Financial Statements
GIRASOLAR, INC.
UNAUDITED INTERIM FINANCIAL STATEMENTS
September, 2007
GiraSolar, Inc. | |||||
Consolidated Balance Sheets | |||||
(Unaudited) | (Audited) | ||||
September 30, | December 31, | ||||
2007 | 2006 | ||||
Assets | |||||
Current assets | |||||
| Cash | $ | 297,475 | $ | 861,574 |
Accounts receivable, net | 903,411 | 4,720,686 | |||
Inventory | 1,785,638 | 738,879 | |||
Prepayments | 1,311,007 | 409,107 | |||
Investments, held for resale | 2,698 | 2,502 | |||
Total current assets | 4,300,229 | 6,732,748 | |||
Furniture and vehicles, net | 27,279 | 24,249 | |||
Goodwlll | 3,334,625 | 3,334,625 | |||
Customer list, net | 1,966,220 | 2,329,810 | |||
Due from related parties | 432,564 | 426,854 | |||
Tax refunds receivable | 204,386 | 63,414 | |||
Other receivables | 402,447 | 29,423 | |||
Total assets | $ | 10,667,750 | $ | 12,941,123 | |
GiraSolar, Inc, | |||||
Consolidated Balance Sheets (continued) | |||||
(Unaudited) | (Audited) | ||||
September 30, | December 31, | ||||
2007 | 2006 | ||||
Liabilities and stockholders' equity | |||||
Current liabilities | |||||
Bank overdraft | $ | 551,720 | $ | --- | |
Notes payable | 1,293,263 | 1,422,298 | |||
Current derivative liability | 262,475 | 82,817 | |||
Accounts payable | 356,821 | 390,085 | |||
Customer pre-payments | 3,541,681 | 5,816,336 | |||
Other accruals | 587,209 | 675,555 | |||
Accrued interest | 443,870 | 299,273 | |||
Provision for warranty claims | 311,225 | 290,214 | |||
Due to related party | 4,338 | 4,024 | |||
Total current liabilities | 7,352,602 | 8,980,602 | |||
Minority interest | -- | 20,868 | |||
Commitments and contingencies | --- | ||||
Stockholders' equity | |||||
Preferred stock, $,001 par value, 5,000,000 shares authorized, | |||||
1,250,000 Class A shares issued and outstanding | 1,250 | 2,500 | |||
Common stock, $,01 par value, 1,000,000,000 shares authorized, | |||||
39,113,700 shares issued and outstanding | |||||
at September 30, 2007 and December 31, 2006 | 397,187 | 355,987 | |||
Subordinated loan | 107,553 | 128,679 | |||
Additional paid-in capital | 7,350,520 | 7,303,120 | |||
Accumulated deficit | (4,797,694) | (3,784,577) | |||
Other comprehensive income (loss) | (46,780) | (64,556) | |||
Total stockholders' equity | 3,315,148 | 3,939,653 | |||
Total liabilities and stockholders' equity | $ | 10,667,750 | $ | 12,941,123 | |
The accompanying notes are an integral part of these financial statements.
GiraSolar, Inc. | |||||||||
Consolidated Statement of Operations | |||||||||
(Unaudited) | |||||||||
Three months ended | Nine months ended | ||||||||
September 30, | September 30, | ||||||||
2007 | 2006 | 2007 | 2006 | ||||||
Revenue | $ | 2,740,787 | $ | 15,264,326 | $ | 15,813,757 | $ | 51,901,980 | |
Cost of revenue | 2,352,240 | 15,200,766 | 14,649,537 | 50,860,788 | |||||
Gross profit | 388,547 | 63,560 |
| 1,164,220 | 1,041,192 | ||||
Operating expenses | |||||||||
Selling, general and administrative | 657,077 | 362,725 | 1,669,906 | 1,133,509 | |||||
Research and development | 61,540 | --- | 183,549 | --- | |||||
Total operating expenses | 718,617 | 362,725 | 1,853,455 | 1,133,509 | |||||
Income (loss) from operations | (330,070) | (299,165) | (689,235) | (92,317) | |||||
Other income (expense) | |||||||||
Interest income | 145 | 4 | 12,891 | 363 | |||||
Loss on derivative liability | (123,304) | --- | (179,658) | --- | |||||
Interest expense | (52,095) | (40,386) | (166,791) | (137,251) | |||||
Total other income (expense) | (175,254) | (40,382) | (333,558) | (136,888) | |||||
Loss before provision for income taxes | (505,324) | (339,547) | (1,022,793) | (229,205) | |||||
Provision for income taxes | (22,233) | (48,889) | (9,676) | 54,254 | |||||
Loss before minority interest | (483,091) | (290,658) | (1,013,117) | (283,459) | |||||
