See notes to consolidated financial statements.
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GENERATION ZERO GROUP, INC.
(FORMERLY VELOCITY OIL & GAS, INC.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business. Generation Zero Group, Inc. (“Generation Zero” or the “Company”) was incorporated in the State of Nevada on May 16, 2006. Since inception, the Company has operated as a start-up entity pursuing opportunities in oil and gas exploration and development with a geographic focus in Texas and Louisiana.
With the acquisition of Find.com, the Company has made a concerted effort to focus on growing Find.com into a profitable business and other new opportunities and businesses that will attempt to increase the value of the Company’s common stock.
Basis of Presentation. The consolidated financial statements of Generation Zero have been prepared by Generation Zero and have been audited, pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles.
Use of Estimates. In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and expenses in the statement of expenses. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on its results of operations, financial condition or cash flow.
NOTE 2 – GOING CONCERN
As shown in the accompanying financial statements, Generation Zero incurred a net loss of ($118,398), for the quarter ended March 31, 2013, and had an accumulated deficit of ($6,842,357) as of March 31, 2013. These conditions raise substantial doubt as to Generation Zero’s ability to continue as a going concern. The Company is trying to raise additional capital. The financial statements do not include any adjustments that might be necessary if Generation Zero is unable to continue as a going concern.
NOTE 3 - INTANGIBLE ASSETS
The intangible assets all relate to the URLwww.Find.com and the related underlying technology driving the website at the time of acquisition. These intangibles are deemed to be amortized over a fifteen year period.
www.Find.com Technology
During April 2010, Generation Zero entered into an Asset Purchase Agreement with Find.com Acquisition, Inc. to acquire all of Find.com Acquisition’s interest in and ownership of the technology assets that powered the operations of thewww.Find.com website and all associated intellectual property rights necessary to enable Generation Zero to register the technology and intellectual property in Generation Zero’s name. The purchase also included all service contracts related to the operations of the technology that at the time of acquisition related to the operation of www.Find.com, and other related domain names. The purchase did not include any liabilities of Find.com Acquisition or the Find.com URL. The asset was valued at $1,300,000 based upon a fair market valuation report prepared by a third party valuation specialist. The Company issued 10,000,000 shares of restricted common stock as purchase consideration.
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Since the acquisition of the technology assets, the Company has been pursuing an alternative strategy for the Find.com URL. This strategy will use only certain aspects of the acquired technology assets going forward. Generation Zero intends to utilize the full functionality of the technology assets on future initiatives unrelated to Find.com, and accordingly has recorded an impairment charge of ($1,100,000) based on the current status of Find.com and the fact that the timing of the future initiatives is unknown and uncertain. The technology assets, after the impairment charge, are valued at $200,000.
www.Find.com URL (“URL”)
On June 30, 2010 Generation Zero entered into a Share Exchange Agreement with various members of Find.com URL Holding LLC, a Georgia limited liability company. Find.com URL Holding LLC owned 100% of the URL known aswww.find.com. The purchase consideration included 14,988,567 shares of restricted common stock and secured notes. The URL was valued at $4,000,000 based upon a fair market valuation report prepared by a third party valuation specialist. The Company allocated this value to the consideration issued based on the relative fair value of the debt assumed and equity issued related to this purchase. Fair value of the debt was based upon the face value of the instrument while the fair value of the common stock was based on the quoted market price of the stock on June 30, 2010. The secured notes were deeply discounted at the time of the transaction, with the discount amortized over the original term of the notes.
