Green Planet 10-Q 2010 Q1 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 333-136583

GREEN PLANET GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada	41-2145716
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
7430 E. Butherus, Suite D, Scottsdale, AZ	85260
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:	(480) 222-6222

(Not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    

Yes þ 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.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    o Accelerated filer    o Non-accelerated filer   o Smaller reporting company    þ

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

Yes o No þ

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, August 19, 2008:  $0.001 par value common stock 128,476,944 shares outstanding.

INDEX

	Page
PART I – Financial Information		3
Item 1.  Financial Statements		3
Three Months Ended June 30, 2009 and 2008
Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and March 31, 2009		3
Consolidated Statements of Operations for the Three Months Ended June 30, 2009 and 2008 (Unaudited)		4
Consolidated Statements of Stockholders’ Equity/(Deficit) for the Three Months Ended June 30, 2009 and 2008 (Unaudited)		5
Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2009 and 2008 (Unaudited)		6
Notes to Consolidated Financial Statements June 30, 2009 and 2008 (Unaudited)		7–30
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3.  Quantitative and Qualitative Disclosure About Market Risk		41
Item 4.  Controls and Procedures		41
PART II – Other Information		42
Item 1. Legal Proceedings		42
Item 1A.  Risk Factors		42
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 3.  Defaults Upon Senior Securities		42
Item 4.  Submission of Matters to a Vote of Security Holders		42
Item 5.  Other Information		42
Item 6.  Exhibits		42
Signatures		43

2

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

Green Planet Group, Inc. and Subsidiaries

Consolidated Balance Sheets

	June 30,			March 31,
	2009			2009
ASSETS	(Unaudited)			(Restated)
Current Assets:
Cash and cash equivalents	$	1,841,857		$	470,288
Accounts receivable, net		4,989,858			4,349,866
Inventory		401,503			369,403
Prepaid expenses		1,842,637			1,654,431
Total Current Assets		9,075,855			6,843,988
Plant, plant and equipment, net of accumulated depreciation		1,857,448			1,900,834
Other Assets:
Other assets		49,338			295,372
Intangible assets		3,548,693			3,745,025
Goodwill		8,979,822			8,979,822
Total Other Assets		12,577,853			13,020,219
Total Assets	$	23,511,156		$	21,765,041
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,116,340		$	1,210,126
Accounts payable – Affiliates		235,612			165,565
Accrued liabilities		8,767,168			4,765,026
Cashless warrant liability		140,548			57,876
Notes payable and amounts due within one year		6,522,336			6,536,202
Convertible loans payable		4,727,050			5,054,100
Derivative warrant liability		1,631,952			643,750
Total Current Liabilities		23,141,006			18,432,645
Notes payable due after one year		9,395,318			9,061,650
Total Liabilities		32,536,324			27,494,295
Stockholders' Equity:
Preferred Stock, $0.001 par value, 1,000,000 authorized; no shares issued and outstanding		–			–
Common Stock, $0.001 par value, 250,000,000 authorized, issued and outstanding 124,406,944 and 117,440,764 at June 30, 2009 and March 31, 2009, respectively		124,407			117,441
Additional paid-in capital		15,095,032			14,714,148
Accumulated deficit		(24,244,607	)		(20,560,843	)
Total Stockholders' Equity (Deficit)		(9,025,168	)		(5,729,254	)
Total Liabilities and Stockholders' Equity (Deficit)	$	23,511,156		$	21,765,041

See accompanying notes to these consolidated financial statements.

3

Green Planet Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	For the three months ended June 30,
	2009			2008
	(Unaudited)			(Unaudited/Restated)
Revenue:
Sales, net of returns and allowances	$	16,697,904		$	1,836,421
Cost of sales		14,721,519			726,776
Gross Profit		1,976,385			1,109,645
Operating Expenses:
Selling, general and administrative		3,580,636			681,703
Depreciation and amortization		239,718			61,966
Allowance for bad debts		414,070			–
Total Operating Expenses		4,234,424			743,669
Income/(Loss) From Operations		(2,258,039	)		365,976
Other Income and (Expense):
Other income		1,509			375
Interest expense		(1,427,234	)		(1,269,382	)
Loss before provision for income taxes		(3,683,764	)		(903,031	)
Provision for/(Benefit of) income taxes		–			–
Net Loss	$	(3,683,764	)		(903,031	)
Earnings (Loss) per share:
Basic and diluted loss per share	$	(0.03	)	$	(0.01	)
Weighted average shares outstanding		121,654,349			61,913,414

See accompanying notes to these consolidated financial statements.

4

Green Planet Group, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity/(Deficit)

(Unaudited)

					Restated Additional		Restated Accumulated
	Shares		Common Stock		Paid-in Capital		Deficit			Total
Balance March 31, 2008		54,885,103	$	54,885	$	9,779,844	$	(17,888,473	)	$	(8,053,744	)
Shares issued for cash		5,606,000		5,606		966,324					971,930
Shares issued services of employees and others		4,300,000		4,300		948,700					953,000
Stock option valuation						85,383					85,383
Net loss for the three months ended June 30, 2008								(903,031	)		(903,031	)
Balance June 30, 2008		64,791,103	$	64,791	$	11,780,251	$	(18,791,504	)	$	(6,946,462	)
Balance March 31, 2009		117,440,764	$	117,441	$	14,714,148	$	(20,560,843	)	$	(5,729,254	)
Shares issued for cash		4,380,000		4,380		115,620					120,000
Shares issued for services of consultants and others		2,586,180		2,586		164,614					167,200
Stock option expense						100,650					100,650
Net loss for the three months ended June 30, 2009								(3,683,764	)		(3,683,764	)
Balance June 30, 2009		124,406,944	$	124,407	$	15,095,032	$	(24,244,607	)	$	(9,025,168	)

See accompanying notes to these consolidated financial statements.

5

Green Planet Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	For the three months ended
	June 30,			June 30,
	2009			2008
	(Unaudited)			(Unaudited/Restated)
Cash Flows from Operating Activities:
Net Loss	$	(3,683,764	)	$	(903,031	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		239,718			61,966
Bad debt provision		414,070			–
Amortization of debt discount		25,676			100,254
Shares issued for services and interest		167,200			143,582
Stock option costs		100,650			85,383
Change in derivative valuation		661,152			1,070,548
Cashless warrant conversion		82,672			37,815
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable		(1,054,062	)		(1,050,526	)
Inventories		(32,100	)		(175,939	)
Prepaid expenses		(188,206	)		(14,096	)
Other assets		246,034			–
Accounts payable		(93,787	)		(145,838	)
Accounts payable - affiliates		70,047			–
Accrued liabilities		4,002,142			(175,369	)
Cash provided (used) by operating activities		957,442			(965,251	)
Investing Activities:
Capital expenditures		–			(6,349	)
Cash used by investing activities		–			(6,349	)
Financing Activities:
Net borrowings of debt		294,127			182,000
Repayment of debt		–			(216,792	)
Net proceeds from issuance of common shares		120,000			971,930
Net cash provided by financing activities		414,127			937,138
Net increase (decrease) in cash		1,371,569			(34,462	)
Cash and cash equivalents at beginning of period		470,288			59,544
Cash at end of period	$	1,841,857		$	25,082
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	383,280		$	60,768
Income taxes	$	–		$	–
Non-Cash Activities:
Common stock issued for services		(167,200	)		(953,000	)
Common stock issued for services		2,586			4,300
Additional paid-in capital from conversion of note payable		164,614			948,700
	$	–		$	–

See accompanying notes to these consolidated financial statements.

6

Green Planet Group, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended June 30, 2009 and 2008 (Unaudited)

Note 1 – The Company

The Company – Green Planet Group, Inc.  (which is referred to herein together with its subsidiaries as “Green Planet,” “GPG,” “the Company,” "we", "us" or "our"), formerly EMTA Holdings, Inc. and before that Omni Alliance Group, Inc., was organized and incorporated in the state of Nevada. On March 31, 2006, we changed our name from Omni Alliance Group, Inc. to EMTA Holdings, Inc., and on May 22, 2009 we changed the name through merger with a wholly owned subsidiary to Green Planet Group, Inc. Our common stock now trades on the OTC-Bulletin Board market under the trading symbol "GNPG:OB".

Nature of the Business – We operate in two industry segments: 1) a specialty energy conservation chemical company that produces and supplies technologies to the global transportation, industrial and consumer markets and 2) an employee staffing business which primarily provides staffing to the light industrial market. The energy technologies include gasoline, oil and diesel additives for engines and other transportation-related fluids and industrial lubricants.

Presentation of Interim Statements – The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q for small business filers. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Form 10-K for the years ended March 31, 2009 and 2008. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year.

Restatement of Prior Financial Statements – See Note 17 Restatement of Prior Financial Statements.

Going Concern Uncertainty

The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.

The Company anticipates that future sales of equity and debt securities to fully implement it’s business objectives and to raise working capital to support and preserve the integrity of the corporate entity will be necessary. There is no assurance that the Company will be able to obtain additional funding through the sales of additional equity or debt securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

If no additional capital is received to successfully implement the Company’s business plan, the Company will be forced to rely on existing cash in the bank and upon additional funds which may or may not be loaned by management and/or significant stockholders to preserve the integrity of the corporate entity at this time. In the event, the Company is unable to acquire sufficient capital, the Company’s ongoing operations would be negatively impacted.