Minority interest | 590 | 84,995 | -- | (37,725) | |||||
Net loss | $ | (482,501) | $ | (205,663) | $ | (1,013,117) | $ | (321,184) | |
Basis and diluted loss per share | $ | (0.01) | $ | (0.02) | $ | (0.03) | $ | (0.02) | |
Weighted average number of common | |||||||||
shares outstanding - Basic and diluted | 39,113,700 | 13,629,382 | 39,113,700 | 13,629,382 | |||||
GiraSolar, Inc. | |||||
Consolidated Statements of Cash Flows | |||||
(Unaudited) | |||||
Nine months ended | |||||
September 30, | |||||
2007 | 2006 | ||||
Cash flows from operating activities: | |||||
Net loss | $ | (1,013,117) | $ | (321,184) | |
Adjustments to reconcile net loss to net cash provided by | |||||
(used in) operating activities | |||||
Depreciation and amortization | 368,556 | 5,484 | |||
Issuance of common stock for services | 70,600 | 41,800 | |||
Change in derivative liability | 179,658 | ||||
Notes payable issued for salaries | 152,764 | 150,000 | |||
Minority interest | (20,868) | 74,031 | |||
Other comprehensive income | 17,776 | -- | |||
Changes in operating assets | |||||
and liabilities | |||||
Accounts receivable | 3,817,275 | (13,326,265) | |||
Inventory | (1,046,759) | (1,092,440) | |||
Prepayments to vendors | (901,900) | (1,407,602) | |||
Tax refund receivable | (140,972) | (176,293) | |||
Other receivables | (373,024) | (74,394) | |||
Accounts payable and accrued | |||||
expenses | 43,998 | 4,591,635 | |||
Prepayments from customers | (2,274,655) | 12,425,728 | |||
Provision for warranty claims |
| 280,252 | |||
Net cash provided by (used in) | |||||
operating activities | (1,120,668) | 1,170,752 | |||
Cash flows from investing activities | |||||
| Notes receivable |
| -- | ||
Investments | (196) | -- | |||
Advances to related parties | (5,710) | (1,193,320) | |||
Property and equipment |
| ||||
additions | (7,996) | (1,788) | |||
Net cash provided by (used in) | |||||
investing activities | (13,902) | (1,195,108) | |||
Note 1 – Organization and Significant Accounting Policies
Organization and Line of Business
GiraSolar, Inc. is a broad based solar energy company with business activities in several segments of the solar value chain ranging from silicon raw material supply to system integration. The Company’s core business consists of the supply of solar modules and accompanying balance of system components through business-to-business channels. GiraSolar Inc. was established after Legend Investment Corp. acquired a majority of the Dutch GiraSolar BV group in February 2006 and consequently changed its name to GiraSolar Inc. and abandoned all its previous business activities not related to solar energy. GiraSolar BV, the majority owned subsidiary of GiraSolar Inc. which is operating in the field of solar energy and related products, was established in 2003 in Deventer, the Netherlands by W.M. Koornstra, H.J.M. Keijzer and K.H.J.M. Dirven, three seasoned solar energy entrepreneurs. W.M. Koornstra has been involved in on-grid and off-grid solar and R&D activities since 1993. GiraSolar BV operates two fully owned subsidiaries in the Netherlands (DutchSolar BV and GiraMundo BV) and a 51% owned subsidiary in Turkey (GiraSolar Turkey Ltd. Ste.). We also have a presence in Spain where we have a sales support office and recently established a joint-venture in Addis Ababa (Ethiopia) in which have a 60% interest.
These financial statements include the Company and its subsidiary, GiraSolar, B.V. and its subsidiaries. The primary activities of GiraSolar, B.V. consist of the production of solar energy equipment; the sale of solar energy applications and equipment; and consultancy of solutions in the field of solar energy applications and equipment. In addition, we derive a part of our revenue from the supply of half-fabricates and raw materials.
