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EX-31.1 - EXHIBIT 31.1 - GreenPlex Services, Inc.ex311apg.htm
EX-32.1 - EXHIBIT 32.1 - GreenPlex Services, Inc.ex321apg.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[   ]

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

[ X ]

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from January 1, 2013 to  February 28, 2013.


000-54046

(Commission file number)

[grpx10q_022813002.gif]

GREENPLEX SERVICES, INC.

(Exact name of small business issuer as specified in its charter)


Nevada

20-0856924

208-591-3281

(State or other jurisdiction

(IRS Employer

(Registrant’s telephone number)

of incorporation or organization)

Identification No.)

 

 

2525 E. 29th Ave. Ste. 10-B

Spokane, WA 99223

(Address of principal executive offices)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]   No [   ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X]   No [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer [  ]

Accelerated filer [  ] 

Non-accelerated filer [  ] 

Smaller reporting company [X]

(Do not check if a smaller reporting company)

 


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]


Number of shares outstanding of the issuer’s common stock as of February 22, 2013: 2,624,777 shares



 



TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

 

Item 1.

Financial Statements

3

 

Balance Sheets at February 28, 2013 (Unaudited) and December 31, 2012

3

 

Statements of Operations for the Two Months Ended February 28, 2013 and February 29, 2012 and for the Three Months Ended March 31, 2012 (Unaudited)

4

 

Statements of Cash Flows for the Two Months Ended February 28, 2013 and February 29, 2012 for the Three Months Ended March 31, 2012  (Unaudited)

5

 

Notes to the Financial Statements (Unaudited)

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

20

Item 4.

Controls and Procedures

20

 

 

PART II – OTHER INFORMATION

 

Item 1.

Legal Proceedings

20

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

20

Item 3.

Defaults Upon Senior Securities

20

Item 4.

Mine Safety Disclosure [Not Applicable]

20

Item 5.

Other Information

20

Item 6.

Exhibits

20

 

 

 

Signatures

 

21




- 2 -



PART I – FINANCIAL INFORMATION


Item1. Financial Statements


GreenPlex Services, Inc.

 Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

February 28, 2013

 

December 31, 2012

Assets

(Unaudited)

 

 

Current Assets

 

 

 

 

Cash

$

1,872 

 

$

1,973 

 

Accounts receivable

1,040 

 

1,891 

 

Prepaid expenses

1,000 

 

1,000 

 

 

Total Current Assets

3,912 

 

4,864 

 

 

 

 

 

 

 

Landscaping Equipment

 

 

 

 

Landscaping equipment

25,921 

 

25,921 

 

Less: accumulated depreciation

(18,032)

 

(17,077)

 

 

Landscaping Equipment, net

7,889 

 

8,844 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

11,801 

 

$

13,708 

 

 

 

 

 

 

 

Liabilities and Stockholders' Deficit

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable

$

13,641 

 

$

12,486 

 

Accrued expenses

 

185 

 

Notes payable

3,000 

 

 

Sales tax payable

869 

 

869 

 

Accrued payroll liabilities

 

3,640 

 

 

Total Current Liabilities

17,510 

 

17,180 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

17,510 

 

17,180 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

Common stock, $0.001 par value, 75,000,000 shares authorized,

 

 

 

 

2,624,777 issued and outstanding

2,625 

 

2,625 

 

Additional paid-in capital

142,766 

 

142,766 

 

Accumulated deficit

(151,100)

 

(148,863)

 

 

Total Stockholders' Equity (Deficit)

(5,709)

 

(3,472)

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity (Deficit)

$

11,801 

 

$

13,708 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements




- 3 -




GreenPlex Services, Inc.

Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Two Months

 

For the Two Months

 

For the Three Months

 

 

 

 

Ended

 

Ended

 

Ended

 

 

 

 

February 28, 2013

 

February 29, 2012

 

March 31, 2012

 

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Revenues

$

 

$

 

$

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

Professional fees

1,155 

 

(982)

 

3,295 

 

Payroll expenses

 

475 

 

475 

 

Depreciation

955 

 

955 

 

1,319 

 

General and administrative

105 

 

1,111 

 

1,137 

 

 

Total Operating Expenses

2,215 

 

1,559 

 

6,226 

 

 

 

 

 

 

 

 

 

Loss From Operations

(2,215)

 

(1,559)

 

(6,226)

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

Interest expense

(22)

 

 

(138)

 

 

 

 

 

 

 

 

 

Loss Before Income Tax Provision

(2,237)

 

(1,559)

 

(6,364)

Income Tax Provision

 

 

 

 

 

 

 

 

 

 

 

Net Loss

$

(2,237)

 

$

(1,559)

 

$

(6,364)

 

 

 

 

 

 

 

 

 

Net Loss per Common Share - Basic and Diluted

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic and Diluted

2,624,777 

 

1,817,500 

 

1,817,500 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements




- 4 -




GreenPlex Services, Inc.

Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Two Months

 

For the Two Months

 

For the Three Months

 

 

 

 

Ended

 

Ended

 

Ended

 

 

 

 

February 28, 2013

 

February 29, 2012

 

March 31, 2012

 

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Cash Flow from Operating Activities

 

 

 

 

 

Net Loss

$

(2,237)

 

$

(1,559)

 

$

(6,364)

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation expense

955 

 

955 

 

1,319 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

851 

 

632 

 

(1,000)

 

 

Prepaid expenses

 

(1,000)

 

632 

 

 

Accrued expenses

(185)

 

 

138 

 

 

Accounts payable

1,155 

 

(582)

 

3,695 

 

 

Deferred Revenue

 

 

5,438 

 

 

Accrued payroll liabilities

(3,640)

 

(1,838)

 

(1,839)

Net Cash Used in Operating Activities

(3,101)

 

(3,392)

 

2,019 

 

 

 

 

 

 

 

 

 

Cash Flow from Financing Activities

 

 

 

 

 

 

Proceeds from short term notes

3,000 

 

2,500 

 

2,500 

Net Cash Provided by Financing Activities

3,000 

 

2,500 

 

2,500 

 

 

 

 

 

 

 

 

 

Net Change in Cash

(101)

 

(892)

 

4,519 

Cash, Beginning of Period

1,973 

 

1,353 

 

1,353 

Cash, End of Period

$

1,872 

 

$

461 

 

$

5,872 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

Interest paid

$

 

$

 

$

 

Income tax paid

$

 

$

 

$

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements




- 5 -



GreenPlex Services, Inc.

February 28, 2013 and December 31, 2012

Notes to the Financial Statements

(Unaudited)


Note 1 - Organization and Operations

 

GreenPlex Services, Inc. (“GreenPlex” or the “Company”) was incorporated on September 2, 2009 under the laws of the State of Nevada for the purpose of serving both residential and commercial customers in the greater Spokane and Coeur d’Alene area. Its services include (i) all aspects of lawn care, tree and shrub maintenance, landscape maintenance and a multiphase pest and insect control program and (ii) sales representation of certain synthetic turf products and installation services in the geographic area of Eastern Washington and Northern Idaho. The Company is committed to a “Green Philosophy” and where feasible, utilizing organic and socially responsible products, such as fertilizer and pesticides.

 

Note 2 - Summary of Significant Accounting Policies


Basis of Presentation

 

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 10, 2013.


Use of Estimates and Assumptions


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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.


The Company’s significant estimates include the fair value of financial instruments; the carrying value and recoverability of long-lived assets, including the values assigned to and estimated useful lives of landscaping equipment; income taxes provision and valuation allowance of deferred tax assets; and the assumption that the Company will continue as a going concern.  Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.


Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.


Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly.


Actual results could differ from those estimates.


Fair Value of Financial Instruments


The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.



- 6 -



GAAP), and expands disclosures about fair value measurements.  To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:


Level 1

 

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

 

 

Level 2

 

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

 

 

Level 3

 

Pricing inputs that are generally observable inputs and not corroborated by market data.


Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.


The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.


The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, sales tax payable, and accrued payroll liabilities approximate their fair value because of the short maturity of those instruments.


Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.


It is not, however, practical to determine the fair value of advances from stockholders, if any, due to their related party nature.