NOTE 4 – CONTESTED LEGAL CLAIMS
On February 12, 2013, Geronimo Property Trust (“Geronimo”) filed a lawsuit against the Company, MedicalWork and StaffMD in the Superior Court of Fulton County, Georgia (File No. 2013CV227180), alleging breach of contract by the Company and MedicalWork, due to the Company’s and MedicalWork’s alleged failure to repay a secured note entered into by MedicalWork (the “Geronimo Note”); unjust enrichment against MedicalWork and StaffMD; fraud against the Company due to alleged breaches of representations made by the Company; and seeking recovery of damages and attorneys’ fees. The suit also seeks to enjoin us from selling find.com. The suit claims that Geronimo never agreed to extend the due date of the Geronimo Note from February 1, 2012 to February 1, 2013. Geronimo also alleges that it sent the Company a default notice relating to the Geronimo Note on February 9, 2012, provided that the Company never received such notice. The Company subsequently filed an answer to the lawsuit, denying Geronimo’s claims, disputing substantially all of Geronimo’s allegations as untrue, and asserting counterclaims against Geronimo including tortious interference with business relations; conspiracy to commit tortious interference with business relations; defamation; conspiracy to commit defamation; breach of contract; fraud; conspiracy to commit fraud; and seeking attorney’s fees and expenses of litigation. At this very early stage of the litigation the outcome cannot be predicted with any degree of reasonable certainty however the Company intends to vigorously defend itself against Geronimo’s claims.
NOTE 5 – RELATED PARTY TRANSACTIONS
Generation Zero had borrowed from shareholders and Directors periodically in the past. The borrowings were non-interest bearing and due on demand with either ninety days or twelve months and one day’s notice. At March 31, 2013 and December 31, 2012, there was an outstanding balance of $30,168 and $30,168, respectively, due the shareholders and Directors.
NOTE 6 – THIRD PARTY TRANSACTIONS
The Company owed Scientigo, Inc. $155,000 as part of the Find.com URL transaction referenced in Note 3 above. In November 2010, a payment of $50,000 was made by the Company through an Escrow Agent. The remaining balance of $55,000 is in Default. Forbearance has been granted until January 1, 2014.
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On June 30, 2010 the Company issued secured notes to acquire the Find.com URL as referenced in Note 3 above, in the amount of $3,070,000 bearing interest at the rate of 12% and having a maturity date of December 31, 2011. The Company did not make the required payments under the secured Find.com notes to the holders thereof when due. The Collateral Agent for the Notes has declared the Notes in default. The Company originally negotiated a Forbearance Agreement with the Note Holders to affect forbearance for four months through March 15, 2011. That forbearance has been extended through January 1, 2014 per the amendment discussed below.
The Forbearance Agreement required that Matthew Krieg, the Company’s sole officer and Director and holder of the Company’s Series A Preferred Stock (which provides Mr. Krieg super-majority voting rights), enter into an agreement to cancel the shares of Series A Preferred Stock which he holds in exchange for an aggregate of 3,000,000 shares of common stock upon the payment in full of the Notes, among other things, which terms have since been amended by the March 2012 Forbearance Agreement, described in greater detail below.
Generation Zero Group, Inc. was not able to meet the terms of the Forbearance Agreement with the secured noteholders. In March 2012, the secured noteholders, with over majority approval, authorized the Collateral Agent to forbear in the exercise of its rights and remedies under the Secured Notes, Security Agreements, Operating Agreement, Forbearance Agreement and applicable law during a Forbearance Period commencing on June 30, 2010 and ending on the earlier to occur of January 2, 2014 or the date that any Forbearance Default occurs. The Secured Notes have been renegotiated to represent a face value of $2,920,250 and interest shall not accrue or be assessed during the Forbearance Period. As a forbearance fee, Generation Zero Group, Inc. agreed to issue 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Notes held by each holder, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing. The authorized amendment to the Forbearance Agreement also provides for the restructure of Generation Zero Group, Inc., the transfer of control from Mr. Krieg to the Collateral Agent and the replacement of current management. A Forbearance extension has been granted until January 1, 2014.
On November 4, 2010, a third party loaned the Company $150,000, which was evidenced by a promissory note in the amount of $250,000 bearing interest at the rate of 12% per annum with a maturity date of November 4, 2011. The amount of the note represented receipt of $150,000 cash and the assignment of $100,000 debt owed to the Company’s sole officer and Director. The Company issued 750,000 shares of restricted common stock in connection with this third party note. Forbearance has been extended on the note until June 2, 2014.
