Zinco do Brasil 10Q 2011 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2010

o TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT

For the transition period from ___________ to _____________

Commission file number 000- 52630

TURKPOWER CORPORATION

(formerly Global Ink Supply Co.)

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

Nevada		26-2524571
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

100 Park Avenue Suite 1600

New York, New York 10017

(Address of principal executive offices)

(212) 984-0628

(Issuer's telephone number)

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o

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

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes x No o

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 112,575,000 shares of Common Stock, as of October 15, 2010.

Transitional Small Business Disclosure Format (check one): Yes o No x

TurkPower Corporation (formerly Global Ink Supply Co.)

	Page Number
PART 1 – Financial Information

Item 1 – Unaudited Financial Information:

Consolidated Balance Sheets as of August 31, 2010 and May 31, 2010 (Unaudited)	2

Consolidated Statements of Operations for the Three Months Ended August 31, 2010 and 2009 (Unaudited)	3

Consolidated Statements of Cash Flows for the Three Months Ended August 31, 2010 and 2009 (Unaudited)	4

Notes to the Consolidated Financial Statements (Unaudited)	5

Item 2 - Management’s Discussion and Analysis or Financial Condition and Results of Operations	7

Item 3 - Quantitative and Qualitative Disclosures About Market Risk	9

Item 4 - Controls and Procedures	9

PART II - Other Information (Items 1-6)	10

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TurkPower Corporation

Consolidated Balance Sheets

Unaudited

	August 31, 2010			May 31, 2010

ASSETS

Current assets:
Cash	$	90,255		$	289,090
Receivables		84,770			50,078
Prepaid expenses		3,554			5,006
Deferred costs		200,000			200,000
Other current assets		15,699			6,252
Total current assets		394,278			550,426

Property and equipment, net of accumulated depreciation $3,573 and $1,421 as of August 31, 2010 and May 31, 2010, respectively		24,113			23,424
Long-term deposit		1,961,652			1,284,673
TOTAL ASSETS	$	2,380,043		$	1,858,523

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	324,607		$	149,691
Related party payable		23,784			21,492
Deferred revenue		148,583			186,072
Short-term debt		621,613			555,692
Convertible debt, net of unamortized discount of $208,895 and $289,761 as of August 31, 2010 and May 31, 2010, respectively		591,105			510,239
Line of credit		657,280			-
Total current liabilities		2,366,972			1,423,186

Stockholders' Equity:

Preferred stock: $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock: $0.0001 par value; 300,000,000 shares authorized; 112,575,000 shares issued and outstanding		11,257			11,257
Additional paid-in capital		1,004,970			1,004,970
Accumulated other comprehensive loss		(433	)		(7,479	)
Accumulated deficit		(1,002,723	)		(573,411	)
Total stockholder’s equity		13,071			435,337

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,380,043		$	1,858,523

See accompanying notes to the consolidated financial statements.

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TurkPower Corporation

Consolidated Statements of Operations

Unaudited

	Three Months Ended August 31,
	2010			2009

Revenues	$	25,922		$	-

Professional fees		34,209			500
Selling, general and administrative expenses		246,985			-
Total operating expenses		281,194			500

Loss from operations		(255,272	)		(500	)

Other income (expense):
Interest income		18
Interest expense		(183,152	)		-
Foreign currency gain		9,094			-
Total other expense		(174,040	)		-

Net loss	$	(429,312	)	$	(500	)

Net loss per common share - basic and diluted		(0.00	)		(0.00	)
Weighted average number of common shares outstanding – basic and diluted		112,575,000			109,900,000

See accompanying notes to the consolidated financial statements.

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TurkPower Corporation

Consolidated Statements of Cash Flows

Unaudited

	Three Months Ended August 31,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(429,312	)	$	(500	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,152			-
Amortization of debt discount		80,866			-
Changes in operating assets and liabilities:
Receivables		(32,857	)		-
Prepaid expenses		1,570			-
Other current assets		(9,153	)		-
Accounts payable and accrued expenses		172,305			500
Related party payable		1,667			-
Deferred revenue		(42,178	)		-
CASH USED FOR OPERATING ACTIVITIES		(254,940	)		-

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(2,124	)		-
Long-term deposit		(619,661	)
CASH USED FOR INVESTING ACTIVITIES		(621,785	)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		635,550			-
Proceeds from issuance of debt		50,000			-
CASH PROVIDED BY FINANCING ACTIVITIES		685,550			-

EFFECT OF EXCHANGE RATES ON CASH		(7,660	)		-

NET DECREASE IN CASH		(198,835	)		-
CASH AT BEGINNING OF PERIOD		289,090			120
CASH AT END OF PERIOD	$	90,255		$	120

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest	$	22,868		$	-
Income taxes	$	-		$	-

See accompanying notes to the consolidated financial statements.