Carrying Value, Recoverability and Impairment of Long-Lived Assets


The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets.  The Company’s long-lived assets, which include landscaping equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.


The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.


The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes.  The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.


The impairment charges, if any, are included in operating expenses in the accompanying statements of operations.




- 7 -



Fiscal Year End


On December 21, 2012, the Board of Directors of the Company passed a resolution to change the Company's fiscal year end date from December 31 to November 30, effective upon approval of the majority stockholders, which was ratified by the majority of the stockholders of the Company as part of the proxy vote related to the Company's 2012 Annual meeting held on December 21, 2012.  The Company is filing this transitional quarterly report for the two (2) months ending February 28, 2013, and then will file periodic quarterly reports based on the November 30 fiscal year end date schedule.


Pro Forma Financial Information (Unaudited)


The unaudited pro forma financial statements included in the accompanying statements of operations and the statements of cash flows present the financial statements which would have been as if the Company had November 30 as its fiscal year as of the beginning of the first date presented.


Cash Equivalents


The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.


Accounts Receivable and Allowance for Doubtful Accounts


Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts.  The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any.


Outstanding account balances are reviewed individually for collectability.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  There was no allowance for doubtful accounts at February 28, 2013 or February 29, 2012.


The Company does not have any off-balance-sheet credit exposure to its customers.


Landscaping Equipment


Landscaping equipment is recorded at cost. Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred. Depreciation of landscaping equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of either three (3) or five (5) years.  Upon sale or retirement of landscaping equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.


Related Parties


The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.


Pursuant to Section 850-10-20 the Related parties include a. affiliates of the Company; b.  Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.  Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.


The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in



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those statements. The disclosures shall include: a. the nature of the relationship(s) involvedb.  description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. mounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.


Commitments and Contingencies


The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.  The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.


If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements.  If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.


Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.  Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.


Revenue Recognition


The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.


The Company derives its revenues from sales contracts with customers with revenues being generated when services are rendered.  Persuasive evidence of an arrangement is demonstrated via invoice and service agreement, service rendering is evidenced by a signed service application form by the service technician; the sales price to the customer is fixed upon signing of the service agreement and there is no separate sales rebate, discount, or volume incentive.  


Stock-Based Compensation for Obtaining Employee Services


The Company accounts for its stock based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum ("PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.


The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-



- 9 -



pricing valuation model.  The ranges of assumptions for inputs are as follows:


·

Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding.  Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

 

·

Expected volatility of the entitys shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

 

·

Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Companys current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.

 

·

Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.


The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.


Income Tax Provision


The Company accounts for income taxes under paragraph 710-10-30-2 of the FASB Accounting Standards Codification.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.


The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”).  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%)



- 10 -



likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.


The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.


Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.


Uncertain Tax Positions


The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the two months ended February 28, 2013 or the two months ended February 29, 2012.


Net Income (Loss) per Common Share


Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.


There were no potentially dilutive shares outstanding for the two months ended February 28, 2013, or the two months ended February 29, 2012.


Cash Flows Reporting


The Company has adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-24 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.


Subsequent Events


The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.


Recently Issued Accounting Pronouncements


FASB Accounting Standards Update No. 2011-08


In September 2011, the FASB issued the FASB Accounting Standards Update No. 2011-08 “Intangibles—Goodwill and Other: Testing Goodwill for Impairment” (“ASU 20112012-08”). This Update is to simplify how public and nonpublic entities test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine



- 11 -



whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.


The guidance is effective for interim and annual periods beginning on or after December 15, 2011. Early adoption is permitted.


FASB Accounting Standards Update No. 2011-11


In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.


The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.


FASB Accounting Standards Update No. 2012-02


In July 2012, the FASB issued the FASB Accounting Standards Update No. 2012-02 “Intangibles—Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”).


This Update is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. This guidance builds upon the guidance in ASU 2011-08, entitled Testing Goodwill for Impairment. ASU 2011-08 was issued on September 15, 2011, and feedback from stakeholders during the exposure period related to the goodwill impairment testing guidance was that the guidance also would be helpful in impairment testing for intangible assets other than goodwill.  


