SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
_________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL QUARTER ENDED JUNE 30, 2012
COMMISSION FILE NO.: 0-33513
GS ENVIROSERVICES, INC. | ||
Exact name of registrant as specified in its charter) | ||
Delaware | 20-8563731 | |
(State of other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification No.) | |
5950 Shiloh Road East, Suite N, Alpharetta, GA | 30005 | |
(Address of principal executive offices) | (Zip Code) | |
(212) 994-5374 | ||
(Registrant’s telephone number including area code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes | X | No | ||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the prior 12 months (or for such shorter period that the registrant was required to submit and post such files). | Yes | X | No | ||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. | |||||
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer[ ] Smaller reporting company [X] | |||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes | No | X | ||
As of August 14, 2012 there were 100,000,016 shares of common stock outstanding. |
GS ENVIROSERVICES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED JUNE 30, 2012
TABLE OF CONTENTS
Page No. | ||
Part I | Financial Information | |
Item 1. | Financial Statements (unaudited) | 3 |
Condensed Balance Sheets – June 30, 2012 and December 31, 2011 (unaudited) | 4 | |
Condensed Statements of Operations for the Three and Six Months Ended June 30, 2012 (unaudited) and 2011 (unaudited) | 5 | |
Condensed Statements of Cash Flows for the Six Months Ended June 30, 2012 (unaudited) and 2011 (unaudited) | 6 | |
Notes to Condensed Financial Statements | 7 | |
Item 2. | Management’s Discussion and Analysis | 8 |
Item 3 | Quantitative and Qualitative Disclosures about Market Risk | 10 |
Item 4. | Controls and Procedures | 10 |
Part II | Other Information | |
Item 1. | Legal Proceedings | 10 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 10 |
Item 3. | Defaults Upon Senior Securities | 10 |
Item 4. | Mine Safety Disclosures | 10 |
Item 5. | Other Information | 11 |
Item 6. | Exhibits | 11 |
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) FOR JUNE 30, 2012
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GS ENVIROSERVICES, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
JUNE 30, 2012 AND DECEMBER 31, 2011
ASSETS: | 6/30/2012 | 12/31/2011 | ||||||
Current assets: | ||||||||
Cash | $ | -- | $ | -- | ||||
Total current assets | -- | -- | ||||||
TOTAL ASSETS | -- | -- | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||
Current liabilities: | ||||||||
Accounts payable | 29,307 | 34,331 | ||||||
Accrued expenses | 26,955 | 424,993 | ||||||
Due to an affiliate | 12,774 | 12,051 | ||||||
Convertible debenture | -- | 223,387 | ||||||
Total current liabilities | 69,036 | 694,762 | ||||||
Total liabilities | 69,036 | 694,762 | ||||||
Stockholders’ equity (deficit): | ||||||||
Common stock, $.0001 par value, 10,000,000,000 shares authorized,100,000,016 and 7,605,054 shares issued and outstanding, respectively | 10,001 | 761 | ||||||
Treasury stock, 7,968,540 shares at cost | (240,000 | ) | (240,000 | ) | ||||
Additional paid-in capital | 5,970,536 | 5,367,885 | ||||||
Retained deficit | (5,809,573 | ) | (5,823,408 | ) | ||||
Total stockholders’ equity (deficit) | (69,036 | ) | (694,762 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | -- | $ | -- |
The notes to the Condensed Financial Statements are an integral part of these statements.
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GS ENVIROSERVICES, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011 (UNAUDITED)
Three Months Ended | Six Months Ended | |||||||||||||||
6/30/2012 | 6/30/2011 | 6/30/2012 | 6/30/2011 | |||||||||||||
Revenues | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Cost of revenues | -- | -- | -- | -- | ||||||||||||
Gross profit | -- | -- | -- | -- | ||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative expenses | 20,932 | 61,617 | 55,199 | 109,179 | ||||||||||||
Total operating expenses | 20,932 | 61,617 | 55,199 | 109,179 | ||||||||||||
Operating loss | (20,932 | ) | (61,617 | ) | (55,199 | ) | (109,179 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Gain on extinguishment of debt | 75,000 | -- | 75,000 | -- | ||||||||||||
Interest expense | -- | (5,967 | ) | (5,967 | ) | (11,869 | ) | |||||||||
Total other income (expense), net | 75,000 | (5,967 | ) | 69,033 | (11,869 | ) | ||||||||||
Income (loss) before provision for income taxes | 54,068 | (67,584 | ) | 13,834 | (121,048 | ) | ||||||||||
Provision for income taxes | -- | -- | -- | -- | ||||||||||||
Net income (loss) | $ | 54,068 | $ | (67,584 | ) | $ | 13,834 | $ | (121,048 | ) | ||||||
Income (loss) per share | ||||||||||||||||
Basic income (loss) per share | $ | 0.00 | $ | (0.01 | ) | $ | 0.00 | $ | 0.00 | |||||||
Diluted income (loss) per share | $ | 0.00 | $ | (0.01 | ) | $ | 0.00 | $ | 0.00 | |||||||
Weighted average shares of common stock outstanding | ||||||||||||||||
Basic | 93,929,881 | 7,605,054 | 45,767,467 | 7,605,054 | ||||||||||||
Diluted | 93,929,881 | 7,605,054 | 45,767,467 | 7,605,054 |
The notes to the Condensed Financial Statements are an integral part of these statements.