Basis of Presentation
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company incurred a net loss for the nine months ended September 30, 2007 of $1,013,117 and at September 30, 2007, had an accumulated deficit of $4,797,694 and a working capital deficit of $3,052,373. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Principles of Consolidation
The consolidated financial statements include the accounts of GiraSolar, B.V. and its two wholly owned subsidiaries and one 51% owned subsidiary, of which the Company has the ability to exercise control and direct operations. All material intercompany balances and transactions have been eliminated on consolidation.
Revenue Recognition
Revenue is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”. The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sales arrangement, the performance has occurred, or service have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured.
Revenues from the sale of solar energy equipment are recognized upon delivery.
Revenues from services are recognized in proportion to the services rendered.
Government operating grants are included in the statement of operations in the year to which the subsidized expenses are charged, in which the loss of income is incurred, or in which the operating loss has occurred.
Stock Based Compensation
SFAS No. 123, “Accounting for Stock-Based Compensation,” establishes and encourages the use of the fair value based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. The statement also permits companies to elect to continue using the current intrinsic value accounting method specified in Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” to account for stock-based compensation. The Company has elected to use the intrinsic value based method and has disclosed the pro forma effect of using the fair value based method to account for its stock-based compensation issued to employees. For options granted to employees where the exercise price is less than the fair value of the stock at the date of grant, the Company recognizes an expense in accordance with APB 25. For non-employee stock based compensation the Company recognizes an expense in accordance with SFAS No. 123 and values the equity securities based on the fair value of the security on the date of grant. For stock-based awards the value is based on the market value for the stock on the date of grant and if the stock has restrictions as to transferability a discount is provided for lack of tradability. Stock option awards are valued using the Black-Scholes option-pricing model.
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 reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.
Fair Value of Financial Instruments
For certain of the Company’s financial instruments, including cash and cash equivalents, other current assets, accounts payable, accrued interest and due to related party, the carrying amounts approximate fair value due to their short maturities.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with a maturity of three months or less, plus all certificates of deposit.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents and accounts receivables. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $100,000 insurance limit. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required.
Furniture and Vehicles, net
Acquisitions of furniture and vehicles are recorded at cost. Improvements and replacements of furniture and vehicles are capitalized. Maintenance and repairs that do not improve or extend the lives of furniture and vehicles are charged to expense as incurred. When furniture and vehicles are retired, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reported in the statements of operations. Depreciation is computed using the straight-line method based on the estimated useful life of each class of depreciable assets as follows:
Furniture and fixtures
5 -10 years
Vehicles
3 - 5 years
Impairment of Long-Lived Assets
SFAS No. 144 requires that long-lived assets to be disposed of by sale, including those of discontinued operations, be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or in discontinued operations. SFAS No. 144 broadens the reporting of discontinued operations to include all components of an entity with operations that can be distinguished from the rest of the entity and that will be eliminated from the ongoing operations of the entity in a disposal transaction. SFAS No. 144 also establishes a “primary-asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. The Company has no impairment issues to disclose.
Accrued Product Warranties
The Company’s product warranty accrual reflects management’s estimate of probable liability as a percentage of product sales. Management establishes product warranty accruals based on historical experience and currently available information. During the current year the Company increased the provision by $21,000 from that established during the year ended December 31st, 2005, which is
based on a percentage of the sales of GiraSolar B.V., GiraMundo B.V. and DutchSolar B.V. The provision is short-term in nature. The Company continues to assess its accruals on an ongoing basis and will make adjustments as it deems necessary.
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Earnings (Loss) Per Share
The Company reports earnings (loss) per share in accordance with SFAS No. 128, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented since the effect of the assumed conversion of options and warrants to purchase common shares would have an anti-dilutive effect.
All common stock shares are presented to reflect a five for 2 forward stock split approved by the Board of Directors on April 12, 2006. All share and per share information has been retroactively restated to reflect this stock split.
Comprehensive Loss
SFAS No. 130, “Reporting Comprehensive Loss,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Total comprehensive loss consists of the net income for the respective periods, the foreign currency translation adjustments, and the unrealized loss on available for sale securities.
Recently Issued Accounting Pronouncements
In July 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109”. FIN 48 provides guidance for the recognition, measurement, classification and disclosure of the financial statement effects of a position taken or expected to be taken in a tax return (“tax position”). The financial statement effects of a tax position must be recognized when there is a likelihood of more than 50 percent that, based on the technical merits, the position will be sustained upon examination and resolution of the related appeals or litigation processes, if any. A tax position that meets the recognition threshold must be measured initially and subsequently as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a
taxing authority. The interpretation is effective for fiscal years beginning after December 15, 2006. The Company does not expect its adoption of FIN 48 to have a material impact on its consolidated financial portion, results of operations or cash flows.