The revised standard allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired.


This Update is effective for annual and interim impairment tests performed in fiscal years beginning after September 15, 2012.  Earlier implementation is permitted.


Other Recently Issued, but Not Yet Effective Accounting Pronouncements


Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.


Note 3 – Going Concern


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.


As reflected in the accompanying financial statements, the Company had an accumulated deficit at February 28, 2013, and had a net loss and net cash used in operating activities for the interim period then ended, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern.


While the Company is attempting to generate sufficient revenues, the Company’s cash position may not be sufficient enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern.  While the



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Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues.


The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


Note 4 – Landscaping Equipment


Landscaping equipment stated at cost, less accumulated depreciation consisted of the following:


 

Estimated Useful Lives (Years)

 

February 28,

2013

 

 

December 31,

2012

 

 

 

 

 

 

 

 

 

 

 

Landscaping equipment

3-5

 

$

25,921 

 

 

$

25,921 

 

Less accumulated depreciation

 

 

 

(18,032)

 

 

 

(17,077)

 

 

 

 

$

7,889 

 

 

$

8,844 

 


Depreciation Expense


Depreciation expense is included in the statements of operations.  Depreciation expense was $955 and $955 for the two months ended February 28, 2013 or the two months ended February 29, 2012, respectively.


Note 5 - Notes Payable


On January 28, 2011 a non-interest bearing note payable was signed with a third-party for the principal amount of $1,652 maturing 180 days from the date of signing and subsequently extended to December 31, 2012.


On April 7, 2011 a note payable was signed with a third-party for the principal amount of $2,500 maturing 180 days from the date of signing, with interest at 6% per annum. This maturity date on this note was subsequently extended to December 31, 2012. Accrued interest on this note was $261 at December 31, 2012.


On August 18, 2011 a note payable was signed with a third-party for the principal amount of $5,000 maturing 180 days from the date of signing, with interest at 6% per annum. This maturity date on this note was subsequently extended to due December 31, 2012. Accrued interest on this note was $412 at December 31, 2012.


On January 17, 2012 a note payable was signed with a third-party for the principal amount of $500 maturing September 30, 2012, with interest at 6% per annum. This maturity date on this note was subsequently extended to due December 31, 2012. Accrued interest on this note was $29 at December 31, 2012.


On January 30, 2012 a note payable was signed with a third-party for the principal amount of $2,000 maturing September 30, 2012, with interest at 6% per annum. This maturity date on this note was subsequently extended to due December 31, 2012.  Accrued interest on this note was $110 at December 31, 2012.


On April 27, 2012 a non-interest bearing note payable was signed with a third-party for the principal amount of $2,000 maturing September 30, 2012. The maturity date on this note was subsequently extended to December 31, 2012.


On May 17, 2012 a non-interest bearing note payable was signed with a third-party for the principal amount of $2,500 maturing September 30, 2012. The maturity date on this note was subsequently extended to December 31, 2012.


On July 16, 2012 a note payable was signed with a third-party for the principal amount of $1,000 maturing December 31, 2012.  Accrued interest on this note was $28 at December 31, 2012.


On December 12, 2012 a note payable was signed with a third-party for the principal amount of $1,000 with no interest thereon and an maturity date of March 31, 2013.  


On December 28, 2012 a note payable was signed with a third-party for the principal amount of $2,500 with no interest thereon and an maturity date of March 31, 2013.  




- 13 -



On December 31, 2012, the above note holders converted the principal outstanding on the above notes of $19,652 and accrued interest of $840, totaling $20,491 into common shares of the Company at $0.04 per share for an aggregate of 512,277 shares.


On February 26, 2013, a note payable was signed with a third-party for the principal amount of $3,000 with no interest thereon and an maturity date of December 31, 2013.


Note 6 – Related Party Transactions


Due to Related Party - Chief Executive Officer


On May 18, 2011 a short term related party note payable was signed with the Chief Executive Officer, for the principal sum of $800 with no interest thereon and an original maturity date of November 14, 2011. This note has subsequently been extended to December 31, 2012.