On November 4, 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, bearing interest at the rate of 12% per annum with a maturity date of November 4, 2011. The Company issued the third party an aggregate of 300,000 shares of common stock in connection with this third party note. Forbearance has been extended on the note until June 2, 2014.
In April 2012, several of the Secured Noteholders participated in a non-interest bearing bridge loan for $40,000. The Company agreed to issue 400,000 shares of restricted common stock in consideration of this funding, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing.
On August 15, 2012, a third party loaned the Company $200,000 for working capital which was evidenced by a Convertible Promissory Note, bearing interest at the rate of 10% per annum with a maturity date of August 15, 2014. The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.
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NOTE 7 – COMMON STOCK
As disclosed in Note 3, Generation Zero issued an aggregate of 24,988,567 shares of common stock to acquire the URLwww.find.com and related technology.
As disclosed in Note 6, Generation Zero issued an additional 1,050,000 shares of restricted common stock in conjunction with the issuance of Third Party Notes during November 2010.
As disclosed in Note 6, Generation Zero agreed to issue 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Secured Notes held by each holder, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing .
As disclosed in Note 6, Generation Zero agreed to issue the participating Note Holders 400,000 shares of restricted common stock, which shares have not been physically issued to date and are not included in the issued and outstanding shares disclosed throughout this filing.
NOTE 8 – PREFERRED STOCK
Series A Preferred Stock
Generation Zero has authorized 1,000 shares of Series A Preferred Stock which has a par value of $0.001 per share. Each share has no dividend rights, no liquidation preference, and no conversion or redemption rights. The shares of Series A Preferred Stock have the right, voting in aggregate, to vote on all shareholder matters equal to fifty-one percent (51%) of the total vote. As of March 31, 2013, there were 1,000 shares of Series A preferred stock issued and outstanding.
Series B Preferred Stock
Generation Zero has authorized 2,000,000 shares of Series B Preferred Stock which has a par value of $0.001 per share. Each share has no dividend rights, no liquidation preference, no voting rights, and no conversion or redemption rights. As of March 31, 2013, there were no shares of Series B preferred stock issued and outstanding.
NOTE 9 – SUBSEQUENT EVENTS
The Find.com website has been upgraded and redesigned by the Company. Thewww.find.com beta site was redeployed on May 1, 2013 with further functionality and offerings to be released over the next six months.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements". These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. References in this Form 10-Q, unless another date is stated, are to March 31, 2013.
You should read the matters described in “Risk Factors” below and disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on April 25, 2013, and the other cautionary statements made in this Report as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
Corporate History
Generation Zero Group, Inc. (“we,” the “Company,” and “us”) was formed as a Nevada corporation on May 16, 2006 under the name Velocity Oil & Gas, Inc. The Company originally operated as a start-up entity with the intention of being involved in oil and gas exploration and development with a geographic focus in Texas and Louisiana. We have since changed our business focus to Internet, technology and entertainment related businesses, and have closed on an acquisition of certain technologies and other proprietary information described below.
On or around November 10, 2009, Travel Engine Solutions, LLC (“Travel Engine”) subscribed for 1,000 shares of our Series A Preferred Stock (the “Series A Shares”, which include Super Majority Voting Rights (i.e., the right to vote 51% of the Company’s outstanding voting shares on any shareholder votes) for aggregate consideration of $175,000.
On or around January 21, 2010, Matthew Krieg, the sole Director of the Company, who is also the Manager and beneficial owner of Travel Engine, our majority shareholder as a result of the Series A Shares, which it held, which provided it the Super Majority Voting Rights, approved via a consent to action without meeting, the filing of a Certificate of Amendment to the Company’s Articles of Incorporation (the “Certificate”) to (a) authorize and approve a 1 for 100 reverse stock split (the “Stock Split”) of the Company’s authorized and outstanding common stock, effective as of the close of business on February 12, 2010, which Stock Split did not affect the authorized or outstanding shares of the Company’s preferred stock; (b) to change the Company’s name to “Generation Zero Group, Inc.” (the “Name Change”); (c) to reauthorize 100,000,000 shares of $0.001 par value per share common stock following the Stock Split; (d) to re-authorize 10,000,000 shares of “blank check” preferred stock, $0.001 par value per share following the Stock Split (collectively with (c) the “Authorized Share Transactions”); and (e) to provide that the Company elects, pursuant to Section 78.434 of the Nevada Revised Statutes (the “NRS”), to not be governed by Sections 78.411 to 78.444 of the NRS, inclusive and Sections 78.378 to 78.3793, inclusive, of the NRS (the “Elections”).