In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 (“SFAS No. 157”), “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. The Statement applies under other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, or the Company’s fiscal year ending December 31, 2007. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial position, results of operations or cash flow.
In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”. This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The effective date to initially recognize the funded status and to provide the required disclosures is for fiscal years ending after December 15, 2006, or the Company’s fiscal year ending December 31, 2007. The requirement to measure plan assets and benefit obligations is effective for fiscal years ending after December 15, 2008, or the Company’s fiscal year ending September 30, 2009. The Company does not expect the adoption of this new standard to have a material impact on its consolidated financial position, results of operations or cash flows.
In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” and is effective for fiscal years beginning after November 15, 2007. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company is currently assessing the impact the adoption of this pronouncement will have on the financial statements.
Foreign Currency Translation
GiraSolar, B.V. maintains its books and records in Euros, the currency of the Netherlands. The Euro is the Company’s functional currency, as the Company’s business activities are located in the Netherlands and dominated in Euros. For practical purposes, assets and liabilities are translated into United States Dollars at the midyear exchange rate of $1.3627 (US$), the exchange rate prevailing at June 30, 2007. Revenue and expenses are translated into United States Dollars at the rate of $1.32961, the midyear average exchange rate on June 30, 2007. No representation is made that the Euro amount could have been, or could be converted into US$ at that rate or at any other rate. Foreign currency translation gains or losses are recorded as other comprehensive income in the stockholders’ equity section of the balance sheet.
Note 2 – Inventories
Inventories of raw materials, consumables, and finished goods are valued at the lower of cost or market, on a first-in, first-out basis. The market value is determined by individual assessment of the inventories.
Inventory consists of the following at September 30, 2007:
Finished goods
$ 1,785,638
Note 3 – Accounts Receivable and Allowance For Doubtful Accounts
Trade accounts receivable are presented net of an allowance for doubtful accounts. The Company estimates the allowance based on an analysis of specific customers, taking into consideration the age of accounts and an assessment of the customer’s ability to pay. The Company has determined, based upon these considerations, that no allowance for doubtful accounts is required at September 30, 2007.
Note 4 – Furniture and Vehicles
Property and equipment consists of the following at September 30, 2007:
Furniture and fixtures | $ 30,526 |
Vehicles | 9,651 |
40,177 | |
Less - Accumulated depreciation | (12,898) |
| $ 27,279 |
Note 5 – Notes Payable (Including Related Party)
Notes payable consist of the following at September 30, 2007:
Notes payable to a Dutch entity supporting renewable energy and sustained agricultural development (the “Dutch Entity”) is currently non-interest bearing (the “New Note”). The New Note is not in default and is convertible into shares of the Company’s common stock at a 25% discount to average of the closing price of previous ten trading days. The New Note replaces notes that were held by Mr. Peter Klamka, a Company Officer (the “Old Notes”). The Dutch Entity acquired the Old Notes pursuant to the terms of a purchase agreement which provided that, the Dutch Entity would make certain specified payments to Mr. Klamka at certain specified times. We have agreed to pay the Dutch Entity interest on the amount of each payment made by the Dutch entity to Mr. Klamka until such time as the Dutch Entity is reimbursed for all amounts it paid to Mr. Klamka. Upon a default of the terms of the purchase agreement, the Old Notes may revert to Mr. Klamka. The Old Notes issued to the Company officer bear interest upon default at a rate of 21% per annum are unsecured, are due on demand, and were in default at December 31, 2006 and 2005. These notes were issued for past due compensation for 2002, 2003, and 2004 salary to a company officer; debt convertible into shares of the Company’s common stock at .02 per share. | $ 466,665 |
Notes payable to a former employee of the Company. Notes bear interest upon default at 21% per annum. These notes are unsecured and are due on demand, and are in default at December 31, 2006 and 2005. These notes were issued for past due compensation. | 127,500 |
Notes payable to a Company Officer, currently non-interest bearing, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.02 per share. This note was issued for 2005 salary past due compensation. | 250,000 |
Notes payable to Peter Klamka, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2006 salary past due compensation. | 175,000 |
