Attached files
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EX-99.3 - INTERIM FINANCIAL STATEMENTS - Blue Earth, Inc. | bblu_ex993.htm |
EX-99.4 - PRO FORMA FINANCIAL INFORMATION - Blue Earth, Inc. | bblu_ex994.htm |
EX-99.1 - FINANCIAL STATEMENTS - Blue Earth, Inc. | bblu_ex991.htm |
8-K/A - CURRENT REPORT - Blue Earth, Inc. | bblu_8ka.htm |
Exhibit 99.2
GLOBAL RENEWABLE ENERGY GROUP INC. | |||||
(A DEVELOPMENT STAGE COMPANY) | |||||
Condensed Balance Sheet | |||||
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ASSETS | |||||
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| June 30, | |||
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| 2013 | |||
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| (unaudited) | |||
CURRENT ASSETS |
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| Cash |
| $ | 221 | |
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| Total Current Assets |
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| 221 |
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| TOTAL ASSETS |
| $ | 221 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
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CURRENT LIABILITIES |
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| Accounts payable and accrued expenses |
| $ | - | |
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| Total Current Liabilities |
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| - |
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| Total Liabilities |
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| - |
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STOCKHOLDERS' EQUITY |
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| Common stock, $0.001 par value, 100,000,000 |
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| shares authorized, 4,000,000 |
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| shares issued and outstanding |
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| 4,000 | |
| Additional paid-in capital |
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| 12,928 | |
| Deficit accumulated during the development stage |
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| (16,707) | |
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| Total Stockholders' Equity |
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| 221 |
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| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 221 |
The accompanying notes are an integral part of these financial statements.
1
GLOBAL RENEWABLE ENERGY GROUP INC. | |||||
(A DEVELOPMENT STAGE COMPANY) | |||||
Condensed Statement of Operations | |||||
(unaudited) | |||||
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| From Inception | |
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| on February 21, | |
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| 2013 Through | |
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| June 30, | |
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| 2013 | |
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REVENUES |
| $ | - | ||
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OPERATING EXPENSES |
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| General and administrative |
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| 16,707 |
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| Total Operating Expenses |
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| 16,707 |
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OPERATING LOSS |
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| (16,707) | ||
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PROVISION FOR INCOME TAXES |
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| - | ||
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NET LOSS |
| $ | (16,707) | ||
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BASIC LOSS PER COMMON SHARE |
| $ | (0.01) | ||
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WEIGHTED AVERAGE NUMBER OF |
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COMMON SHARES OUTSTANDING |
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| 1,413,698 |
The accompanying notes are an integral part of these financial statements.
2
GLOBAL RENEWABLE ENERGY GROUP INC. | |||||||||||||
(A DEVELOPMENT STAGE COMPANY) | |||||||||||||
Condensed Statement of Stockholders' Equity | |||||||||||||
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| Deficit |
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| Accumulated |
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| Additional |
| During the |
| Total | |||
| Common Stock |
| Paid-In |
| Development |
| Stockholders' | ||||||
| Shares |
| Amount |
| Capital |
| Stage |
| Equity | ||||
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Balance, February 21, 2013 | - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
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Common stock issued for cash at |
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$0.001 per share (unaudited) | 4,000,000 |
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| 4,000 |
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| - |
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| - |
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| 4,000 |
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Contributed capital from expenses |
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paid by shareholder (unaudited) | - |
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| - |
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| 12,928 |
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| - |
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| 12,928 |
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Net loss for the period ended |
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June 30, 2013 (unaudited) | - |
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| - |
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| - |
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| (16,707) |
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| (16,707) |
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Balance, June 30, 2013 (unaudited) | 4,000,000 |
| $ | 4,000 |
| $ | 12,928 |
| $ | (16,707) |
| $ | 221 |
The accompanying notes are an integral part of these financial statements.
3
GLOBAL RENEWABLE ENERGY GROUP INC. | ||||||
(A DEVELOPMENT STAGE COMPANY) | ||||||
Condensed Statement of Cash Flows | ||||||
(unaudited) | ||||||
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| From Inception | ||||
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| on February 21, | ||||
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| 2013 Through | ||||
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| June 30, | ||||
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| 2013 | ||||
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OPERATING ACTIVITIES |
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| Net loss |
| $ | (16,707) | ||
| Adjustments to Reconcile Net Loss to Net |
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| Cash Used by Operating Activities: |
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| - | ||
| Changes in operating assets and liabilities: |
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| Accounts payable and accrued expenses |
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| - | |
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| Net Cash Used in Operating Activities |
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| (16,707) |
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INVESTING ACTIVITIES |
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| - | |||
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FINANCING ACTIVITIES |
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| Contributed capital from expenses paid by shareholder |
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| 12,928 | |
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| Issuance of common stock for cash |
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| 4,000 | |
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| Net Cash Provided by Financing Activities |
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| 16,928 |
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| NET INCREASE IN CASH |
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| 221 | |
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| CASH AT BEGINNING OF PERIOD |
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| - | |
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| CASH AT END OF PERIOD |
| $ | 221 | |
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SUPPLEMENTAL DISCLOSURES OF |
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| CASH FLOW INFORMATION |
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| CASH PAID FOR: |
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| Interest |
| $ | - | |
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| Income taxes |
| $ | - |
The accompanying notes are an integral part of these financial statements.
4
GLOBAL RENEWABLE ENERGY GROUP INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
June 30, 2013
NOTE 1 - NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Business Activities
Global Renewable Energy Group Inc., (the Company), was incorporated under the laws of the State of Nevada on February 21, 2013. The Company designs and develops alternative power sources for agricultural processors.