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The Certificate, the Stock Split, the Name Change, the Authorized Share Transactions and the Elections were effective with the Secretary of State of Nevada on February 12, 2010, and were effective with the Financial Industry Regulatory Authority (“FINRA”) on March 8, 2010.
Unless otherwise noted, the effect of the Stock Split and Name Change has been retroactively reflected throughout this report.
Find.com Technology Acquisition
On or around April 28, 2010, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Find.com Acquisition, Inc., a Delaware corporation (“Find.com Acquisition”). Pursuant to the Purchase Agreement, we purchased all of Find.com Acquisition’s interest in and ownership of the assets associated with the technology and operations of the www.Find.com website and all intellectual property rights associated therewith, including technical documentation, source code, and files (collectively the “Technology Assets”). As described below, we also subsequently purchased 100% of the ownership interests in URL Holdings, which owns the URL, Find.com. The Technology Assets also include all service contracts related to the operations of the technology and certain unrelated domain names. The purchase did not include any liabilities of Find.com Acquisition or the Find.com URL. The purchase price paid to Find.com Acquisition in consideration for the Technology Assets was 10,000,000 shares of our restricted common stock, representing 98.8% of our then outstanding common stock, however, because Matthew Krieg, our sole officer and Director beneficially owns all of the outstanding shares of our Series A Preferred Stock, he retained super majority voting control over the Company.
Find.com URL Exchange Agreement
On or around June 30, 2010, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Find.com URL Holdings, LLC., a Georgia limited liability company (“URL Holdings”) and an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Scientigo, Inc. (“Scientigo”).
Pursuant to the Exchange Agreement, we purchased approximately 51 membership interests in URL Holdings totaling over 99% of the outstanding membership interests of URL Holdings (the “URL Holdings Members”); however that percentage has increased to 100% as of the date of this report. URL Holdings owns the domain name Find.com. URL Holdings acquired the domain name through a consensual foreclosure process prior to the acquisition of the majority ownership of URL Holdings by the Company. Scientigo was a party to the consensual foreclosure process and had an option to acquire 40% of the domain name in exchange for Scientigo’s consent to the foreclosure. The Company acquired and extinguished Scientigo’s option rights in connection with the Asset Purchase Agreement in order to secure the maximum ownership the Company could acquire from URL Holdings, which as of this date stands at 100%.
The Exchange Agreement provided for (a) the issuance of an aggregate of 14,000,000 shares of the Company’s restricted common stock, and (b) the issuance of secured promissory notes (“Notes”) in an aggregate principal amount of approximately $3,620,410 (representing the aggregate amount of money owed to such URL Holdings Members pursuant to previously outstanding promissory notes) to the URL Holdings Members (the “Note Holders”). The Notes are in favor of the selling members of URL Holdings and are secured by the assets of the Company including the URL Holdings membership units purchased by the Company. The Exchange Agreement also required that the Company make a closing payment in an aggregate amount of $50,000 to the URL Holdings Members. Scientigo has since been merged with and into Phoenix Restructuring, Inc. (“Phoenix”), with Phoenix being the surviving entity in the merger.