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TurkPower Corporation

Notes to Consolidated Financial Statements

August 31, 2010 and 2009

(Unaudited)

NOTE 1 – ORGANIZATION AND OPERATIONS

Global Ink Supply Co. was incorporated on November 4, 2004 in Delaware. On May 11, 2010, Global Ink Supply Co. changed its name to TurkPower Corporation (“Turkpower” or the “Company”). The accompanying consolidated financial statements include the accounts of its wholly owned US subsidiary, TurkPower USA Corporation and its wholly owned foreign subsidiary, Turkpower Enerji San. Ve Tic. A.S.. All significant intercompany balances and transactions have been eliminated in the consolidation.

On December 23, 2009, the Company entered into the consulting and service operations business, offering domestic and international clients consulting services. The Company acts as a full-service operator for wind, hydro, solar, and geothermal energy parks in Turkey. The Company also generates revenue by entering into agreements with other entities to provide consulting services to clients in the energy market.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying interim consolidated financial statements for the three months ended August 31, 2010 and 2009 are unaudited and 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 instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations realized during an interim period are not necessarily indicative of results to be expected for a full year. These financial statements should be read in conjunction with the information filed as part of the Company’s Annual Report on Form 10-K/A, which was filed on October 4, 2010.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Fair value of financial instruments

The carrying value of cash and cash equivalents, receivables, accounts payable and accrued expenses deferred revenue, and debt approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Concentration of credit risk

Cash is maintained in bank accounts which, at times, may exceed insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash.

Approximately 88% of the Company’s revenue for the three months ended August 31, 2010 was earned from one customer.

Reclassification

Certain accounts in the prior period were reclassified to conform with the current period financial statements presentation.

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NOTE 3 – GOING CONCERN

As shown in the accompanying consolidated financial statements, the Company had net losses of $429,312 for the three months ended August 31, 2010 and had a working capital deficit as of August 31, 2010 of $1,972,694. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company intends to raise additional working capital either through debt or equity financing. The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 – SHORT-TERM DEBT

On April 27, 2010, the Company borrowed €450,000 (Euros) ($555,692) from a third party. The loan is unsecured, bears annual interest at 25.0% and is payable in full on October 27, 2010.

On August 31, 2010, the Company borrowed $50,000 from a third party. The loan is unsecured, bears interest at 30.0% and is payable in full on March 1, 2011.

NOTE 5 – CONVERTIBLE DEBT

On various dates from December 1, 2009 to May 14, 2010, the Company issued convertible debentures totaling $800,000 to third party investors together with 800,000 common shares. The convertible debentures bear annual interest at 18%, mature in one year and, together with any unpaid interest, is convertible into common shares at a conversion rate of $0.25 per share. The relative fair value of the 800,000 common shares at the time of issuance was $130,662 and was recorded as a debt discount with a corresponding increase in equity. The discount is amortized to interest expense over the terms of the debentures using the effective interest method.

The convertible debentures were analyzed for a beneficial conversion feature at which time it was concluded that a beneficial conversion feature existed for convertible debentures totaling $275,000. The beneficial conversion feature was measured using the commitment-date stock price and was determined to be $192,065. This amount was recorded as a debt discount and is being amortized to interest expense over the terms of the debentures.

For the three months ended August 31, 2010, amortization expense recorded to interest amounted to $80,866.

The Company analyzed the convertible debentures for derivative accounting consideration and determined that derivative accounting does not apply to these instruments.

NOTE 6 – LINE OF CREDIT

The Company entered into a line of credit with a financial institution for 1,100,000 TRL ($699,105) on June 16, 2010, of which the Company borrowed 1,000,000 TRL ($635,550). Amounts borrowed under the line of credit bear interest at 11% annually and are due in full on November 30, 2010. The amount outstanding on the line of credit as of August 31, 2010 is $657,280.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

On April 29, 2010, the Company entered into a nonbinding share transfer and shareholders agreement with Endeks Holding and Avrasya Yapi for the purchase of 50% of their ownership in Exxaro Madencilik Sanayi ve Ticaret A.S. company (“Exxaro”) for €6,500,000 ($8,255,000 at August 31, 2010). Exxaro’s principal asset is an iron ore mine. In May 2010, the Company made an advance payment to the sellers of €1,000,000 ($1,284,673) and the balance was due June 15, 2010 but then extended for an indefinite period as a result of a 975,000 TRL ($619,661) payment made to the sellers on June 16, 2010. However as the purchase is not binding for the Company, the amount paid to the sellers has been classified as a long-term deposit in the consolidated balance sheet. The deposit is secured by real property owned by the sellers.