7

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach our goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement its objectives.

Note 2 – Significant Accounting Policies

Consolidation – The consolidated financial statements include the accounts of Green Planet Group, Inc. and its consolidated subsidiaries and wholly-owned limited liability company. All significant intercompany transactions and profits have been eliminated.

Use of Estimates – The preparation of financial statements in conformity with United States generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The more significant estimates relate to revenue recognition, contractual allowances and uncollectible accounts, intangible assets, accrued liabilities, derivative liabilities, income taxes, litigation and contingencies. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates.

Cash Equivalents – The Company invests its excess cash in short-term investments with various banks and financial institutions. Short-term investments are cash equivalents, as they are part of the cash management activities of the Company and are comprised of investments having maturities of three months or less when purchased.

Allowance for Doubtful Accounts – The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. The allowance for doubtful accounts was $1,220,916 and $806,846 at June 30, 2009 and March 31, 2009, respectively.

Inventories – Inventories are stated at the lower of cost or market value. Cost of inventories is determined by the first-in, first-out (FIFO) method. Obsolete or abandoned inventories are charged to operations in the period that it is determined that the items are not longer viable sales products.

Property, Plant and Equipment – Property, plant and equipment are carried at cost. Repair and maintenance costs are charged against operations while renewals and betterments are capitalized as additions to the related assets. The Company depreciates it assets on a straight line basis. Estimated useful lives for the equipment ranges from 3 to 10 years and the buildings are being depreciated over 31 years.

8

Intangible Assets – Intangible assets consist of patents, trademarks, intellectual property and government approval. For financial statement purposes, identifiable intangible assets with a defined life are being amortized using the straight-line method over the estimated useful lives of the assets. Costs incurred in connection with patent, trademark applications and approvals from governmental agencies such as the Environmental Protection Agency, including legal fees, patent and trademark fees and specific testing costs, are capitalized and amortized over an estimated economic life of the asset, generally seven years, commencing upon the grant or approval date. Costs subsequent to grant date are expensed as incurred.

Impairment of Long-Lived Assets – In accordance with the Statement of Financial Accounting Standards No. 144 (“FAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the sum of the expected future cash flows of an asset is less than its carrying value, an impairment measurement is required. Impairment charges are recorded to the extent that an asset’s carrying value exceeds fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented.

Fair Value Disclosures – The carrying values of cash, accounts receivable, deposits, prepaid expenses, accounts payable and accrued expenses generally approximate the respective fair values of these instruments due to their current nature.

The fair values of debt instruments for disclosure purposes only are estimated based upon the present value of the estimated cash flows at interest rates applicable to similar instruments.

The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features that are indexed to the Company’s common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within the control of the Company. In such instances, net-cash settlement is assumed for financial accounting and reporting, even when the terms of the underlying contracts do not provide for net-cash settlement. Such financial instruments are initially recorded at fair value and subsequently adjusted to fair value at the close of each reporting period.

Revenue Recognition – Revenues are recognized at the time of shipment of products to customers, or at the time of transfer of title, if later, and when collection is reasonably assured. All amounts in a sales transaction billed to a customer related to shipping and handling are reported as revenues.  Staffing revenue is recognized at the completion of each billing cycle to the customer after completion of the work.  The billing cycle is generally weekly.

Provisions for sales discounts and rebates to customers are recorded, based upon the terms of sales contracts, in the same period the related sales are recorded, as a deduction to the sale. Sales discounts and rebates are offered to certain customers to promote customer loyalty and encourage greater product sales.  As a general rule, the Company does not charge interest on its accounts receivables.

Income Taxes – We provide for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” SFAS No. 109 requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of the assets and liabilities.

The recording of a net deferred tax asset assumes the realization of such asset in the future; otherwise a valuation allowance must be recorded to reduce this asset to its net realizable value. The Company considers future pretax income and, if necessary, ongoing prudent and feasible tax planning strategies in assessing the need for such a valuation allowance. In the event that the Company determines that it may not be able to realize all or part of the net deferred tax asset in the future, a valuation allowance for the deferred tax asset is charged against income in the period such determination is made. The Company has recorded full valuation allowances as of June 30, 2009 and 2008.

9

Stock-Based Compensation

We account for stock-based awards to employees and non-employees using the accounting provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123 — Accounting for Stock-Based Compensation, which provides for the use of the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Shares of common issued in connection with acquisitions are also recorded at their estimated fair values. The fair value of equity securities is determined by management based upon recent private stock sales to third parties.

In December 2004, the FASB revised its SFAS No. 123 (“SFAS No. 123R”). The revision establishes standards for the accounting of transactions in which an entity exchanges its equity instruments for goods or services, particularly transactions in which an entity obtains employee services in share-based payment transactions. The revised statement requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which the employee is required to provide service in exchange for the award. The provisions of the revised statement are effective for financial statements issued for the first interim or annual reporting period beginning after June 15, 2005, with early adoption encouraged.

Concentrations of Credit Risks – Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Although the amount of credit exposure to any one institution may exceed federally insured amounts, the Company limits its cash investments to high-quality financial institutions in order to minimize its credit risk. The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral. Exposure to losses on receivables is dependent on each customer's financial condition. At June 30, 2008 the Company had a receivable from one foreign customer in the amount of $1,317,809.  The balance of the accounts receivable are primarily from retailers and distributors located in the United States.

Recent Accounting Pronouncements

Fair Value Measurement

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”), as amended in February 2008 by FSP FAS 157-2, Effective Date of FASB Statement No. 157. The provisions of SFAS 157 were effective for the Company as of April 1, 2008. However, FSP FAS 157-2 deferred the effective date for all nonfinancial assets and liabilities, except those recognized or disclosed at fair value on an annual or more frequent basis, until April 1, 2009. SFAS 157 defines fair value, creates a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. The adoption did not have a material impact on the Company’s consolidated financial statements for the current period.

Fair Value of a Financial Asset When the Market is Not Active

In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active (FSP FAS 157-3), which clarifies the application of SFAS 157 in a market that is not active. Additional guidance is provided regarding how the reporting entity’s own assumptions should be considered when relevant observable inputs do not exist, how available observable inputs in a market that is not active should be considered when measuring fair value, and how the use of market quotes should be considered when assessing the relevance of inputs available to measure fair value. FSP FAS 157-3 became effective immediately upon issuance. Its adoption did not have a material impact on the Company’s consolidated financial statements in fiscal 2010.

10

Fair Value When the Volume and Level of Activity Significantly Decreased

 In April 2009 the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4), which clarifies the application of SFAS 157 when there is no active market or where the price inputs being used represent distressed sales. Additional guidance is provided regarding estimating the fair value of an asset or liability (financial and nonfinancial) when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. The Company adopted FSP FAS 157-4 as of June 30, 2009, which was the required effective date. Its adoption did not have a material impact on the Company’s consolidated financial statements at June 30, 2009.

Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock 

In June 2008, the FASB ratified EITF 07-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock   (EITF 07-5). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The adoption of this pronouncement effective April 1, 2009, required the Company to perform additional analyses on both its freestanding equity derivatives and embedded equity derivative features. The adoption of EITF 07-05 did not have a material effect on the Company’s consolidated financial statements at June 30, 2009.

Fair Value Option

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115 (“SFAS 159”), which permits all entities to choose to measure eligible items at fair value on specified election dates. The associated unrealized gains and losses on the items for which the fair value option has been elected shall be reported in earnings. SFAS 159 became effective for the Company as of April 1, 2008; however, the Company has not elected to utilize the fair value option on any of its financial assets or liabilities under the scope of SFAS 159.

11

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). The objective of SFAS 141(R) is to improve the information provided in financial reports about a business combination and its effects. SFAS 141(R) states that all business combinations (whether full, partial or step acquisitions) must apply the “acquisition method.” In applying the acquisition method, the acquirer must determine the fair value of the acquired business as of the acquisition date and recognize the fair value of the acquired assets and liabilities assumed. As a result, it will require that certain forms of contingent consideration and certain acquired contingencies be recorded at fair value at the acquisition date. SFAS 141(R) also states acquisition costs will generally be expensed as incurred and restructuring costs will be expensed in periods after the acquisition date. This statement is effective for business combination transactions for which the acquisition date is on or after April 1, 2009, and earlier application is prohibited. The Company will adopt this statement on April 1, 2009. The impact of the adoption of SFAS 141(R) on the Company’s financial statements will largely be dependent on the size and nature of the business combinations completed after the adoption of this statement. While SFAS 141(R) generally applies only to transactions that close after its effective date, the amendments to SFAS 109 and FIN 48 are applied prospectively as of the adoption date and will apply to business combinations with acquisition dates before the effective date of SFAS 141(R).  Adoption of this statement did not have a material effect on the results of operations or statement of position for the period ended June 30, 2009.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133 (“SFAS 161”) . This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted SFAS 161 on April 1, 2009, the beginning of the Company’s first fiscal 2010 quarter.

GAAP Hierarchy

In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 will become effective for periods ending after June 30, 2009.  Green Planet does not expect the adoption of SFAS No. 162 to have a material effect on its results of operations and financial position.

Convertible Debt

In May 2008, the FASB issued Financial Statement Position (FSP) Accounting Principles Board (APB) 14-1 "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)." FSP APB 14-1 requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 on a retroactive basis and has been adopted by the Company in the first quarter of fiscal 2010.