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URL Holdings Members Notes
The Notes, bear interest at the rate of 12% per annum, and are payable as follows: (a) $50,000 which was due on the closing of the Exchange Agreement (June 30, 2010, the “Closing Date”), and which was paid to the Note Holders on such date; (b) $250,000 which was due to the Note Holders within 30 days of the closing date of the Exchange Agreement (which has not been paid to date); (c) approximately $49,918.47 which is due at the end of each quarter for six quarters, due three months, six months, nine months, twelve months, sixteen months and twenty months after the Closing Date, each representing 1/6th of the Note Holder’s portion of an aggregate of $299,511 (which has not been paid to date); (d) by way of interest payments representing the accrued interest on the Notes which are due quarterly, beginning three months after the Closing Date and continuing until 18 months from the Closing Date(which has not been paid to date); and (e) by way of twelve monthly payments of principal and interest (which monthly principal payments will total approximately $2,450,000 or $204,000 per month) representing the then outstanding balance of the Notes, the last of which payment was due December 31, 2012 (the “Maturity Date”). The Notes may be prepaid at any time without penalty.
Upon the occurrence of any event of default under the Notes (as defined and described therein) the Notes accrue interest at 14% per annum which rate the Notes are currently accruing interest as a result of our default in the payment of certain amounts due under the Notes, as described in greater detail below, and the Company was provided the right to obtain a thirty day extension to cure any event of default by issuing the Note Holders an aggregate of 50,000 shares of the Company’s common stock which the Company has previously taken advantage of (an “Extension”). If any event of default occurs and is not cured within sixty days of the date of occurrence of such event of default (subject to any Extension), the Note Holders may enforce their rights under the Notes, declare the entire amount of the Notes immediately due and payable and seek to enforce their security interests (as described below). Additionally, pursuant to the Notes, the Company is required to provide the Note Holders prompt notice of their knowledge of the occurrence of any event of default. The right to receive further Extensions was terminated by the parties’ entry into the Forbearance Agreement (described below).
The Company’s repayment of the Notes is secured by a security agreement providing the Note Holders a security interest in substantially all of the Company’s assets, personal property, and URL Holdings’ ownership of Find.com (the “Security Agreements”). Scientigo previously served as collateral agent for the benefit of the Note Holders under the Security Agreements; however, Phoenix Restructuring Inc. currently serves as collateral agent (the “Collateral Agent”). Until the Notes are repaid in full, the Collateral Agent has the right to appoint two Managers of URL Holdings, solely for the purpose of protecting the collateral securing the Notes. Matthew Krieg, the Company’s Chief Executive Officer and President, serves as President and Chief Executive Officer of URL Holdings.
The Company obtained the $50,000 which was due upon closing in the form of a loan, which does not bear interest or have a stated due date, from its Chief Executive Officer, Matthew Krieg.
Asset Purchase Agreement with Scientigo
Pursuant to the Asset Purchase Agreement, the Company purchased and extinguished Scientigo’s pre-existing option to purchase a 40% interest in URL Holdings (the “Option”). In consideration for the Option, we issued Scientigo 14,000,000 shares of restricted common stock (representing approximately 53.2% of our then outstanding shares and agreed to pay Scientigo $120,000 in cash (the “Cash Payment”). A total of $15,000 of the Cash Payment was paid at the closing of the Asset Purchase Agreement on June 30, 2010, and a total of $55,000 was due within 30 days of closing (i.e., prior to July 30, 2010); which payment has not been made as of the date of this filing and which the Company is in default in connection with as described below. Scientigo has since been merged with and into Phoenix Restructuring, Inc. (“Phoenix”), with Phoenix being the surviving entity in the merger.
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Scientigo also has the right pursuant to the Asset Purchase Agreement to name two members to the Company’s advisory board in order to oversee activities that may affect the collateral pledged to the Note Holders (as described above).
The Company obtained the $15,000 which was due upon closing in the form of a loan, which does not bear interest or have a stated due date, from its Chief Executive Officer, Matthew Krieg.
As described above, the Company did not make the required payment of $250,000 under the Notes to the Note Holders when due on July 30, 2010 (the “Default”) and did not made the required payments of $55,000 to Scientigo as provided in connection with the Cash Payment as of July 30, 2010, and has not made such required payments to date. As such, Scientigo, as Collateral Agent for the Notes has declared the Notes and the Cash Payment in default. As a result of the Default, the balance of the Notes began accruing interest at the default rate of 14% per annum.