Notes payable to Peter Klamka, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at$.35 per share. This note was issued for 2007 salary past due compensation. | 50,000 |
Notes payable to Peter Klamka, bears interest only upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at$.35 per share. This note was issued for 2007 salary past due compensation. | 50,000 |
Notes payable to Peter Klamka, currently bears interest at 8%, upon default bears interest at 21%, per annum unsecured and due on demand. Convertible into common stock at$.10 per share. This note was issued for expenses advanced. | 66,985 |
Notes payable to Peter Klamka, currently bears interest at 8%, upon default bears interest at 21% per annum, unsecured and due on demand. Convertible into common stock at $.10 per share. This note was issued for legal fees advanced. | 29,000 |
Notes payable to an individual, non-interest bearing, unsecured and due on demand. | 3,000 |
Notes payable to an individual, non-interest bearing, unsecured and due on demand. | 3,550 |
| |
| $1,221,700 |
Events that occurred during the quarter ended September 30, 2007 that had an impact on our notes payable as reflected above were as follows:
(a) We entered into an agreement with Peter Klamka, an individual who was, but no longer is, a Company Officer, resulting in, among other things, elimination of a note payable of $303,362. The eliminated note was bearing 21% interest per annum and convertible into common stock at $0.02 per share;
(b)
An agreement was entered into between Peter Klamka and the Dutch Entity, which effectively transferred the title to a note held by Mr. Klamka to the Dutch Entity and the Dutch Entity agreed to make certain specified payments to Mr. Klamka at certain specified times. The transferred note (the “Old Note”) of $466,665 was bearing 21% interest per annum and was convertible into common stock at $0.02 per share. Upon transfer of title this note (the “New Note”) is convertible into shares of the Company’s common stock at a 25% discount to the average closing price of the previous 10 trading days of our stock. In addition, we are obligated to pay the Dutch entity interest in the amount of 8% on all amounts paid to Mr. Klamka by the Dutch Entity until such time as the Dutch Entity is reimbursed for all amounts that it paid to Mr. Klamka.
Events that occurred after the end of the quarter that have an impact on our notes payable
We entered into an agreement with Peter Klamka pursuant to which Mr. Klamka agreed to transfer notes in the principal amounts of $175,000, $50,000, $50,000, $66,985 and $29,000 to the Dutch Entity in exchange for certain cash payments which include payments of $250,000 to be made by us prior to December 31, 2008 and December 31, 2009. The notes are being held in escrow pending fulfillment of the payment obligations in the agreement. In addition, we agreed to issue an aggregate of 3,500,000 shares of common stock in exchange for a note that was previously transferred from Mr. Klamka to the Company.
Note 6 – Related Party Transactions
A total of $58,066 is due from three companies that are controlled by a related Company. These advances are non-interest bearing and the Company can demand payment at any time.
A total of $374,498 is due from seven companies that are related to GiraSolar, B.V. These advances are non-interest bearing.
Notes payable to related parties consist of the following at September 30, 2007:
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.02 per share. This note was issued for 2005 salary past due compensation. | $250,000 |
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2006 salary past due compensation. | 175,000 |
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2007 salary past due compensation | 50,000 |
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.35 per share. This note was issued for 2007 salary past due compensation. | 50,000 |
Notes payable to Peter Klamka, currently bears interest at 8%, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.10 per share. This note was issued for expenses advanced. | 66,985 |
Notes payable to Peter Klamka, currently non-interest bearing, bears interest upon default at 21% per annum, unsecured and due on demand. Convertible into common stock at $.10 per share. This note was issued for legal fees advanced. | 29,000 |
$620,985 |
Subsequent event having an effect on our related party transactions.
In November the Company’s Board of Directors and management experienced changes such that the officer who holds many of the notes listed in this section is no longer an officer of the Company or a related party. See Note 16 “Subsequent Event” for a more detailed discussion of this event.
Note 7 – Common Stock Transactions
All share and per share data has been adjusted to reflect our recapitalization in which each two share of common stock outstanding were converted into five shares of common stock.
During the first quarter, 2005, the Company issued 587,500 common shares for cash totaling $15,925.
During the second quarter, 2005, the Company issued 1,475,000 common shares for services rendered totaling $65,300.
During the first quarter, 2006, the Company issued 5,000,000 common shares to purchase 51% of the outstanding common shares of GiraSolar, B.V. The shares were valued at market and totaled $580,000.
During the first quarter