12

Useful Life of Intangible Assets

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets. The FSP states that in developing assumptions about renewal or extension options used to determine the useful life of an intangible asset, an entity needs to consider its own historical experience adjusted for entity-specific factors. In the absence of that experience, an entity shall consider the assumptions that market participants would use about renewal or extension options. This FSP is to be applied to intangible assets acquired after January 1, 2009. The adoption of this FSP did not have an impact on the Company’s financial statements.

Interim Disclosures about Fair Value of Financial Instruments

In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments . The FSP amends SFAS No. 107 “Disclosures about Fair Value of Financial Instruments” to require an entity to provide disclosures about fair value of financial instruments in interim financial information. This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The adoption of this FSP did not have an impact on the Company’s financial statements.

Contingencies in Business Combinations

In April 2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. This FSP requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. If fair value cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with SFAS No. 5, “Accounting for Contingencies” and FASB Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss”. Further, the FASB removed the subsequent accounting guidance for assets and liabilities arising from contingencies from SFAS No. 141(R). The requirements of this FSP carry forward without significant revision the guidance on contingencies of SFAS No. 141, “Business Combinations”, which was superseded by SFAS No. 141(R) (see previous paragraph). The FSP also eliminates the requirement to disclose an estimate of the range of possible outcomes of recognized contingencies at the acquisition date. For unrecognized contingencies, the FASB requires that entities include only the disclosures required by SFAS No. 5. This FSP was adopted effective April 1, 2009. There was no impact upon adoption, and its effects on future periods will depend on the nature and significance of business combinations subject to this statement.

Other Than Temporary Impairments

In April 2009, the FASB issued FASB Staff Position (FSP) No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. FSP No. FAS 115-2 and FAS 124-2 improves the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The effective date for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted.  The adoption of this FSP did not have an impact on the Company’s financial statements.

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Subsequent Events

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” which requires entities to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. The statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009, and shall be applied prospectively. The adoption of SFAS No. 165 did not have a material impact on the Company’s consolidated financial statements.

Transfers of Financial Assets

 In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets,” which is an amendment of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. This statement will improve the relevance, representation faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets. It will also take into account the effects of a transfer on its financial position, financial performance, and cash flows, and a transferor’s continuing involvement. SFAS No. 166 is effective for annual periods beginning after November 15, 2009.  This statement is effective for the Company beginning April 1, 2010 and has had no material impact on the financial statements.

Amendments to FASB interpretation No. 46(R)

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB interpretation No. 46(R),” establishes how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated. This statement improves financial reporting by enterprises involved with variable interest entities, which addresses the effects on certain provisions of FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” as a result of the elimination of the qualifying special-purpose entity concept in FASB No. 166, “Accounting for Transfers of Financial Assets,” and constituent concerns about the application of certain key provisions of Interpretation 46(R). SFAS No. 167 is effective after November 15, 2009. This statement is effective for the Company beginning January 1, 2010 and is expected to have no material impact on the financial statements.

Codification and the Hierarchy of Generally Accepted Accounting Principles

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” which replaces SFAS No. 162 and establishes the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. On the effective date for financial statements issued for interim and annual periods ending after September 15, 2009, the Codification will supersede all then–existing non-SEC accounting and reporting standards. The Company has determined that the adoption of SFAS No. 168 will not have a material impact on the financial statements.

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Note 3 – Inventories

Inventory consists of finished goods and raw material as follows:  

	June 30, 2009		March 31,  2009
		(Unaudited)
Finished goods	$	332,178	$	173,523
Raw material		69,325		195,880
	$	401,503	$	369,403

Note 4 – Property, Plant and Equipment

At June 30, 2009 and March 31, 2009 property, plant and equipment and computers consisted of the following:

	June 30, 2009			March 31, 2009
		(Unaudited)
Property and plant	$	1,453,650		$	1,453,650
Equipment and computers		839,690			839,690
Less accumulated depreciation		(435,892	)		(392,506	)
Net property, plant and equipment	$	1,857,448		$	1,900,834

During the three months ended June 30, 2009 and 2008 depreciation expense was $43,386 and $30,286, respectively.

Note 5 – Intangible Assets and Goodwill

Intangible assets consist of technology of production and license rights under the Environmental Protection Agency to market one of the products acquired in the acquisition of White Sands, L.L.C. on March 31, 2006. The Company is amortizing this asset over its estimated useful life of seven years on a straight line basis. For the three months ended June 30, 2009 and 2008 amortization was $31,681 in each period. The customer relationships are the value of the purchased business relationships acquired as part of the purchase by Lumea of the staffing business on March 1, 2009.  The amortization period of this intangible is 5 years. For the period ended June 30, 2009 the amortization expense was $164,651.

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Intangible assets subject to amortization:

	Weighted	June 30, 2009
	Average	Gross Carrying		Accumulated		Net Carrying
	Useful Life	Amount		Amortization		Amount
Intangible assets subject to amortization:
EPA licenses	7 years	$	887,055	$	411,847	$	475,208
Customer relationships	5 years		3,293,020		219,535		3,073,485
		$	4,180,075	$	631,382	$	3,548,693
Goodwill not subject to amortization:
Goodwill:
Goodwill		$	8,979,822	$	–	$	8,979,822
		$	8,979,822	$	–	$	8,979,822
	Weighted	March 31, 2009
	Average	Gross Carrying		Accumulated		Net Carrying
	Useful Life	Amount		Amortization		Amount
Intangible assets subject to amortization:
EPA licenses	7 years	$	887,055	$	380,166	$	506,889
Customer Relationships	5 years		3,293,020		54,884		3,238,136
		$	4,180,075	$	435,050	$	3,745,025
Goodwill not subject to amortization:
Goodwill:
Goodwill		$	8,855,747	$	–	$	8,855,747
		$	8,855,747	$	–	$	8,855,747

The scheduled amortization to be recognized over the next five years is as follows:

June 30, 2010	$	785,330
June 30, 2011	$	785,330
June 30, 2012	$	785,330
June 30, 2013	$	753,601
June 30, 2014	$	439,102

Note 6 – Accrued Liabilities

Accrued liabilities consist of the following as of June 30, 2009 and March 31, 2009:

	June 30, 2009		March 31, 2009
Accrued marketing and advertising	$	300,000	$	300,000
Accrued reimbursement to product testing partner		978,151		978,151
Accrued interest		1,028,952		804,717
Accrued payroll, taxes and benefits		6,136,735		2,446,929
Other		323,330		235,229
	$	8,767,168	$	4,765,026

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Note 7 – Notes and Contracts Payable

As of June 30, 2009 and March 31, 2009 notes and contracts payable consist of the following:

	June 30,		March 31,
	2009		2009
Revolving line of credit against factored Lumea receivables (2)	$	2,789,548	$	2,055,015
Bank loans, payable in installments		349,373		359,803
Mortgage loan payable, monthly payments of principal  and  interest at 3 month LIBOR plus 4.7% (1)		806,853		806,853
Payments due seller of XenTx Lubricants		254,240		254,240
Loan from Dyson		60,000		60,000
Notes payable		1,336,692		1,475,380
Loans from individuals, due within one year		538,751		461,000
Purchase note payable		1,575,139		1,569,139
Purchase note 1		5,425,815		5,667,626
Purchase note 2		2,781,243		2,888,796
Total		15,917,654		15,597,852
Less current portion		6,522,336		6,536,202
Long-term debt	$	9,395,318	$	9,061,650

____________

(1)	In conjunction with the acquisition of Dyson, the mortgage became payable as a result of the change of control of that company. The Company is in the process of refinancing the property.
(2)	The Company maintains a $7 million line of credit relating to its factored accounts receivable.

Bank Loans consist of two loans that became due in the first quarter of 2009; these loans are secured by receivables, inventory and equipment in Durant, Oklahoma.  The Company is working to replace these loans and has arranged a payment schedule to retire these loans. The Mortgage Loan Payable has matured as a result of the change in control of the operations in Durant.  The Company continues to make principal and interest payments while the Company obtains a replacement loan on the property.  Interest is reset quarterly at Libor plus 4.7%.

The amounts due sellers bear interest at a rate of 8.0% and are due October 31, 2009.

Certain notes are in default and have been included as current at June 30, 2009.

Substantially all of the staffing receivables are pledged as collateral for the revolving line of credit.  At June 30 and March 31, 2009, the Company had pledged receivables of $3,085,510 and $2,532,926, respectively.

The balance of the notes payable consist of commercial loans of a vehicles and equipment in the normal course of business.

The Loans from individuals includes three loans which are all due within one year and bear interest from 9% to 12%.

 

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Notes payable include amounts due after one year consists of the loan from Purchase Note Payable, Purchase Notes 1 and 2, all of which are secured by all of the business assets of Lumea.  Maturities for the remainder of the loans are as follows:

2011	$	1,272,079
2012	$	1,319,815
2013	$	1,369,483
2014	$	4,153,035
Thereafter	$	1,280,906

Note 8 – Fair Value Measurements

The Company adopted SFAS No. 157 as of April 1, 2009. SFAS No. 157 applies to certain assets and liabilities that are being measured and reported on a fair value basis. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosure about fair value measurements.  SFAS No. 157 enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. SFAS No. 157 requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1:  Quoted market prices in active markets for identical assets or liabilities.