NOTE 8 - RELATED PARTY TRANSACTIONS

The Company has a related party payable to an executive of the Company for the reimbursement of expenses. As of August 31, 2010 and May 31, 2010, the amount owed to this executive was $23,784, and $21,492 respectively.

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.ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Information set forth herein contains "forward-looking statements" which can be identified by the use of forward-looking terminology such as "believes," "expects," "may,” “should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. No assurance can be given that the future results covered by the forward-looking statements will be achieved. The Company cautions readers that important factors may affect the Company’s actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company. These factors include the Company’s lack of historically profitable operations, dependence on key personnel, the success of the Company’s business, ability to manage anticipated growth and other factors identified in the Company's filings with the Securities and Exchange Commission, press releases and/or other public communications.

(a) Plan of Operation

We are currently organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business. We may also have to raise funds from a private placement of our securities pursuant to Regulation D under the Securities Act.

(b) Going Concern

For the three months ended August 31, 2010 and 2009, our revenues were $25,922 and $0, respectively. The increase in revenues was due to the commencement of our operations in Turkey.

For the three months ended August 31, 2010 and 2009, our professional fees were $34,209 and $500, respectively. The increase in professional fees was due to legal and accounting expenses incurred as a result of the commencement of our operations in Turkey.

For the three months ended August 31, 2010 and 2009, our selling, general and administrative expenses were $246,985 and $0, respectively. The increase in selling, general and administrative expenses was largely due to payroll related expenses, travel, vehicle expenses and consulting expenses incurred in connection with the commencement of our operations in Turkey.

For the three months ended August 31, 2010 and 2009, we recorded other expense of $174,040 and $0, respectively. The increase in other expense was largely due to interest expense incurred in connection with our short-term debt, convertible debt and line of credit.

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(d) Liquidity and Capital Resources

At August 31, 2010, we had cash of $90,255, as compared to $289,090 at May 31, 2010. This decrease was a result of cash used in operating activities of $254,940 and cash used in financing activities of $621,785 partially offset by cash provided by financing activities of $685,550.

During the next 12 months we anticipate incurring costs related to:

(i) filing of Exchange Act reports, and

(ii) costs relating to consummating an acquisition.

We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned by or invested in us by our stockholder, management or other investors.

We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

Our officer/director has not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risk s.

Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such a ssets.

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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.

Critical Accounting Policies

Use of estimates

Fair value of financial instruments

Seasonality

To date, we have not noted any significant seasonal impacts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. The Company does not undertake any specific actions to limit those exposures.

ITEM 4. CONTROLS AND PROCEDURES.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the SEC under the Securities Exchange Act of 1934 (“Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. These disclosure controls were not effective as of August 31, 2010.

We have determined that we have a material weakness relating to the Company not having personnel with knowledge of generally accepted accounting principles. Our executive management does not possess accounting expertise and our Company does not have an audit committee. This weakness was due to our lack of working capital to hire additional staff during the period covered by this report. We intend to obtain this knowledge of generally accepted accounting principles by hiring a contractor and/or hiring additional accounting personnel.

Changes in Internal Controls over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting, known to executive management that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

To the best knowledge of our officers and director, the Company is not a party to any legal proceeding or litigation.

ITEM 1A. RISK FACTORS.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

None

EXHIBITS

(a) Exhibit index

Exhibit Number		Description
31.1		Section 302 Certification Of Chief Executive Officer and Chief Financial Officer

32.1		Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 – Chief Executive Officer and Chief Financial Officer

(b) Reports on Form 8-K. During the fiscal quarter ended August 31, 2010, the Company filed the following Current Reports on Form 8-K:

On July 13, 2010, the Company filed an amended Current Report on Form 8-K disclosing that the Company had dismissed its registered public accounting firm Li & Company, PC and that the Company had approved the engagement of MaloneBailey, LLP as its new independent registered accounting firm.

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SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Exchange Act, TurkPower Corporation (formerly Global Ink Supply Co.) has duly caused this report to be signed on its behalf by the undersigned persons, and in the capacities so indicated.

October 15, 2010

	TURKPOWER CORPORATION
	(Registrant)

	By: /s/Aykut Ferah
	Name: Aykut Ferah
	Title: Chief Executive Officer and Chief Financial Officer

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