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GS ENVIROSERVICES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2012 (UNAUDITED)
AND JUNE 30, 2011 (UNAUDITED)
6/30/2012 | 6/30/2011 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | 13,834 | $ | (121,048 | ) | |||
Adjustment to reconcile net income (loss) to net cash used in (provided by) operating activities: | ||||||||
Gain on extinguishment of debt | (75,000 | ) | -- | |||||
Changes in assets and liabilities: | ||||||||
Accounts payable and accrued expenses | 57,044 | 108,997 | ||||||
Due to affiliate | (21,878 | ) | 12,051 | |||||
Net cash flows used in continuing operations | (26,000 | ) | -- | |||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||||||
Cash proceeds from stock issuances | 26,000 | -- | ||||||
Net cash provided by financing activities | 26,000 | -- | ||||||
Increase (decrease) in cash | -- | -- | ||||||
Cash at beginning of period | -- | -- | ||||||
Cash at end of period | $ | -- | $ | -- | ||||
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Forgiveness of related party debt | $ | 335,887 | $ | -- |
The notes to the Condensed Financial Statements are an integral part of these statements.
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GS ENVIROSERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
The Company’s operations consist of research and evaluation of a number of technologies designed to refine industrial and municipal solid waste and wastewaters into carbon-neutral products. During 2011, these efforts culminated in the development of a proprietary aqueous conversion technology that relies in part on a process known as hydrothermal carbonization to convert qualified organic wastes and other byproducts into coal. A key feature of this process is that the conversion can be completed without carbon dioxide emissions, thereby sequestering the carbon in the converted wastes for reuse in lieu of new fossil fuel resources. The Company’s business model is limited to the early-stage development and intellectual property protection of its technologies, with a view towards ultimately generating revenue through technology licensing.
GOING CONCERN
The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. The Company has no established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. These factors raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our ability to raise capital will depend on our success in obtaining financing and our success in developing revenue sources.
BASIC AND DILUTED EARNINGS PER SHARE (“EPS”)
Basic (loss) earnings per share is computed by dividing net income (loss) by the weighted average common shares outstanding during a period. Diluted (loss) earnings per share is based on the treasury stock method and includes the effect from potential issuance of common stock assuming the exercise of all stock options. Common share equivalents have been excluded where their inclusion would be anti-dilutive.
NOTE 2 | CONVERTIBLE DEBENTURE |
Effective on June 3, 2009, James Green resigned from his position as Chief Executive Officer and sole member of GS EnviroServices’ Board of Directors. Pursuant to an Exchange Agreement dated June 3, 2009 James Green delivered to GS EnviroServices 7,968,540 shares of GS EnviroServices common stock (the "Exchange Shares"). In exchange for the Exchange Shares, GS EnviroServices issued to Mr. Green a Convertible Debenture and agreed to issue one million shares of Series A preferred Stock, when authorized.
The Convertible Debenture was in the principal amount of $240,000, although payment of $24,000 against that principal obligation was made by GS EnviroServices immediately. In October 2009, the Company issued a partial monthly payment of $19,280 reducing the principal to $196,720. The remaining principal was payable with 12% per annum interest in monthly payments of $38,562 commencing in October 2009, with the final payment due on February 26, 2010. Interest was payable in cash or in shares of GS EnviroServices common stock, at GS EnviroServices’ option. The holder could convert the principal amount and accrued interest into common stock of GS EnviroServices at a conversion price equal to 90% of the lowest closing market price during the 20 trading days preceding conversion, but could not convert into shares that would cause it to own more than 4.99% of the outstanding shares of GS EnviroServices. The Company determined that the conversion feature of the convertible debenture met the criteria of ASC 480-10-25-14 to be recorded as a liability as it could result in the note being converted into a variable number of shares. At the commitment date, the Company determined the value of the Green Convertible Debentures to be an aggregate $264,827, which represented the face values of $240,000 plus the present values of the liability for the conversion features of $24,827. The Company recorded the $24,827 to interest expense at the commitment dates of the debentures. The difference between the fair value of the conversion feature and the present value was being accreted through interest expense. Through March 31, 2012, total expense of $1,840 was recorded as interest expense for the accretion of the discount from the liability of the conversion feature.