Level 2:  Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3:  Unobservable inputs that are not corroborated by market data.

The Company records liabilities related to its warrants (See Note 11 – Derivative Financial Instruments) and the beneficial conversion feature of its convertible debentures (See Note 9 – Convertible Debt) at their fair market values as provided by SFAS No. 157.

 The following table provides fair market measurements of the warrant and beneficial conversion feature liabilities as of June 30, 2009:

	Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3)
Warrant liabilities	$	1,631,952
Beneficial conversion feature liabilities		2,200,000
	$	3,831,952

The change in fair market value of the warrant and beneficial conversion feature liabilities is included in interest expense in the Consolidated Statements of Operations.

The following table provides a reconciliation of the beginning and ending balances of the warrant and beneficial conversion feature liabilities as of June 30, 2009:

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	Warrant liability		Beneficial conversion feature liability		Total
Beginning balance April 1, 2009	$	643,750	$	2,527,050	$	3,170,800
Change in fair market value of beneficial conversion liabilities due to partial maturity of note and conversion feature		–		327,050		327,050
Change in fair market value of warrant and beneficial conversion liabilities		988,202		–		988,202
Ending balance June 30, 2009	$	1,631,952	$	2,200,000	$	3,831,952

Certain financial instruments are carried at cost on the consolidated balance sheets, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, other short-term liabilities, and capital lease obligations.

Note 9 – Convertible Debt

The Company entered into a Convertible Loan Agreement which also entitled the lenders to warrants and to convert the loans, at their option, to common stock of the Company. The debt is convertible at a rate of 50% of the then current market price at the time of conversion. At June 30, 2009, the value of the 6% Convertible Notes, with interest quarterly, was as follows:

Maturity	Face Amount		Conversion Derivative		Balance
April 28, 2009 (Matured)	$	327,050	$	–	$	327,050
August 17, 2009		700,000		700,000		1,400,000
October 28, 2009		300,000		300,000		600,000
November 10, 2009		1,200,000		1,200,000		2,400,000
Total	$	2,527,050	$	2,200,000	$	4,727,050

Interest expense for the quarter ended June 30, 2009 and 2008 was $34,505 and $38,470, respectively.

Note 10 – Income Taxes

Provision/benefit for income taxes for the periods ended June 30, 2009 and 2008 consisted of the follows:

	For the three months ended June 30,
	2009				2008
Federal income taxes/(benefit)		$	819,152			$	91,956
State income taxes			180,452				20,257
Total			(999,604	)			112,213
Valuation allowance			999,604				(112,213	)
Net tax provision/benefit		$	–			$	–

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Through June 30, 3009, we recorded a valuation allowance of $6,870,820 against deferred income tax assets primarily associated with tax loss carry forwards. Our significant operating losses experienced in prior years establishes a presumption that realization of these income tax benefits does not meet a “more likely than not” standard.  For the quarter ended June 30, 2009 and 2008 we recognized $999,604 and $112,213 respective of the valuation allowance to offset the provision for income taxes for this period.

We have net operating loss carry forwards of approximately $16,431,432. Our net operating loss carry forwards will expire between 2025 and 2030.

Future realization of the net operating losses is dependent on generating sufficient taxable income prior to their expiration. Tax effects are based on a 34% Federal income tax rate. The Federal net operating losses expire as follows:

Expiration	Amount
2025	$	1,524,541
2026		5,132,298
2027		3,052,902
2028		2,251,029
2029		2,295,008
2030		2,175,654
Total	$	16,431,432

Note 11 – Derivative Financial Instruments

In connection with various financings through November 10, 2006, the Company has issued warrants to purchase shares of common stock in conjunction with the convertible notes to purchase 12,000,000 shares of common stock at an exercise price of $2.50 per share. The Company also issued warrants to a broker in the transaction for the exercise of 70,000 shares of common stock at an exercise price of $2.50. These warrants expire if not exercised at various dates in 2013 through November 10, 2013. At June 30, 2009, all of the 12,000,000 warrants have been issued entitling the lender to one share for each warrant at an exercise price of $2.50 per share.

The agreements include registration rights and certain other terms and conditions related to share settlement of the embedded conversion features and the warrants. In this instance, EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”, requires allocation of the proceeds between the various instruments and the derivative elements carried at fair values.

In additional, in conjunction with financings, purchases and consulting transactions between April 1, 2007 and March 31, 2009 the Company issued additional warrants, net of expirations, to purchase 8,725,000 shares of the Company’s common stock at exercise prices between $0.04 and $2.50 per share.  At June 30, 2009, 2,350,000 warrants were not exercisable and become exercisable at a rate 150,000 shares per quarter. No warrants have been exercised.

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At June 30, 2009 there were 20,725,000 shares subject to warrants at a weighted average exercise price of $1.69.

		Number of Shares		Weighted Average
		Subject to Outstanding		Remaining
Exercise		Warrants		Contractual Life
Price		and Exercisable		(years)
$	0.04		150,000	7.67
$	0.75		5,775,000	3.00
$	2.50		12,450,000	4.01
			18,375,000
Not exercisable			2,350,000
			20,725,000

In addition to the spot price of the stock and remaining term of the warrant, other factors used in the binomial model included in the analysis at June 30, 2009 were the volatility of 230.5%, risk free rate of between 0.56% and 3.19% and a dividend rate of $0 per period.

Note 12 – Commitments and contingencies

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash. The Company periodically evaluates the credit worthiness of financial institutions, and maintains cash accounts only in large high quality financial institutions, thereby minimizing exposure for deposits in excess of federally insured amounts.

Lease Commitments

The Company has lease agreements for office space in Scottsdale, Arizona and for 26 offices throughout the United States. The remaining lease commitment for the two Scottsdale office are 3 and 5 years and the other offices is year to year or month-to-month. The following table sets forth the aggregate minimum future annual lease commitments at June 30, 2009 under all non-cancelable leases for fiscal years ending March 31:

2010	$	374,923
2011		292,276
2012		225,921
2013		110,350
2014		63,064
Thereafter		110,052
	$	1,176,586

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Lease expense for the quarters ended June 30, and 2008 were $146,614 and $19,856, respectively.  The total of all scheduled lease payments, assuming all locations are continued at the same rates, is $623,315 per year.

Note 13 – Company Stock

Preferred Stock

At June 30, 2009, the Company had 1,000,000 shares of $0.001 par value authorized and no outstanding or issued shares.

Common Stock

At June 30, 2009, the Company had 250,000,000 shares authorized of $0.001 par value common stock, of which issued and outstanding shares were 124,406,944.

During the first quarter ended June 30, 2009, the Company issued 4,380,000 par value $0.001 common shares of stock for net proceeds of $120,000.  Also during the period, the Company issued an aggregate of 2,586,180 common shares for services to consultants recognizing an aggregate addition to stockholders’ equity of $167,200 based on the market price of the stock at the date of the agreements.  The services will be recognized over the next one year and the related expense is being recognized over the service period.

Warrants

No warrants have been exercised.

At June 30, 2009 the status of the outstanding warrants is as follows:

Issue Date	Shares Exercisable	Weighted Average Exercise Price		Expiration Date
September 27, 2005	450,000	$	2.50	September 26, 2010
April 29, 2006	1,866,667	$	2.50	April 28, 2013
June 28, 2006	5,000,000	$	2.50	August 10, 2013
August 17, 2006	1,633,333	$	2.50	August 17, 2013
October 28, 2006	700,000	$	2.50	October 28, 2013
November 10, 2006	2,800,000	$	2.50	November 10, 2013
May 21, 2007	500,000	$	.75	May 20, 2009
July 1, 2007	5,775,000	$	.75	June 30, 2012
Cashless April 20-November 10, 2006	700,000	$	2.50	April 29 - November 10, 2015
Cashless March 26, 2007	1,400,000	$	.75	March 26, 2010
Cashless July 1, 2007	519,750	$	.75	June 30, 2012
March 1, 2009	2,500,000 (1)	$	.04	March 1, 2017

____________

(1) Options are vested at 150,000 shares at the end of each fiscal quarter starting June 30, 2009.

The warrants have no intrinsic value at June 30, 2009 or 2008, except at June 30, 2008 the 150,000 warrants issued on March 1, 2009 became exercisable with an intrinsic value of $14,987 for the warrants exercisable and $254,791 for all of the warrants issued on that date.

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Stock Options

At March 31, 2009, the Company had one stock option plan under which grants were outstanding. The stock options outstanding are for grants issued under the Company’s 2007 Stock Incentive Plan.

The 2007 Stock Incentive Plan

During the fiscal year ended March 31, 2008, the Company adopted a stock option plan, entitled the “2007 Incentive Plan” (the “2007 Plan”), under which the Company may grant options to purchase up to 20,000,000 shares of common stock.

The 2007 Plan is administered by the Board of Directors or a Committee of the Board of Directors which has the authority to determine the persons to whom the options may be granted, the number of shares of common stock to be covered by each option grant, and the terms and provisions of each option grant. Options granted under the 2007 Plan may be incentive stock options or non-qualified options, and may be issued to employees, consultants, advisors and directors of the Company and its subsidiaries. The exercise price of options granted under the 2007 Plan may not be less than the fair market value of the shares of common stock on the date of grant, and may not be granted more than ten years from the date of adoption of the plan or exercised more than ten years from the date of grant.