On September 8, 2011 a short term related party note payable was signed with the Chief Executive Officer, for the principal sum of $1,000 with no interest thereon and an original maturity date of December 5, 2011. This note has subsequently been extended to December 31, 2012.


On September 10, 2011 a short term related party note payable was signed with the Chief Executive Officer, for the principal sum of $2,000 with no interest thereon and an original maturity date of December 7, 2011. This note has subsequently been extended to December 31, 2012.


On December 31, 2012, the Chief Executive Officer converted his advances of $3,800 to common shares of the Company at $0.04 per share for a total of 95,000 shares.


Note 7 – Commitment and Contingencies


Employment Agreement


Effective April 1, 2013 the Company entered into an employment agreement with Mr. Jefferson expiring November 15, 2013 and agreed to pay him $36,000 per year, payable as specified in his previous contract. Without cause, the Company may terminate this agreement at any time upon 14 days written notice to the Employee.


Effective April 1, 2013, the Company enters into an employment agreement with a part time employee expiring November 15, 2013 and agreed to pay him $12 per hour for 20 hours a week. Without cause, the Company may terminate this agreement at any time upon 14 days written notice to the Employee.


Note 8 – Stockholders’ Equity (Deficit)


Issuance of Common Stock


In February 2011, the Company sold 125,000 shares of its common stock to one investor at $0.08 per share for $10,000 cash.


In March 2011, the Company sold 62,500 share of its common stock to one investor at $0.08 per share for $5,000 cash.


On April 5, 2012, the Company sold 200,000 shares of its restricted common stock to one non-affiliated investor at $0.05 per share for $10,000 in cash.


On December 31, 2012, four (4) note holders converted all of the principal balance of their outstanding notes and related accrued interest, totaling $20,491.10, into common shares of the Company at $0.04 per share for an aggregate of 512,277 shares.


On December 31, 2012, the Chief Executive Officer converted the entire balances of his advances to the Company of $3,800 into common shares of the Company at $0.04 per share for an aggregate of 95,000 shares.




- 14 -



Stock Options


The Company’s board of directors approved the adoption of the “Non-Qualified Stock Option and Stock Appreciation Rights Plan” by unanimous consent on September 4, 2009 (“2009 Stock Option Plan”).  This plan was initiated to encourage and enable officers, directors, consultants, advisors and other key employees of the Company to acquire and retain a proprietary interest in the Company by ownership of its common stock.  1,000,000 shares of the Company’s common stock were authorized under the 2009 Stock Option Plan.


The Board of Directors did not grant the issuance of any non-statutory stock options from the Company’s Non-Qualified Stock Option Plan for the period from September 2, 2009 (inception) through February 28, 2013.


Note 8 – Pro Forma Financial Statements


The unaudited pro forma financial statements included below presents the Company’s statements of operations and cash flows which would have been as if the Company had November 30 as its fiscal year as of the beginning of the first date presented.


GreenPlex Services, Inc.

Statements of Operations

Pro Forma

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended

 

 

 

 

February 28, 2013

 

February 29, 2012

Revenues

$

 

$

887 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

Professional fees

1,734 

 

3,302

 

Payroll expenses

87 

 

1,916

 

Depreciation

2,386 

 

1,432

 

General and administrative

774 

 

1,527

 

 

Total Operating Expenses

4,981 

 

8,177

 

 

 

 

 

 

 

Loss From Operations

(4,981)

 

(7,290)

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

Interest expense

(455)

 

(143) 

 

 

 

 

 

 

 

Loss Before Income Tax Provision

(5,436)

 

(7,433)

Income Tax Provision

 

 

 

 

 

 

 

 

Net Loss

$

(5,436)

 

$

(7,433)

 

 

 

 

 

 

 

Net Loss per Common Share - Basic and Diluted

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic and Diluted

2,624,777 

 

1,817,500 

 

 

 

 

 

 

 




- 15 -




GreenPlex Services, Inc.