Forbearance Agreement
Effective November 30, 2010, the Company, the Note Holders, Scientigo and URL Holdings formally executed and entered into a Forbearance Agreement (the “Forbearance Agreement”). Pursuant to the Forbearance Agreement, the Collateral Agent agreed to forbear from taking any action in connection with the Default until March 15, 2011 (subject to any default occurring other than in connection with the Default)(the “Forbearance Period”) and that the Notes would continue to bear interest at the rate of 14% per annum during the Forbearance Period. Additionally, the Company agreed to pay the Note Holders $100,000 of principal reduction from a total of $150,000 then held in escrow and issue such Note Holders an aggregate of 200,000 shares of common stock; reimburse the Collateral Agent for attorney’s fees in connection with the preparation of the Forbearance Agreement; and pay the Note Holders, before the end of the Forbearance Period, $332,903 of accrued but unpaid interest and $249,837 of principal on the Notes (collectively, the “Cure Payment”), which if paid prior to the end of the Forbearance Period, would result in the waiver of the Default, which Cure Payment was not made, and which requirement to make such Cure Payment was waived by the parties’ entry into the First Addendum, described below.
The Forbearance Agreement also required the Company to pay one-half of the first $300,000 of any equity or debt capital raised by the Company moving forward (i.e., up to $150,000 of any funds raised) as follows (i) first to the Collateral Agent, for transaction related expenses (until $20,000 is paid) and thereafter (ii) two-thirds of each dollar to the holders of the Notes and one-third of each dollar to the Collateral Agent with respect to the unpaid balance of the required Cash Payment. The Forbearance Agreement also amended the Notes to remove the right of the Company to obtain an Extension as discussed above, to reduce the percentage of Note Holders’ interests required to amend the Notes to holders of at least a majority of the outstanding principal amount of the Notes (instead of 85%); and provided for the Company to pay $50,000 of the amount owed to Scientigo from the funds then held in escrow.
The Company was not able to meet the terms of the Forbearance Agreement and in March 2012, the Note Holders, with majority approval and the Company entered into a First Addendum to Forbearance Agreement (the “First Addendum”). Pursuant to the First Addendum, the Note Holders authorized the Collateral Agent to forbear in the exercise of its rights and remedies under the Notes, security agreement securing the Notes, Forbearance Agreement and applicable law during a forbearance period commencing on June 30, 2010 and ending on the earlier to occur of (a) January 2, 2014 or (b) the date that any default (other than relating to the payment of funds under the Notes) occurs (the “Extended Forbearance Period”). The Notes were also renegotiated to represent a face value of $2,920,250. Accrued interest was forgiven and no interest accrues on the Notes during the Extended Forbearance Period.
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The First Addendum also provided that all shares issued to the Note Holders from time to time have piggy-back registration rights; the Company could borrow up to $1 million in the form of a bridge loan (in addition to up to $50,000 which could be borrowed from the Note Holders, of which a total of $40,000 was subsequently borrowed as discussed below), and that Mr. Krieg would cancel his Series A Shares in connection with the conversion of such shares into 3 million shares of common stock. New Series A Shares would then be issued to Cynthia S. White or her assigns, as collateral agent for the Find.com notes, currently in default, within 10 days of notice of such requested issuance. This would effect a change of control of the Company, which has not occurred or been requested to date. We also agreed to pay the Note Holders up to 25% of our cash flow (in the discretion of the Board of Directors), in any fiscal year that revenues associated with Find.com exceed $1 million, in connection with the Notes, and the Note Holders agreed to further forbear from taking any action under the Notes and to extend the forbearance period so long as such requirements are met. As a forbearance fee, the Company agreed to issue 1,460,125 shares of restricted common stock pro-rata with the outstanding principal amount of the Notes held by each holder, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing.