The following table sets forth the status of the Company’s non-vested stock options as of June 30, 2009:

	Number of Options			Weighted-Average Grant-Date Fair Value
Non-vested as of March 31, 2008		5,415,000		$	.11
Granted
Forfeited		(450,000	)		–
Vested		(3,310,000	)		–
Non-vested as of March 31, 2009		1,655,000		$	.11
Granted		–			–
Forfeited		–			–
Vested		–			–
Non-vested as of June 30, 2009		1,655,000		$	.11

During the year ended March 31, 2008, the Company granted options to purchase an aggregate of 5,415,000 shares of common stock to employees, directors and consultants for services to be provided. These options are exercisable at $0.20 per share, and vest one third on October 1, 2008, April 1, 2009 and October 1, 2009 with an expiration of three years from the date of grant for all options. The Company has valued these at their fair value on the date of grant using the Hull-White enhanced option-pricing model.

Unrecognized stock-based compensation expense related to the unvested options at the issue date was approximately $525,165 which is being recognized over the vesting periods of 18 months. This estimate is based on the number of unvested options currently outstanding and could change based on the number of options granted or forfeited in the future.  During the quarters ended June 30, 2009 and 2008 the Company recognized expense of $100,649 and $85,383, respectively. During the next fiscal quarter the Company will recognize the remaining unamortized cost of $100,649 related to the remaining unvested options. These options have an intrinsic value at June 30, 2009 of $367,067.

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The assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates.

The Company based its expected volatility on the historical volatility of similar companies with consideration given to the expected life of the award. The Company intends to continue to consistently use this method until sufficient market acceptance of its stock has reached a stable level.

The risk-free interest rate used for each grant is equal to the U.S. Treasury yield in effect at the time of grant for instruments with a similar expected life.

The expected term of options granted was determined based on the historical exercise behavior of similar peer groups.

The Company has never declared or paid a cash dividend, and has no current plans to pay a cash dividend in the future.

SFAS 123(R) also requires that the Company recognize compensation expense for only the portions that are expected to vest. Therefore, the Company has estimated expected forfeitures of stock options with the adoption of SFAS 123(R). In developing a forfeiture rate estimate, the Company considered its historical experience. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in future periods.

The fair value of options were estimated at the date of grant with the following weighted-average assumptions for the fiscal years ended March 31, 2008:

	2008
Risk Free Interest Rate		1.79%
Expected Life	3.0 years
Expected Volatility		116%
Expected Dividend Yield		0%

The per share weighted average fair value of stock options granted for the fiscal year ended March 31, 2008 was $0.11.

Note 14 – Earnings (Loss) Per Share

Basic income (loss) per common share is computed by dividing the results of operations by the weighted average number of shares outstanding during the period. For purposes of the determining the number of shares outstanding the shares received by the acquirer in the reverse acquisition are treated as outstanding for all periods prior to the transaction.

Diluted income (loss) earnings per common share adjusts basic income (loss) per common share for the effects of convertible securities, stock options, warrants and other potentially dilutive financial instruments only in periods in which such effect is dilutive. No instruments were dilutive at June 30, 2009 or 2008.

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Note 15 – Subsequent Events

On August 1, 2009, the Company received notice of default from Shelter Island Opportunity Fund, LLC that due to the failure to make timely payments under the note that it was accelerating the note and making demand for payment and has filed such documents with the New York Supreme Court seeking judgment. The Company is preparing a response to the litigation and is in discussion with the lender in attempts to resolve the past due amounts.

Management performed an evaluation of Company activity through August 14, 2009, the date the unaudited condensed consolidated financial statements were issued.  The Company concluded that there are no other significant subsequent events requiring disclosure.

Note 16 – Segment Reporting

Green Planet Group, Inc. has two reportable segments: the engine, fuel additives and green energy products and the industrial staffing segments.  The first segment is comprised of the XenTx Lubricants, EMTA Corp. and White Sands entities and the staffing segment is comprised of Lumea, Inc. and its operating subsidiaries. Prior to March 1, 2009 Green Planet Group, Inc. only had the first reporting segment of business.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  Interest expense related to the individual entities is paid by or charged to those entities and the related debt is included as that entity’s liability. Green Planet management evaluates performance based on profit or loss before income taxes not including nonrecurring gains and losses.

There have been no significant intersegment sales or costs.

Green Planet’s business is conducted through separate legal entities that are wholly owned subsidiaries.  Each entity has a specific set of business objectives and line of business.

The Company analyzes the result of the operations of the individual entities and the segments. Green Planet does not allocate income taxes and unusual items to the segments. The segment information for the three months ended June 30, 2009 is presented below.

	Additives &						Corporate
	Green Energy			Staffing			& Eliminations			Consolidated
Income statement information:
Sales	$	584,233		$	16,113,671		$	–		$	16,697,904
Depreciation and amortization		67,050			172,677			–			239,717
Interest expense		174,735			434,091			818,408			1,427,234
Loss before income taxes		(353,260	)		(1,638,513	)		(1,691,991	)		(3,683,764	)
Net loss		(353,260	)		(1,638,513	)		(1,691,991	)		(3,683,764	)
Balance sheet information:
Total assets		4,374,163			16,005,917			3,131,076			23,511,156

25

Note 17 – Restatement of Prior Financial Statements

On July 31, 2009, the board of directors (the “Board”) of Green Planet Group, Inc. (the “Company”) concluded that the Company’s previously filed consolidated financial statements for the fiscal year ends March 31, 2007, 2008 and 2009 on Form 10-K and the quarterly statements from September 30, 2006 (the first required filing date) through December 31, 2008 on Form 10-Q should no longer be relied upon.  The Board with the recommendation of management came to this conclusion based on comments received the Accounting Staff of the Division of Corporate Finance of the Securities and Exchange Commission (the “SEC”) in its review of the Company’s financial statements for the year ended March 31, 2008 and interim filings through December 31, 2008.  After discussion, review and analysis of our accounting and disclosures, the Company identified the following issues:

1) The Company treated the convertible debt and related warrants under EITF 00-27 under which such converted or exercised instruments are recognized as equity and under the EITF 00-19, and owing to the unlimited nature of the potential issuances, the instruments are to be treated as liabilities or assets and revalued each reporting period.

2) Under Statement of Financial Accounting Standards No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities,” and Emerging Issues Task Force Staff Position EITF 00-19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own,” which state in part that convertible instruments should be valued at their fair value at date of issuance and derivatives, such as warrants, should be valued at their fair value at issuance and each subsequent reporting date.

3) Accordingly, the Company will restate the financial statements referred to above. In summary, in conjunction with the aggregate face amount of the convertible loans of $3,000,000 with net proceeds of $2,512,500, the Company estimates that at the closing of the various convertible loans in the year ended March 31, 2007 the Company will book an additional $3,000,000 of loan balance representing the 50% conversion feature of the instruments to common stock of the Company and a derivative liability of $39,207,874 for the then fair value of the warrants issued and outstanding. At the end of the reporting period credits of $13,960,334 to adjust for the “default warrants” issued and valued under EITF 00-27 in error and a valuation allowance of $38,685,527 to adjust to the yearend valuation resulting in a net decrease of $10,437,986 in the net loss for March 31, 2007.  At March 31, 2008, the year end valuation resulted in additional interest expense of $1,272,447 and a increase in the net loss for the period of a like amount and at March 31, 2009 the Company has a reduction of interest expense by $1,151,045 and a decrease in the net loss for the period of the same amount. For the three months ended June 30, 2008 the Company is reporting as additional interest expense of $1,070,548 and a change in the net income for the period from $167,517 to a loss of $903,031. The results of these changes are reflected in the following balance sheets and statements of operations for the year ended March 31, 2009 and the three months ended June 30, 2008:

26

Consolidated Balance Sheets
	March 31, 2009
	As Originally							After
ASSETS	Reported			Adjustments				Restatement
Current Assets:
Cash	$	470,288		$	–			$	470,288
Accounts receivable		4,349,866			–				4,349,866
Inventory		369,403			–				369,403
Prepaid expenses		1,495,461			158,970		A		1,654,431
Total Current Assets		6,685,018			158,970				6,843,988
Plant and equipment, net of accumulated depreciation		1,900,834			–				1,900,834
Other Assets:
Other assets		189,164			106,208		A		295,372
Intangible assets		3,745,025			–				3,745,025
Goodwill		8,979,822			–				8,979,822
Total Other Assets		12,914,011			106,208				13,020,219
Total Assets	$	21,499,863		$	265,178			$	21,765,041
LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)
Current Liabilities:
Accounts payable	$	1,210,127		$	–			$	1,210,127
Accounts payable - affiliates		165,565			–				165,565
Accrued liabilities		4,765,026			–				4,765,026
Cashless warrant liability		57,876			–				57,876
Notes payable and amounts due within one year		6,429,994			106,208		A		6,536,202
Derivative liability					643,750		B		643,750
Convertible notes payable		2,474,287			2,579,813		C		5,054,100
Total Current Liabilities		15,102,875			3,329,771				18,432,646
Notes payable due after one year		8,955,442			106,208		A		9,061,650
Total Liabilities		24,058,317			3,435,979				27,494,296
Stockholders' Equity
Preferred Stock, $0.001 par value, 1,000,000 Authorized; no shares issued and outstanding		–			–				–
Common Stock, $0.001 par value, 250,000,000 authorized, issued and outstanding 117,440,103 at March 31, 2009		117,441			–				117,441
Additional paid-in capital		28,201,532			(13,487,384	)	D		14,714,148
Accumulated deficit		(30,877,427	)		10,316,583		E		(20,560,844	)
Total Stockholders' Equity/Deficit		(2,558,454	)		(3,170,801	)			(5,729,255	)
Total Liabilities and Stockholders' Equity	$	21,499,863		$	265,178			$	21,765,041