On June 3, 2009 James Green transferred to Viridis Capital, LLC his beneficial interest in the Exchange Shares, including his right to receive the Series A Preferred Stock in exchange for the Exchange Shares. Kevin Kreisler, the CEO of GS EnviroServices, is the sole member of Viridis Capital, LLC.
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Effective April 14, 2012, the Company and Jim Green entered into an agreement pursuant to which Mr. Green agreed to accept 7,968,540 restricted shares of Company common stock in full satisfaction of any and all amounts due from the Company to Mr. Green. On the same date, the Company’s chief executive officer purchased 7,968,540 Company common shares from Mr. Green in exchange for marketable securities.
NOTE 3 | RELATED PARTY TRANSACTIONS |
On April 13, 2012, the Company’s chief executive officer, Kevin Kreisler, provided $26,000 in cash to the Company for working capital purposes. Effective April 16, 2012, the Company and Mr. Kreisler entered into an agreement pursuant to which Mr. Kreisler agreed to eliminate and waive his right to receive 194,118 shares of the Company’s Series A Preferred Stock (“Series A Shares”); to waive $112,500 in accrued compensation payable for services rendered as of April 16, 2012; and, to contribute 1,000,000 Series A Shares beneficially owned by Mr. Kreisler and the $26,000 provided to the Company by Mr. Kreisler on April 13, 2012 in exchange for 84,426,422 restricted Company common shares.
Effective April 16, 2012, the Company and its controller entered into an agreement pursuant to which the controller agreed to waive all accrued compensation due from the Company in excess of $12,500, which amount shall remain due and payable by the Company.
The foregoing transactions resulted in the elimination and contribution to capital of a total of $603,448 from forgiveness of $292,343 in outstanding principal and interest and $311,106 in accrued expenses and a gain on extinguishment of debt of $75,000.
NOTE 4 | STOCKHOLDER’S EQUITY |
Effective April 14, 2012, the Company and Jim Green entered into an agreement pursuant to which Mr. Green agreed to accept 7,968,540 restricted shares of Company common stock in full satisfaction of any and all amounts due from the Company to Mr. Green. On the same date, the Company’s chief executive officer purchased 7,968,540 Company common shares from Mr. Green in exchange for marketable securities.
NOTE 5 | SUBSEQUENT EVENTS |
On July 31, 2012, Kevin Kreisler, the sole member of our Board of Directors, elected Tad Simmons, the chief executive officer and majority shareholder of GreenSource Corporation (“GreenSource”), to also serve as a member of the Board. The Board then elected Mr. Simmons to serve as the chief executive officer and chief financial officer for the Company effective as of August 17, 2012. Mr. Kreisler simultaneously submitted his resignation from the Board, although the resignation will not be effective until ten days after the Company mails an information statement on Form 14F to its shareholders of record, which form is expected to be mailed in August 2012. Upon the tenth day after such mailing, Mr. Simmons will become the sole member of the Board of Directors.
Effective July 31, 2012, Viridis Capital, LLC (“Viridis”), an entity owned by our chief executive officer, entered into an agreement with 11235 Factor Fund, LLC (“Factor”) pursuant to which Factor agreed to purchase 91,426,406 shares of Company common stock in exchange for securities held in an unaffiliated entity. Factor then assigned 100% of its interest in those shares to the Company in exchange for $275,000 in convertible debentures. The debentures permit conversion into common stock at the greater of $0.10 per share or 80% of the lowest volume weighted average market price for the Company’s common stock for the 90 days prior to conversion; provided, however, that Factor cannot convert its debentures into shares that would result in the holder or its affiliates owning in excess of 4.9% of the outstanding shares. The maturity date of the debentures is June 30, 2013.
On August 17, 2012, the Company entered into a securities purchase agreement with GreenSource pursuant to which the Company agreed to sell 65,000,000 restricted shares of its common stock to GreenSource in exchange for $250,000, payable in the form of $25,000 in cash and a $225,000 promissory note. GreenSource has the option to prepay the note in full for $200,000 if paid in full on or before October 30, 2012.