Statements of Cash Flows

Pro Forma

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended

 

 

 

 

February 28, 2013

 

February 29, 2012

Cash Flow from Operating Activities

 

 

 

Net Loss

$

(5,436)

 

$

(7,433)

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation expense

2,386 

 

1,431 

 

Accrued interest

897 

 

143 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

4,699 

 

823 

 

 

Prepaid expenses

 

(1,000)

 

 

Accrued expenses

-

 

3,150 

 

 

Accounts payable

(22,692)

 

859

 

 

Deferred Revenue

 

 

 

Accrued payroll liabilities

(3,593)

 

(1,168)

Net Cash Used in Operating Activities

(25,493)

 

(3,195)

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

Net Cash Used in Investing Activities

 

 

 

 

 

 

 

 

Cash Flow from Financing Activities

 

 

 

 

Forgiveness of debt

24,291 

 

 

Proceeds from short term notes

3,000 

 

Net Cash Provided by Financing Activities

27,291 

 

-

 

 

 

 

 

 

 

Net Change in Cash

1,798)

 

(3,195)

Cash, Beginning of Period

74 

 

3,655 

Cash, End of Period

$

1,872 

 

$

460 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

Interest paid

$

 

$

 

Income tax paid

$

 

$

 

 

 

 

 

 

 

Non-Cash Investing and Financing Transactions

 

 

 

 

Common stock issued for interest

$

 

$

 

 

 

 

 

 

 



- 16 -




Note 9 – Subsequent Events


The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent events to be disclosed as followed:


On March 22, 2013, a non-interest bearing note payable was signed with an independent third-party for the principal amount of $3,000 maturing on December 31, 2013.




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


CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS


THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVES A HIGH DEGREE OF RISK AND UNCERTAINTY. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACTS, INCLUDED IN OR INCORPORATED BY REFERENCE INTO THIS FORM 10-Q ARE FORWARD-LOOKING STATEMENTS. IN ADDITION, WHEN USED IN THIS DOCUMENT, THE WORDS “ANTICIPATE,” “ESTIMATE,” “PROJECT,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS DUE TO RISKS AND UNCERTAINTIES THAT EXIST IN OUR OPERATIONS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS INCLUDING AMONG OTHERS, THE RISK THAT OUR PRODUCT DEVELOPMENT PROGRAMS WILL NOT PROVE SUCCESSFUL, THAT WE WILL NOT BE ABLE TO OBTAIN FINANCING TO COMPLETE ANY FUTURE PRODUCT DEVELOPMENT, THAT OUR PRODUCTS WILL NOT PROVE COMPETITVE IN THEIR MARKETS. THESE RISKS AND OTHERS ARE MORE FULLY DESCRIBED IN OUR ANNUAL REPORT ON FORM 10-K FOR OUR FISCAL YEAR ENDED DECEMBER 31, 2011.  SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED OR PROJECTED.


ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS INCLUDED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GIVE ANY ASSURANCES THAT THESE EXPECTATIONS WILL PROVE TO BE CORRECT. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS TO SUCH FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.


The following discussion should be read in conjunction with the condensed Financial Statements and the Notes included in Item 1 of Part I in this Quarterly Report on Form 10-Q, the audited Financial Statements and Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2012.


General


GreenPlex Services, Inc. (“GreenPlex” or "we, us”) was organized under the laws of the State of Nevada on September 2, 2009.  Greenplex was organized for the express purpose of providing landscape and exterior property management services and landscape product sales to residential, industrial, and commercial customers throughout areas of Western Washington State and Northern Idaho.  Our services include all aspects of lawn care, tree and shrub installation and maintenance, landscape creation and maintenance, consumer greenhouse and compost center setup, synthetic grass installation, wildfire risk assessment, and a multiphase pest and insect control program.  We are committed to a “Green Philosophy” and where feasible we utilize organic, non-toxic, and socially responsible products, such as fertilizers and pesticides.   In the event our business model is successful, we plan to undertake in the future a franchise opportunity program after a feasibility evaluation, according to our business plan, is completed and found to be reasonable.


Results of Operations


Revenue for the two months ended February 28, 2013 was zero as compared to zero for the same period in the prior year.  This absence of revenue is due to the seasonality of our business.  We expect next quarter's revenue to be approximately $13,000 based off of previous year financials, due to the seasonal upstart of our business.