(Continued)

27

Consolidated Statements of Operations
	For the Year Ended March 31, 2009
	As Originally						After
	Reported			Adjustments			Restatement
Revenue:
Sales, net of returns and allowances	$	9,170,794		$	–		$	9,170,794
Cost of sales		7,030,015			–			7,030,015
Gross Profit		2,140,779			–			2,140,779
Operating Expenses:
Selling, general and administrative		3,798,290			–			3,798,290
Depreciation and amortization		308,833			–			308,833
Allowance for bad debts		970,542			–			970,542
Total Operating Expenses		5,077,665			–			5,077,665
Loss From Operations		(2,936,886	)		–			(2,936,886	)
Other Income and (Expense):
Other income		416			–			416
Interest expense		(886,945	)		1,151,045	B		264,100
Loss before provision for income taxes		(3,823,415	)		1,151,045			(2,672,370	)
Provision for/(Benefit of) income taxes		–			–			–
Net Loss	$	(3,823,415	)	$	1,151,045		$	(2,672,370	)
Loss per share:
Basic and diluted earnings per share	$	(0.05	)	$	0.01		$	(0.04	)
Weighted average shares outstanding		73,612,313			73,612,313			73,612,313

(Continued)

28

Consolidated Balance Sheets
	June 30, 2008
	As originally							After
ASSETS	Reported			Adjustments				Restatement
	(Unaudited)			(Unaudited)				(Unaudited)
Current Assets:
Cash	$	25,082		$	–			$	25,082
Accounts receivable		2,007,651			–				2,007,651
Notes receivable		112,500			–				112,500
Inventory		592,732			–				592,732
Prepaid expenses		563,944			207,372		A		771,316
Total Current Assets		3,301,909			207,372				3,509,281
Plant and equipment, net of accumulated depreciation		1,763,029			–				1,763,029
Other Assets:
Other assets		324,768			224,996		A		549,764
Intangible assets		601,931			–				601,931
Total Other Assets		926,699			224,996				1,151,695
Total Assets	$	5,991,637		$	432,368			$	6,424,004
LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)
Current Liabilities:
Accounts payable	$	670,094		$	–			$	670,094
Accrued liabilities		1,482,047			–				1,482,047
Cashless warrant liability		295,194			–				295,194
Notes payable and amounts due within one year		1,774,930			155,967		A		1,930,897
Derivative liability		315,514			2,549,829		B		2,865,343
Total Current Liabilities		4,537,779			2,549,829				7,243,574
Notes payable due after one year		929,446			143,344		A		1,072,790
Convertible notes payable		2,078,481			2,975,619		C		5,054,100
Total Liabilities		7,545,706			5,668,792				13,370,464
Stockholders' Equity
Preferred Stock, $0.001 par value, 1,000,000 Authorized; no shares issued and outstanding		–			–				–
Common Stock, $0.001 par value, 250,000,000 authorized, issued and outstanding 64,791,103 at June 30, 2008		64,791			–				64,791
Additional paid-in capital		25,267,635			(13,487,384	)	D		11,780,251
Accumulated deficit		(26,886,495	)		8,094,993		E		(18,791,502	)
Total Stockholders' Equity/Deficit		(1,554,069	)		(5,392,391	)			(6,946,460	)
Total Liabilities and Stockholders' Equity	$	5,991,637		$	276,401			$	6,424,004

(Continued)

29

Consolidated Statements of Operations
	For the Three Months Ended June 30, 2008
	As originally							After
	Reported			Adjustments				Restatement
	(Unaudited)			(Unaudited)				(Unaudited)
Revenue:
Sales, net of returns and allowances	$	1,836,421		$	–			$	1,836,421
Cost of sales		726,776			–				726,776
Gross Profit		1,109,645			–				1,109,645
Operating Expenses:
Selling, general and administrative		681,703			–				681,703
Depreciation and amortization		61,966			–				61,966
Total Operating Expenses		743,669			–				743,669
Loss From Operations		365,976			–				365,976
Other Income and (Expense):
Other income		375			–				375
Interest expense		(198,834	)		(1,070,548	)	B		(1,269,382	)
Income/(Loss) before provision for income taxes		167,517			(1,070,548	)			(903,031	)
Provision for/(Benefit of) income taxes		–			–				–
Net Income/(Loss)	$	167,517		$	(1,070,548	)		$	(903,031	)
Earning per share:
Basic and diluted earnings per share	$	0.00		$	(0.01	)		$	(0.01	)
Weighted average shares outstanding		61,913,414			61,913,414				61,913,414

____________

A – Adjustment to reclassify unamortized loan fees and costs to prepaids and other assets

B – Adjustment to reflect change in derivative value for the period

C – Cumulative effect to reflect loan conversion feature net of conversions in prior periods

D – Cumulative effect of error in reporting cure cost of default and effect of conversions

E – Cumulative effect of prior period adjustments and current period adjustment to accumulated deficit

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

Forward-Looking Statements 

The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995 and within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements involve various risks and uncertainties. Forward-looking statements contained in this Report include statements regarding the plans of Green Planet Group, Inc. (“Green Planet, “GPG,” “we,” “our,” or “the Company”) to develop, test and deliver new products; market risks, opportunities and acceptance; industry growth; anticipated capital expenditures; the impact of option expensing; our ability to finance operations, refinance current maturities of long-term obligations; and our ability to meet our cash requirements while maintaining proper liquidity. These statements involve risks and uncertainties and are based on management’s current expectations and estimates; actual results may differ materially. Those risks and uncertainties that could impact these statements include the risks relating to implementation and success of our advertising and marketing plans and sensitivity to general economic conditions, including the current economic environment, consumer spending patterns; our ability to complete long-term financing, our leverage and debt risks; the effect of competition on GPG and our clients; management’s allocation of capital and the timing of capital purchases; and internal factors such as the ability to increase efficiencies, control expenses and successfully execute growth strategies. The effect of market risks could be impacted by future borrowing levels and economic factors such as interest rates. The expected impact of option/warrant expensing is based on certain assumptions regarding the number and fair value of options granted, resulting tax benefits and shares outstanding. The actual ultimate impact of option/warrant expensing could vary significantly to the extent actual results vary significantly from current assumptions and market conditions.

 Such forward-looking statements encompass our beliefs, expectations, hopes or intentions regarding future events. Words such as “expects,” “believes,” “anticipates,” “should,” and “likely” also identify forward-looking statements. All forward-looking statements included in this Report are made as of the date hereof, based on information available to us as of such date, and we assume no obligation to update any forward-looking statement. It is important to note that such statements may not prove to be accurate and that our actual results and future events could differ materially from those anticipated in such statements. Among the factors that could cause actual results to differ materially from our expectations are those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations---Risks Related to Existing and Proposed Operations.” All subsequent written and oral forward-looking statements attributable to GPG or persons acting on our behalf are expressly qualified in their entirety by this section and other factors included elsewhere in this Report. For a more detailed discussion of these and other factors that could cause actual results to differ from those contained in the forward-looking statements, see the company’s annual report on Form 10-K filed with the Securities and Exchange Commission which includes our financial statements for the year ended March 31, 2009. As previously reported, the Company will be restating its financial statements on Form 10-K for the year ended March 31, 2009 and prior years as soon as practicable.

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Green Planet Group, Inc., our operations and our business environment. MD&A is provided as a supplement to (and should be read in conjunction with) our Financial Statements and accompanying notes

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RESULTS OF OPERATIONS

 The following table sets forth our results of operations for the three months ended June 30, 2009 and 2008 as a percentage of net sales:

	2009		2008
NET SALES	100.0	%	100.0	%
COST OF SALES	88.2	%	39.6	%
GROSS PROFIT	11.8	%	60.4	%
OPERATING EXPENSES
Selling, general and administrative	21.4	%	37.1	%
Depreciation and amortization	1.4	%	3.4	%
Allowance for bad debts	2.5	%	0.0	%
TOTAL OPERATING EXPENSES	25.4	%	40.5	%

INCOME/(LOSS) FROM OPERATIONS	(13.5)	%	19.9	%
Other income (expense)	0.0	%	0.0	%
Interest expense	(8.5)	%	(69.1)	%
LOSS BEFORE INCOME TAXES	(22.1)	%	(49.2)	%
Income tax benefit	0.0	%	0.0	%
NET LOSS	(22.1)	%	(49.2)	%

Three months ended June 30, 2009 as compared to three months ended June 30, 2008

Net Sales: Net Sales increased from $1,836,421 in 2008 to $16,697,904 in 2009 or an increase of $14,861,483. This represents an increase of 809% over the same period a year earlier. This increase was due to the addition of the staffing business segment that added $16,113,671 and a decrease in the chemical additive volume of $1,252,188 primarily as a result of not having the foreign sales of $1,526,907 reported in the prior period.