Biographical Data for Mr. Simmons
Mr. Simmons has been President and CEO of GreenSource Corporation since 2008 and owner of GreenSource for 7 years prior. GreenSource provides technical and management consulting services to various clients in green-tech, clean-tech, and the sustainability industry. From 2001 to 2007, Mr. Simmons was in the solar energy industry serving as sales manager for both residential and commercial sales programs. He and his colleagues established the sales program for photovoltaic systems in Home Depot stores in San Diego. He worked as a consultant and sales manager for Clean Power Systems, Kerr Enterprises, and Rockwell Electric, a subsidiary of Integrated Electrical Services, Inc. From 1999 to 2003, Mr. Simmons served as President & CEO of Gober Gear, Inc., a developer of off-road trailers for hauling kids or cargo on mountain trails.
From 1993 to 2000, Mr. Simmons served as Senior Staff Engineer and Technical Lead at Science Applications International Corporation (SAIC). Prior to this he worked briefly for Naval Research and Development in Point Loma, California. During his engineering education at San Diego State University, Mr. Simmons served as Electrical Engineering Team Leader for the Suntrakker vehicle project. He and fellow team members designed and built the Suntrakker solar car, a first for San Diego State University, and competed in the 1993 2000-mile World Solar Challenge in Australia.
Mr. Simmons’ experience includes 8 years as an engineer and technical lead for various government and private sector clients; it includes design and leadership roles in projects including fuel cell instrumentation, flat-panel x-ray imaging, integrated circuit design, renewable energy technology design reviews, and development of strategic partnerships; proposal development including a $500 million management and operations contract for the National Renewable Energy Laboratory, wind turbine and electric vehicle motor design review, and support of various entrepreneurial ventures.
Mr. Simmons earned a certificate in Global Business Management while at SAIC, has been Chairman or President of both the Institute for Electrical and Electronics Engineers (IEEE), and the Society of Automotive Engineers (SAE) in San Diego, and is a two-time winner of the Saturn Award for Leadership. Mr. Simmons earned his Master’s in Business Administration from the University of Phoenix in 2002, and his Bachelor’s degree in Electrical Engineering from San Diego State University in 1993. Mr. Simmons is 44 years old.
ITEM 2 | MANAGEMENT'S DISCUSSION AND ANALYSIS |
FORWARD LOOKING STATEMENTS
In addition to historical information, this Report contains forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "estimates," "projects," or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in Section 1A: “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors described in other documents GS EnviroServices, Inc. files from time to time with the Securities and Exchange Commission (the "SEC").
The Company’s operations consist of research and evaluation of a number of technologies designed to refine industrial and municipal solid waste and wastewaters into carbon-neutral products. During 2011, these efforts culminated in the development of a proprietary aqueous conversion technology that relies in part on a process known as hydrothermal carbonization to convert qualified organic wastes and other byproducts into coal. A key feature of this process is that the conversion can be completed without carbon dioxide emissions, thereby sequestering the carbon in the converted wastes for reuse in lieu of new fossil fuel resources. The Company’s business model is limited to the early-stage development and intellectual property protection of its technologies, with a view towards ultimately generating revenue through technology licensing.
Hydrothermal carbonization (“HTC”) combines water and a carbon source such as biomass at elevated temperatures and pressures. Products include a solid consisting primarily of carbon with a similar energy content to lignite to sub-bituminous coal at approximately 30MJ/kg. Intermediate chemicals are formed during the process which may additionally be recovered and utilized. The process is mostly thermoneutral, meaning that heat may be recovered and reused once the process is initiated. The process is also highly autogenic, meaning that the process itself provides pressure that can be used for additional work. Advantageously, and in contrast to most conventional pyrolytic, gasification and other like processes, the Company’s HTC process is based on the processing of wet biomass into an energy dense solid fuel and does not require a dry feedstock. Wet feedstock, such as municipal wastewater sludges, are attractive from a resource utilization standpoint in part because constituent fractionation processes, which are needed to remove contaminants prior to thermal processing, are typically more practically accomplished in an aqueous environment.
