loss carryforwards for which a full valuation allowance was applied. As of March 31, 2011, deferred tax assets included $27,378 for accrued liabilities and $118,208 for net operating loss carryforwards for which a full valuation allowance was applied. The accrued liabilities are considered current.

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The Company’s statutory rate is 34%. Reconciliation of the amount of tax (benefit) that would result in applying that rate to the pretax loss is as follows for the years ended March 31, 2012 and 2011:

	March 31, 2012			March 31, 2011

Statutory tax rate		34.0	%		34.0	%
Non-deductible expenses		(0.3	)		(1.7	)
Benefit of foreign currency tax rates		(14.3	)		(14.0	)
Accruals and other		(4.8	)		(3.6	)
Valuation allowance		(14.6	)		(14.7	)
Effective tax rate		0	%		0	%

As of March 31, 2012, the Company has loss carryforwards of approximately $262,461 and $2,129,507 in the United States and Kazakhstan, respectively. Tax loss carryforwards available in the United States begin to expire in 2031, and tax loss carryforwards available in Kazakhstan begin to expire in 2014.

11. SEGMENT INFORMATION

The Company’s operating segments are organized on the basis of products and services. At March 31, 2012 and 2011, the Company had two reporting segments; environmental and engineering services (Geo Point), and refining services (Sinur). The Geo Point segment provides environmental and engineering services to the construction industry. Geo Point’s operations are located in the United States. The Sinur segment refines crude oil into diesel fuel, gasoline, and mazut, a heating oil for distribution. See Note 1 for additional information regarding the Company’s two segments. Sinur’s operations are located in Kazakhstan. The Company evaluates the performance of its segments based on net loss. The Company did not have any unallocated assets, income, and expenses in the tables presented below.

F - 18

The following is a schedule of operating activities by segment for the year ended March 31, 2012:

	Geo Point			Sinur			Consolidated
Revenues:
Refining	$	-		$	246,239		$	246,239
Environmental services		126,459			-			126,459
Total Revenues		126,459			246,239			372,698

Expenses:
Cost of refining revenues		-			551,795			551,795
Cost of environmental service revenues		38,099			-			38,099
General and administrative		195,399			414,643			610,042
Depreciation and amortization		4,000			380,107			384,107
Impairment of long lived asset		-			750,000			750,000
Total expenses		237,498			2,096,545			2,334,043

Operating loss		(111,039	)		(1,850,306	)		(1,961,345	)

Other income (expense):
Interest expense		(2,769	)		(457,364	)		(460,133	)
Total other income (expense)		(2,769	)		(457,364	)		(460,133	)

Net loss	$	(113,808	)	$	(2,307,670	)	$	(2,421,478	)

The following is a schedule of operating activities by segment for the year ended March 31, 2011:

	Geo Point			Sinur			Consolidated

Revenues:
Refining	$	-		$	964,347		$	964,347
Environmental services		90,841			-			90,841
Total Revenues		90,841			964,347			1,055,188

Expenses:
Cost of refining revenues		-			594,858			594,858
Cost of environmental service revenues		24,384			-			24,384
General and administrative		149,230			581,852			731,082
Depreciation and amortization		1,000			145,099			146,099
Total expenses		174,614			1,321,809			1,496,423

Operating loss		(83,773	)		(357,462	)		(441,235	)

Other income (expense):
Other income		-			-			-
Interest expense		(636	)		(351,265	)		(351,901	)
Total other income (expense)		(636	)		(351,265	)		(351,901	)

Net loss	$	(84,409	)	$	(708,727	)	$	(793,136	)

F - 19

The following is a schedule of assets by segment as of March 31, 2012:

	Geo Point		Sinur

Current assets	$	37,569	$	323,187
Property, Plant and Equipment, net		7,400		4,236,495
Long term assets		1,000		255,393
Total assets	$	45,969	$	4,815,075

The following is a schedule of assets by segment as of March 31, 2011:

		Geo Point		Sinur
Current assets	$	117,509	$	301,879
Property, plant, and pquipment, net		2,362		5,438,648
Long term assets		1,000		223,435
Total assets	$	120,871	$	5,963,962

The following is a schedule of revenues by geographic area for the years ended March 31, 2012 and 2011:

	Year		Year
	Ended		Ended
	March 31, 2012		March 31, 2011

United States	$	126,459	$	90,841
Kazakhstan		246,239		964,347
Total revenues	$	372,698	$	1,055,188

During the year ended March 31, 2012, all capital expenditures related to the Sinur segment.

12. SUBSEQUENT EVENT

See Note 5 regarding subsequent draw on a line of credit for $22,000.

F - 20

Attached files

RTS Oil Holdings, Inc. Reports

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