Gross Margin: Gross Margin decreased to 11.8% from 60.4% or a decrease of 80.4%. This was due to the lower gross margins from the staffing segment and increased petroleum based product costs used by our product mix.

32

Selling, General and Administrative Expenses: The Company increased its SG &A from $681,703 to $3,580,636 or an increase of $2,898,933, reflecting a decrease in the percentage of SG&A relative to sales 15.7%. This was due to the increase in operating costs of the staffing segment that was not present in the prior period and increased consulting costs and sales and promotional expenses.

Depreciation and Amortization: The increase in the depreciation and amortization was due to the addition of the staffing segment which accounted for all of the increase.

Allowance for Bad Debts:  The allowance for bad debts was attributable to the staffing segment and the filing of bankruptcy by two of its clients the collection of their outstanding amounts is uncertain.

IMPACT OF INFLATION

Inflation has not had a material effect on our results of operations.  We expect the cost of petroleum base products to track the increase and decrease in the worldwide oil prices.

SEASONALITY

The seasons of the year have no material impact on the Company’s fuel efficiency/emission reducing products or services but it does have an impact on both revenues and margin of our staffing companies. Revenues are lowest in the first calendar quarter and largest in the third calendar quarter.

 FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

We have experienced net losses for the three months ended June 30, 2009 and 2008 and positive cash flow from operations of $931,768 for the period ended June 30, 2009 and negative cash flows from operations of $965,251 for the period ended June 30, 3008. The aggregate net losses for the last two fiscal years aggregated $2,672,370 (restated) and $3,722,531 (restated), respectively. For the three months ended June 30, 2009 the net loss was $3,683,764 with aggregate contributing non-cash factors of depreciation, amortization, bad debts, share based payments and derivation valuation factors of $1,691,137 for the quarter compared to the prior year quarter of $1,384,733. We have funded our operations to date by borrowings from third parties and investors, a substantial portion of which are convertible into our common stock. In the June 30, 2009 we sold stock for an aggregate of $120,000 and issued $167,200 of common stock to services. The inability of the Company to raise capital through the private sale of common stock or through the issuance of debt instruments at acceptable prices and in a timely manner will have a negative impact on the results of operations and viability of the Company.

At June 30, 2009, the Company does not have any significant commitments for capital expenditures.  The Company is discussing with potential customers the manufacturing and delivery logistics and depending on the results of such negotiations, the Company may be required to expand its manufacturing capabilities.  We have no special purpose entities or off balance sheet financing arrangements, commitments, or guarantees other than certain long-term operating lease arrangements for our corporate facilities and short-term purchase order commitments to our suppliers.

At June 30, 2009, the Company aggregate of accounts payable, accrued liabilities and notes due within one year has increased by $16,935,254 from $4,083,038.  These obligations together with operation costs will have to be funded from operations and additional funding from debt and equity offerings.

33

The Company’s cost of raw materials is highly dependent on the cost of petroleum products and synthetic materials and the staffing segment is dependent on the cost of labor in various geographic areas within the United States.  To the extent that such prices fluctuate significantly the Company may be unable to adjust sales prices to reflect cost increased and secondarily price increases may negatively influence sales.

OFF BALANCE SHEET ARRANGEMENTS

Not applicable.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation – The consolidated financial statements include the accounts of Green Planet Group, Inc. and its consolidated subsidiaries and wholly-owned limited liability company. All significant intercompany transactions and profits have been eliminated.

Use of Estimates – The preparation of financial statements in conformity with United States generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The more significant estimates relate to revenue recognition, contractual allowances and uncollectible accounts, intangible assets, accrued liabilities, derivative liabilities, income taxes, litigation and contingencies. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates.

Cash Equivalents – The Company invests its excess cash in short-term investments with various banks and financial institutions. Short-term investments are cash equivalents, as they are part of the cash management activities of the Company and are comprised of investments having maturities of three months or less when purchased.

Allowance for Doubtful Accounts – The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. The allowance for doubtful accounts was $1,220,916 and $806,846 at June 30, 2009 and March 31, 2009, respectively.

Inventories – Inventories are stated at the lower of cost or market value. Cost of inventories is determined by the first-in, first-out (FIFO) method. Obsolete or abandoned inventories are charged to operations in the period that it is determined that the items are not longer viable sales products.

Property, Plant and Equipment – Property, plant and equipment are carried at cost. Repair and maintenance costs are charged against operations while renewals and betterments are capitalized as additions to the related assets. The Company depreciates it assets on a straight line basis. Estimated useful lives range for the equipment ranges from 3 to 10 years and the buildings are being depreciated over 31 years.

34

Intangible Assets – Intangible assets consist of patents, trademarks, intellectual property and government approval. For financial statement purposes, identifiable intangible assets with a defined life are being amortized using the straight-line method over the estimated useful lives of the assets. Costs incurred in connection with patent, trademark applications and approvals from governmental agencies such as the Environmental Protection Agency, including legal fees, patent and trademark fees and specific testing costs, are capitalized and amortized over an estimated economic life of the asset, generally seven years, commencing upon the grant or approval date. Costs subsequent to grant date are expensed as incurred.

Impairment of Long-Lived Assets – In accordance with the Statement of Financial Accounting Standards No. 144 (“FAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the sum of the expected future cash flows of an asset is less than its carrying value, an impairment measurement is required. Impairment charges are recorded to the extent that an asset’s carrying value exceeds fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented.

Fair Value Disclosures – The carrying values of cash, accounts receivable, deposits, prepaid expenses, accounts payable and accrued expenses generally approximate the respective fair values of these instruments due to their current nature.

The fair values of debt instruments for disclosure purposes only are estimated based upon the present value of the estimated cash flows at interest rates applicable to similar instruments.

The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features that are indexed to the Company’s common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within the control of the Company. In such instances, net-cash settlement is assumed for financial accounting and reporting, even when the terms of the underlying contracts do not provide for net-cash settlement. Such financial instruments are initially recorded at fair value and subsequently adjusted to fair value at the close of each reporting period.

Revenue Recognition – Revenues are recognized at the time of shipment of products to customers, or at the time of transfer of title, if later, and when collection is reasonably assured. All amounts in a sales transaction billed to a customer related to shipping and handling are reported as revenues.  Staffing revenue is recognized at the completion of each billing cycle to the customer after completion of the work.  The billing cycle is generally weekly.

Provisions for sales discounts and rebates to customers are recorded, based upon the terms of sales contracts, in the same period the related sales are recorded, as a deduction to the sale. Sales discounts and rebates are offered to certain customers to promote customer loyalty and encourage greater product sales.  As a general rule, the Company does not charge interest on its accounts receivables.

Income Taxes – We provide for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” SFAS No. 109 requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of the assets and liabilities.

35

The recording of a net deferred tax asset assumes the realization of such asset in the future; otherwise a valuation allowance must be recorded to reduce this asset to its net realizable value. The Company considers future pretax income and, if necessary, ongoing prudent and feasible tax planning strategies in assessing the need for such a valuation allowance. In the event that the Company determines that it may not be able to realize all or part of the net deferred tax asset in the future, a valuation allowance for the deferred tax asset is charged against income in the period such determination is made. The Company has recorded full valuation allowances as of June 30, 2009 and 2008.

Stock-Based Compensation

We account for stock-based awards to employees and non-employees using the accounting provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123 — Accounting for Stock-Based Compensation, which provides for the use of the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Shares of common issued in connection with acquisitions are also recorded at their estimated fair values. The fair value of equity securities is determined by management based upon recent private stock sales to third parties.

In December 2004, the FASB revised its SFAS No. 123 (“SFAS No. 123R”). The revision establishes standards for the accounting of transactions in which an entity exchanges its equity instruments for goods or services, particularly transactions in which an entity obtains employee services in share-based payment transactions. The revised statement requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which the employee is required to provide service in exchange for the award. The provisions of the revised statement are effective for financial statements issued for the first interim or annual reporting period beginning after June 15, 2005, with early adoption encouraged.

Concentrations of Credit Risks – Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Although the amount of credit exposure to any one institution may exceed federally insured amounts, the Company limits its cash investments to high-quality financial institutions in order to minimize its credit risk. The Company extends credit based on an evaluation of the customer's financial condition, generally without requiring collateral. Exposure to losses on receivables is dependent on each customer's financial condition. At June 30, 2008 the Company had a receivable from one foreign customer in the amount of $1,317,809.  The balance of the accounts receivable are primarily from retailers and distributors located in the United States.

Recent Accounting Pronouncements

Fair Value Measurement

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”), as amended in February 2008 by FSP FAS 157-2, Effective Date of FASB Statement No. 157. The provisions of SFAS 157 were effective for the Company as of April 1, 2008. However, FSP FAS 157-2 deferred the effective date for all nonfinancial assets and liabilities, except those recognized or disclosed at fair value on an annual or more frequent basis, until April 1, 2009. SFAS 157 defines fair value, creates a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. The adoption did not have a material impact on the Company’s consolidated financial statements for the current period.

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Fair Value of a Financial Asset When the Market is Not Active

In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active (FSP FAS 157-3), which clarifies the application of SFAS 157 in a market that is not active. Additional guidance is provided regarding how the reporting entity’s own assumptions should be considered when relevant observable inputs do not exist, how available observable inputs in a market that is not active should be considered when measuring fair value, and how the use of market quotes should be considered when assessing the relevance of inputs available to measure fair value. FSP FAS 157-3 became effective immediately upon issuance. Its adoption did not have a material impact on the Company’s consolidated financial statements in 2009.