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Potential markets for the Company’s HTC technology include municipal and industrial generators of large quantities of carbonaceous wastes. The municipal solid waste market, for example, has a need for reduction of landfilled material to extend landfill life and reduce costs. As of 1996, there were approximately 3,500 permitted municipal landfills in the United States. According to the US-EPA, in 2008, approximately 250 million tons of municipal solid waste (residential, commercial and institutional sources) was produced. Potential waste that qualifies for HTC processing includes paper, food scraps, yard trimmings and wood. Before recycling, these materials collectively amounted to approximately 63% of all municipal waste. According to the EPA, approximately 33% of this waste stream was recovered, re-used or recycled, corresponding to about 89 million metric tons of recyclable municipal solid waste that consumes landfill space and eventually causes significant methane emissions – a greenhouse gas 23 times more potent than carbon dioxide. The primary product in the HTC process is a solid carbonaceous material containing a complex network of cyclic hydrocarbon polymers and with an energy value comparable to lignite to sub-bituminous coal. Coal accounts for about 52% of the electricity production in the U.S.
During 2012, the Company plans to seek capital, management and other resources for further development of this technology, with a primary goal of completing pilot-scale trials involving the Company’s technology, either alone or with a suitable early-adopter technology partner. The Company also plans to continue to seek possible acquisition targets that bring strategic assets, cash flows or management to the Company in ways that also defray the Company’s financial and technology risk.
RESULTS OF OPERATIONS
General and administrative (“G&A”) expenses for the six months ended June 30, 2012 were $51,199 as compared to $109,179 for the corresponding period in 2011. The amount incurred for 2012 included $51,199 in general and administrative expenses. The amount incurred for 2011 included $79,179 in general and administrative expenses and $30,000 in consulting fees. These costs were incurred in connection with the Company’s ongoing technology development efforts. The decrease in costs was related to a reduction in consulting fees.
Total other income (expense) for the six months ended June 30, 2012 consisted of a $75,000 gain on extinguishment of debt associated with the writeoff of accrued compensation and interest expense of $5,967. Total other income (expense) for the six months ended June 30, 2011, consisted solely of interest expense of $11,869. Our net income (loss) for the six months ended June 30, 2012 and 2011 was $13,834 and $121,048 respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company’s operating activities have been primarily subsidized by equity-based compensation commitments as well as working capital advances received from related parties from time to time. These amounts are included in the Company’s accrued expenses and amounts due to affiliate of $25,274 at June 30, 2012. Accounts payable and accrued expenses totaled $56,263 and $459,324 at June 30, 2012 and December 31, 2011. The Company had a negative working capital position of $69,036 as of June 30, 2012 as compared to a negative working capital position of $694,762 as of December 31, 2011. The Company currently has no commitment for financing and will not be able to implement its business plan unless it obtains capital. The accompanying financial statements referred to above have been prepared assuming that the company will continue as a going concern. The Company has no established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. These factors raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our ability to raise capital will depend on our success in obtaining financing and our success in developing revenue sources.
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ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not applicable.
ITEM 4 | CONTROLS AND PROCEDURES |
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our principal executive officer and principal financial officer participated in and supervised the evaluation of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by us in the reports that we file is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive officer or officers and principal financial officer, to allow timely decisions regarding required disclosure.
In the course of making our assessment of the effectiveness of our disclosure controls and procedures, we identified a material weakness. This material weakness consisted of inadequate staffing and supervision within the bookkeeping and accounting operations of our company. The lack of employees prevents us from segregating disclosure duties. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews. Based on the results of this assessment, our management concluded that because of the above condition, our disclosure controls and procedures were not effective as of the end of the period covered by this report.
There have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1 | LEGAL PROCEEDINGS |
None.
ITEM 1A | RISK FACTORS |
There has been no material change in the risk factors affecting the Company that were set forth in Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2011.
ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
None.
ITEM 3 | DEFAULTS UPON SENIOR SECURITIES |
None.
ITEM 4 | MINE SAFETY DISCLOSURES |
Not Applicable.
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ITEM 5 | OTHER INFORMATION |
None.
ITEM 6 | EXHIBITS |
The following are exhibits filed as part of the Company’s Form 10-Q for the quarter ended June 30, 2012:
INDEX TO EXHIBITS
Exhibit Number | Description |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 as incorporated herein by reference |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Sarbanes-Oxley Act of 2002 as incorporated herein by reference |
101.INS | XBRL Instance* |
101.SCH | XBRL Schema* |
101.CAL | XBRL Calculation* |
101.DEF | XBRL Definition* |
101.LAB | XBRL Label* |
101.PRE | XBRL Presentation* |
* The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the date indicated.
GS ENVIROSERVICES, INC.
By: | /s/ | KEVIN KREISLER | ||
KEVIN KREISLER | ||||
Chief Executive Officer, Chief Financial and Accounting Officer | ||||
Date: | August 17, 2012 |
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