Four of the Note Holders provided the Company non-interest bearing bridge loans in the aggregate amount of $40,000 in March 2012, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, however, the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes. In consideration for providing the loan, the Company agreed to issue the participating Note Holders an aggregate of 400,000 shares of restricted common stock, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing. The loans are secured by a security interest in all of the Company’s properties and assets.
The Company raised the $150,000 paid in connection with and pursuant to the terms of the November 2010 Forbearance Agreement and funds used for working capital through the sale of promissory notes described in greater detail below under “Liquidity and Capital Resources.”
StaffMD, Inc. Acquisition
On February 4, 2011, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with StaffMD, Inc., a Georgia corporation (“StaffMD”), and the sole owner of StaffMD, Jeffrey Sisk, an individual. Pursuant to the Merger Agreement, StaffMD was merged with and into MedicalWork, LLC, a newly formed Georgia limited liability company, and the Company’s then wholly-owned subsidiary (“MedicalWork” and the “Merger”), pursuant to which MedicalWork was the surviving entity in the Merger. As a result of the closing of the Merger, the Company acquired StaffMD’s business known as PhysicianWork.com, which is a leading online job board for physicians.
In consideration for Mr. Sisk’s ownership of StaffMD and in connection with the Merger, we agreed to (a) issue Mr. Sisk 6,000,000 shares of the Company’s restricted common stock (the “Sisk Shares”); (b) pay Mr. Sisk $100,000 in cash at the closing of the Merger (the “Closing”); and (c) provide Mr. Sisk a secured, subordinated promissory note in the amount of $3,950,000 (the “Seller Note”). A condition of Closing the Merger was that the Company contributed $100,000 to MedicalWork, which contribution was made in connection with the Closing. The Merger Agreement also provided that Mr. Sisk would serve as the Manager and President and Chief Executive Officer of MedicalWork. Mr. Sisk entered into an Employment Agreement with MedicalWork in connection with the Closing, described in greater detail below (the “Employment Agreement”). The Sisk Shares were also granted piggy-back registration rights.
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Geronimo Note
The funds paid in connection with the StaffMD Merger were financed through the entry by MedicalWork into a Senior Secured Promissory Note in the amount of $250,000 with Geronimo Property Trust (“Geronimo”) on February 1, 2011 (the “Geronimo Note”). The Geronimo Note bears interest at the rate of 12% per annum, and has a default interest rate of 18% per annum. Monthly interest-only payments are due on the Geronimo Note, which was originally due February 1, 2012, but has since been automatically extended until February 1, 2013 by timely notification and payment of an extension fee pursuant to the terms of the note (provided that Geronimo currently disputes such extension and has filed a lawsuit against the Company for payment of the note, among other things, as described in greater detail under “Legal Proceedings”, below). The Geronimo Note was secured by a security interest in MedicalWork’s assets, pursuant to a Security Agreement. The Geronimo Note and the associated security interest were assumed by Jeffrey Sisk on December 31, 2011, at which time the Note was current and had been automatically extended. The Company is a secondary obligor on the Geronimo Note and remained as a secondary obligor following the parties’ entry into the Rescission Agreement, described below. The Company also issued Geronimo an aggregate of 250,000 shares of the Company’s restricted common stock in consideration for agreeing to enter into the Geronimo Note.
Of the $250,000 of proceeds the Company received from the Geronimo Note, $90,000 was allocated to Physicianwork.com marketing, $10,000 was reserved for interest on the Geronimo Note, and the balance was paid to Mr. Sisk in connection with the consideration due pursuant to the terms of the Merger Agreement and in reimbursement for Mr. Sisk’s attorney’s fees in connection with such Merger.