Fair Value When the Volume and Level of Activity Significantly Decreased

In April 2009 the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4), which clarifies the application of SFAS 157 when there is no active market or where the price inputs being used represent distressed sales. Additional guidance is provided regarding estimating the fair value of an asset or liability (financial and nonfinancial) when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. The Company adopted FSP FAS 157-4 as of June 30, 2009, which was the required effective date. Its adoption did not have a material impact on the Company’s consolidated financial statements at June 30, 2009.

Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock 

In June 2008, the FASB ratified EITF 07-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock   (EITF 07-5). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The adoption of this pronouncement effective January 1, 2009, required the Company to perform additional analyses on both its freestanding equity derivatives and embedded equity derivative features. The adoption of EITF 07-05 did not have a material effect on the Company’s consolidated financial statements at June 30, 2009.

Fair Value Option

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115 (“SFAS 159”), which permits all entities to choose to measure eligible items at fair value on specified election dates. The associated unrealized gains and losses on the items for which the fair value option has been elected shall be reported in earnings. SFAS 159 became effective for the Company as of April 1, 2008; however, the Company has not elected to utilize the fair value option on any of its financial assets or liabilities under the scope of SFAS 159.

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Non-controlling Interests

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 requires a company to clearly identify and present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of operations; changes in ownership interest be accounted for similarly, as equity transactions; and when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary be measured at fair value. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, and earlier application is prohibited. SFAS 160 is not applicable as the Company does not have any non--controlling interests.

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). The objective of SFAS 141(R) is to improve the information provided in financial reports about a business combination and its effects. SFAS 141(R) states that all business combinations (whether full, partial or step acquisitions) must apply the “acquisition method.” In applying the acquisition method, the acquirer must determine the fair value of the acquired business as of the acquisition date and recognize the fair value of the acquired assets and liabilities assumed. As a result, it will require that certain forms of contingent consideration and certain acquired contingencies be recorded at fair value at the acquisition date. SFAS 141(R) also states acquisition costs will generally be expensed as incurred and restructuring costs will be expensed in periods after the acquisition date. This statement is effective for business combination transactions for which the acquisition date is on or after April 1, 2009, and earlier application is prohibited. The Company will adopt this statement on April 1, 2009. The impact of the adoption of SFAS 141(R) on the Company’s financial statements will largely be dependent on the size and nature of the business combinations completed after the adoption of this statement. While SFAS 141(R) generally applies only to transactions that close after its effective date, the amendments to SFAS 109 and FIN 48 are applied prospectively as of the adoption date and will apply to business combinations with acquisition dates before the effective date of SFAS 141(R). The Company estimates that the affect on the recorded valuation allowance and unrecognized tax benefits, which are associated with prior acquisitions will not have a material effect on the results of operations or statement of position in future periods, if recognized in future periods.

Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133 (“SFAS 161”) . This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted SFAS 161 on April 1, 2009, the beginning of the Company’s first fiscal 2010 quarter.

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GAAP Hierarchy

In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 will become effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." Green Planet does not expect the adoption of SFAS No. 162 to have a material effect on its results of operations and financial position.

Convertible Debt

In May 2008, the FASB issued Financial Statement Position (FSP) Accounting Principles Board (APB) 14-1 "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)." FSP APB 14-1 requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years beginning after December 15, 2008 on a retroactive basis and has been adopted by the Company in the first quarter of fiscal 2010.

Useful Life of Intangible Assets

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets. The FSP states that in developing assumptions about renewal or extension options used to determine the useful life of an intangible asset, an entity needs to consider its own historical experience adjusted for entity-specific factors. In the absence of that experience, an entity shall consider the assumptions that market participants would use about renewal or extension options. This FSP is to be applied to intangible assets acquired after January 1, 2009. The adoption of this FSP did not have an impact on the Company’s financial statements.

Interim Disclosures about Fair Value of Financial Instruments

In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments . The FSP amends SFAS No. 107 “Disclosures about Fair Value of Financial Instruments” to require an entity to provide disclosures about fair value of financial instruments in interim financial information. This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The adoption of this FSP did not have an impact on the Company’s financial statements.

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Contingencies in Business Combinations

In April 2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies . This FSP requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. If fair value cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with SFAS No. 5, “Accounting for Contingencies” and FASB Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss”. Further, the FASB removed the subsequent accounting guidance for assets and liabilities arising from contingencies from SFAS No. 141(R). The requirements of this FSP carry forward without significant revision the guidance on contingencies of SFAS No. 141, “Business Combinations”, which was superseded by SFAS No. 141(R) (see previous paragraph). The FSP also eliminates the requirement to disclose an estimate of the range of possible outcomes of recognized contingencies at the acquisition date. For unrecognized contingencies, the FASB requires that entities include only the disclosures required by SFAS No. 5. This FSP was adopted effective January 1, 2009. There was no impact upon adoption, and its effects on future periods will depend on the nature and significance of business combinations subject to this statement.

Other Than Temporary Impairments

In April 2009, the FASB issued FASB Staff Position (FSP) No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. FSP No. FAS 115-2 and FAS 124-2 improves the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The effective date for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted.  The adoption of this FSP did not have an impact on the Company’s financial statements.

Subsequent Events

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” which requires entities to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. The statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009, and shall be applied prospectively. The adoption of SFAS No. 165 did not have a material impact on the Company’s consolidated financial statements.

Transfers of Financial Assets

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets,” which is an amendment of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. This statement will improve the relevance, representation faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets. It will also take into account the effects of a transfer on its financial position, financial performance, and cash flows, and a transferor’s continuing involvement. SFAS No. 166 is effective for annual periods beginning after November 15, 2009.  This statement is effective for the Company beginning January 1, 2010 and has had no material impact on the financial statements.

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Amendments to FASB interpretation No. 46(R)

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB interpretation No. 46(R),” establishes how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated. This statement improves financial reporting by enterprises involved with variable interest entities, which addresses the effects on certain provisions of FASB interpretation No. 46, “Consolidation of Variable Interest Entities,” as a result of the elimination of the qualifying special-purpose entity concept in FASB No. 166, “Accounting for Transfers of Financial Assets,” and constituent concerns about the application of certain key provisions of Interpretation 46(R). SFAS No. 167 is effective after November 15, 2009. This statement is effective for the Company beginning January 1, 2010 and is expected to have no material impact on the financial statements.

Codification and the Hierarchy of Generally Accepted Accounting Principles

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” Replaces SFAS No. 162, establishes the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. On the effective date for financial statements issued for interim and annual periods ending after September 15, 2009, the Codification will supersede all then–existing non-SEC accounting and reporting standards. The Company has determined that the adoption of SFAS No. 168 will not have an impact on the financial statements.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.   Controls and Procedures

(a)  Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term "disclosure controls and procedures" to mean a company's controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Our chief executive officer and our chief financial officer have concluded, based on the evaluation of the effectiveness of our disclosure controls and procedures by our management, with the participation of our chief executive officer and our chief financial officer, as of the end of the period covered by this report, that our disclosure controls and procedures were effective for this purpose.

(b)  Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting for the three months ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, during second quarter, we implemented a new accounting system which allows us to develop better internal controls around issuing purchase orders, processing accounts payable, accounts receivable, inventory, manufacturing and reporting.

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PART II – OTHER INFORMATION

Item 1.   Legal Proceedings

Except as described in Item 3 below, there were no material pending legal proceedings at June 30, 2009 to which the Company or its subsidiaries is a party other than ordinary routine litigation incidental to their respective businesses.

Item 1A.   Risk Factors

Not applicable.

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

During the period from April 1, 2009 through June 30, 2009, the Registrant sold and issued an aggregate of 4,380,000 shares of common stock, with par value of $0.001, for an net purchase price of $120,000.  The sales were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder, in as much as the securities were issued only to accredited investors without any form of general solicitation or general advertising.

Except as otherwise disclosed herein, there were no underwriting discounts or other commissions paid in conjunction with the sales.

Item 3.   Defaults Upon Senior Securities

On August 6, 2009, the Company received a lawsuit filed in the Supreme Court of the State of New York, County of New York, Index No. 602313/09 by Shelter Island Opportunity Fund, LLP claiming default for non-payment under the Note and payment of $1,746,961 principal and interest or assignment of collateral pledged under the various loan documents.  The Company will respond to this litigation through its legal counsel while attempting to resolve this matter with the lender.  If unsuccessful, the result could be the foreclosure on the Company's operating facility in Durant, Oklahoma.

Item 4.   Submission of Matters to a Vote of Security Holders

None.   

Item 5.   Other Information

None.

Item 6.   Exhibits

Exhibit No.	Description
31.1	Certification of  Chief Executive Officer pursuant to Rule 13a-14(a)
31.2	Certification of  Chief Financial Officer pursuant to Rule 13a-14(a)
32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

Pursuant to the requirements 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.

	GREEN PLANET GROUP, INC. (Registrant)
Date: August 19, 2009	/s/ Edmond L. Lonergan
	Edmond L. Lonergan President and Chief Executive Officer

Date: August 19, 2009	/s/ James C. Marshall
	James C. Marshall Chief Financial Officer

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