Operating expenses for the two months ended February 28, 2013,  and  February 29, 2012 were $2,215 and $1,559, respectively.  These figures were similar in both periods..  We expect our next quarter's operating expenses to increase substantially form payroll due to the seasonality of our business.


Liquidity and Capital Resources




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We have financed our operations primarily from the proceeds from private placements of our common stock, the issuance of promissory notes, and revenue from our operations.


As of February 28, 2013, we had $1,872 in cash and we had one note payable with a third party in the principal amount of $3,000, accruing no interest and due on December 31, 2013.  We do not have the cash to repay this debt and unless we can extend the maturity date of these promissory notes and if we cannot raise sufficient funds in private placements, we may default on part or all of our debt.  We do not have any available lines of credit.  We do not have any available lines of credit.  Since inception we have financed our operations from private placements of equity securities.  Our recent cash burn rate in our operations over the year ended 2012 has been approximately $1,200 per month.  We expect that that cash burn rate will stay somewhat constant until revenues increase.  Given this recent rate of use of cash in our operations, we do not have sufficient capital to carry on operations past May 2013.  Our long term capital requirements and the adequacy of our available funds will depend on many factors, including the reporting company costs, public relations fees, and operating expenses, among others.  If we are unable to raise additional capital, generate sufficient revenue, or receive loans from the officers on an as needed basis, we will have to curtail or cease our operations.


Net cash used in operating activities for the two months ended February 28, 2013 was $3,101.  We expect this to increase substantially next quarter due to the seasonality of our business and the resulting payroll of our two seasonal employees.


Net cash provided by financing activities for the two months ended February 28, 2013 was $3,000.


We plan to finance our needs principally from the following:


 

·

Revenue from operations.

 

·

Issuance of convertible promissory notes and warrants.

 

·

Equity private placement stock offerings.


We do not have sufficient capital to carry on operations past May 2013, but we plan to raise at least $30,000 in additional capital in an equity private placement offering to secure the funds needed to finance our plan of operation for at least the next twelve months.  However, there may be changes that could consume available resources before such time.


We are pursuing potential equity financing and also other collaborative arrangements that may generate additional capital for us.  We cannot assure you that we will generate sufficient additional capital or revenues, if any, to fund our operations beyond May 2013, that any future equity financings will be successful, or that other potential financings through bank borrowings, debt or equity offerings, or otherwise, will be available on acceptable terms or at all.  If we cannot reschedule our debt or raise funds to repay it before December 31, 2013, we will default on that debt and may have to cease operations.


Our continued operations are dependent on our ability to obtain financing and upon our ability to achieve future profitable operations from the development of our business model.  Our independent registered public accounting firm issued its audit report for our fiscal year ended December 31, 2012 including an explanatory paragraph as to an uncertainty with respect to our ability to continue as a going concern.  If we are not able to continue as a going concern, it is likely investors will lose their investment.



- 19 -



Critical Accounting Policies


See Notes to the Financial Statements.


Recently Issued Accounting Pronouncements


Refer to Note 2 in the accompanying  interim financial statements.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk


Not required


Item 4.  Controls and Procedures


Evaluation of Disclosure Controls and Procedures


In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of February 28, 2013.  Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were ineffective as of February 28, 2013.


Changes in Internal Control Over Financial Reporting


As of February 28, 2013, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended February 28, 2013 that materially affected, or are reasonably likely to materially affect, our company’s internal control over financial reporting.



PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings


None.


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


None.


Item 3.  Defaults Upon Senior Securities


Not applicable.


Item 4.   Mine Safety Disclosure


Not Applicable


Item 5.  Other Information


None.


Item 6.  Exhibits 


Exhibit Number

Description of Exhibit

31.1

Certification of Principal Executive Officer and Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Principal Executive Officer and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



- 20 -



SIGNATURES


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



 

GREENPLEX SERVICES, INC.

 

 

April 22, 2013

By:  

/s/ Kyle W. Carlson

 

Kyle W. Carlson

Chief Executive Officer, Chief Financial Officer, President, and Treasurer

(Principal Executive and

Principal Financial and Accounting Officer)




- 21 -