Accounting Basis
The basis is accounting principles generally accepted in the United States of America. The Company has adopted a December 31 fiscal year end.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed principally on the straight-line method over the estimated useful lives of the assets. The useful lives of the Companys property and equipment ranges from 5 to 7 years.
Concentrations of Risk
The Companys bank accounts are held by insured institutions. The funds are insured up to $250,000. At June 30, 2013, the Companys bank deposits did not exceed the insured amounts.
Accounts Receivable
The Companys accounts receivable are net of the allowance for estimated doubtful accounts of $-0- as of June 30, 2013. The allowance for doubtful accounts reflects managements best estimate of probable losses inherent in the accounts receivable balance.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Advertising Expense
In accordance with ASC 720, the Company expenses all costs of advertising as incurred. During the period ended June 30, 2013 the Company incurred $-0- of advertising expense.
5
GLOBAL RENEWABLE ENERGY GROUP INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
June 30, 2013
NOTE 1 - NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Stock-based Compensation
The Company follows the provisions of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock-based compensation.
Revenue Recognition
The Company generates revenues from professional services contracts. Customers are billed, according to individual agreements. Revenues from professional services are recognized on a completed-contract basis, in accordance with ASC Topic 605-35, Construction-Type and Production-Type Contracts. Under the completed-contract basis, contract costs are recorded to a deferred asset account and billings and/or cash received are recorded to a deferred revenue liability account during the periods of construction. Costs include direct material, direct labor and subcontract labor. All revenues, costs, and profits are recognized in operations upon completion of the contract. A contract is considered complete when all costs except insignificant items have been incurred and final acceptance has been received from the customer. Corporate general and administrative expenses are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as incurred.
For uncompleted contracts, the deferred asset (accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified under current assets as Costs in excess of billings on uncompleted contracts. The deferred liability (billings and/or cash received) in excess of the deferred asset (accumulated contract costs) is classified under current liabilities as Billings in excess of costs on uncompleted contracts. Contract retentions are included in accounts receivable.
Taxes
The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Research and Development
Research and development costs are charged to operations as they are incurred. Legal fees and other direct costs incurred in obtaining and protecting patents are expensed as incurred. The Company incurred research and development expenses of $-0- during the period ended June 30, 2013.
Unaudited Financial Statements
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2013, and for all periods presented herein, have been made.
6
GLOBAL RENEWABLE ENERGY GROUP INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
June 30, 2013
NOTE 1 - NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The results of operations for the periods ended June 30, 2013 are not necessarily indicative of the operating results for the full year.
Recent Accounting Pronouncements
No recent accounting standards or interpretations issued or recently adopted are expected to have a material impact on the Companys financial position, operations or cash flows.
NOTE 2 - GOING CONCERN
The Companys financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs which raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Managements plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - STOCKHOLDERS EQUITY
During the period ended June 30, 2013 the Company issued 4,000,000 shares of common stock to the founders. During the period ended June 30, 2013 a shareholder of the Company contributed $12,928 of capital through the payment of expenses on the Companys behalf. The Company has considered the value of contributed services pursuant to SAB Topic 5T and has determined that the value of those services is not material to the financial statements.
NOTE 4 - INCOME TAXES
The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. The net deferred tax asset generated by the loss carry-forward has been fully reserved.
7
GLOBAL RENEWABLE ENERGY GROUP INC.
(A Development Stage Company)
Notes to the Unaudited Condensed Financial Statements
June 30, 2013
NOTE 4 - INCOME TAXES (CONTINUED)
Deferred tax assets consist of the following components as of June 30, 2013:
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Deferred tax asset |
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| $ | 5,847 |
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Valuation allowance |
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| (5,847 | ) |
Net deferred tax asset |
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| $ | - |
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The Company has accumulated net operating loss carryovers of approximately $16,707 of June 30, 2013 which are available to reduce future taxable income. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The tax losses begin to expire in 2033. Fiscal year 2013 remains open to examination by federal tax authorities and other tax jurisdictions.
NOTE 5 - SUBSEQUENT EVENTS
As of July 15, 2013, the Company and its stockholders simultaneously entered into and completed an Agreement and Plan of Merger (the Agreement) dated as of July 15, 2013, with Blue Earth Inc. (BBLU), IPS Power Engineering, Inc. (IPS) and the Stockholders of IPS (the Acquisitions). BBLU is an energy efficiency and alternative energy company and IPS is an affiliated renewable energy company, which companies specialize in the combined heat and power (CHP) alternative energy space. The Company plans to build seven power plants and sell the thermal and electric power generated to one large customer and to local utilities through long-term power purchase agreements. Pursuant to the terms of the Agreement, an aggregate of 15,550,000 shares of BBLU Common Stock (the Merger Consideration) was issued to the former stockholders of the Company and IPS (the Stockholders). The Merger Consideration was determined by the parties based on the mutually agreed upon future revenues and earnings forecast prepared by management of the Company and IPS. The Merger Consideration consists of: 5,000,000 BBLU shares issued at closing to the Stockholders, which vested immediately but are subject to lock-up agreements; 50,000 BBLU shares issued as a finders fees (plus an additional 100,000 shares which are issuable); and 10,500,000 BBLU shares issued at closing to the Stockholders, and held in escrow, and which will vest at the rate of 1,500,000 BBLU shares per Initial Project (as defined) on the date that each of the Initial Projects or substituted similar value as mutually agreed to by BBLU and the Company, commences producing commercial power. The 10,500,000 BBLU shares will be released, pro rata, from escrow upon the commercial operation date of each Initial Project, however, subject to the terms and conditions of the Lock-Up Agreements.
In accordance with ASC 855-10, the Companys management reviewed all material events through the date these consolidated financial statements were issued and there are no additional material subsequent events to report other than those reported.
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