Rescission of StaffMD Acquisition
Effective as of December 31, 2011, we entered into an Assignment of Membership Interests Agreement (the “Rescission Agreement”) with Mr. Sisk. Pursuant to the Rescission Agreement, we agreed to transfer and assign all right, title and interest which we held in MedicalWork (including any and all interests in PhysicianJobs.com and the URL Portfolio owned by MedicalWork) to Mr. Sisk; Mr. Sisk agreed to cancel and terminate the Seller Note and the Employment Agreement; Mr. Sisk agreed to indemnify and hold the Company harmless from any claims, costs, expenses or causes of action relating to the Geronimo Note (the “Indemnification Obligations”), provided that we remain as a secondary obligor under the Geronimo Note (which remains a direct obligation of MedicalWork being secured by all of the MedicalWork assets); and Mr. Sisk agreed to return 3,000,000 shares of our common stock (which shares were issued in connection with the Merger Agreement) to us for cancellation, which shares have been cancelled, and to further pledge to us 500,000 of the shares originally issued in connection with the Merger Agreement as collateral for the Indemnification Obligations pursuant to the Pledge Agreement entered into by the Company and Mr. Sisk. Finally, as part of the Rescission Agreement, Mr. Sisk agreed to release us and our agents from and against any liability associated with the operations of MedicalWork; provided that the 3,000,000 shares of common stock retained by Mr. Sisk (including the 500,000 shares) still have piggy-back registration rights. As a result of the Rescission Agreement, we no longer hold any rights to MedicalWork except that we still remain a secondary obligor under the Geronimo Note, which is currently subject to an ongoing lawsuit as described below under “Legal Proceedings”.
Description of Business Activities
We operate websites at www.generationzerogroup.com; andwww.find.com. The information on, or that may be accessed through, our websites are not incorporated by reference into this filing and should not be considered a part of this filing.
Our current primary business focus is to monetize the find.com URL.
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Description of Find.com:
Find.com, which we acquired ownership of pursuant to our purchase of 100% of the outstanding membership interests of URL Holdings, pursuant to the transactions above, is a domain name and website. The website had been powered by certain technology assets that the Company acquired on or about April 28, 2010, as described in greater detail above. The Find.com strategy is in the development stage. Find.com is a URL that the Company believes has tremendous attributes as a domain name for purposes of branding and marketing for ecommerce. The Find.com website, which is currently not operational, is in the process of being upgraded and redesigned by the Company, with the goal of redeploying the website in the second quarter of 2013.
The Company believes that it will be able to manage and operate the domain name in a manner that will create value for the Company. This management and operation may involve strategic partnerships and revenue sharing relationships as is common in the operation of domain names. The Company believes that Find.com has a broad reach and can be used for a variety of purposes. To date Find.com has not generated revenue, but the Company believes that the domain name can be grown into a significant Internet based business. However, the success of the Find.com asset is subject to the availability of necessary financing for operations and to service the Notes. The Company is currently in negotiations with a private company in Internet marketing and search engine optimization services to potentially form a joint venture and undertake a business plan to execute a commercialization of www.find.com. The joint venture, which has not been finalized or agreed to, would create an Internet market place environment for the sale and purchase of products and services. The Company hopes to finalize a comprehensive business plan and plan of operations for Find.com during the second quarter of 2013.
Description of the Technology Assets:
The Technology Assets described above are comprised primarily of the technology that powered the www.Find.com website. Four letter URL’s that spell an easy to understand word are all privately owned or reserved. Short URL’s are preferable for marketing purposes as they are easier to remember and in the case of Find.com, the URL sends a clear message as to what the website is about so it should be easier to brand.
We believe that the Find.com URL name lends itself to being used as a search engine or for a variety of other uses as the e-commerce world continues to develop and become more focused and refined. The Company understands that Google and other large players such as Bing and Ask.com are dominant in the search space. The Company has no intention or belief that it will overtake or even compete with these large players.
The Company intends to partner through a revenue sharing agreement with other search engines and through lead generation agreements with various businesses, and selling direct products and services. The Company expects to develop certain verticals within Find.com and other websites and create revenue sharing opportunities, of which there can be no assurance.
The Company also intends to use and improve the technology assets acquired in the acquisition to develop other websites through marketing and providing information, products and services that create revenue sharing opportunities for the Company. Previously, www.Find.com and the Technology Assets have not generated significant revenues, nor any revenues while under the control of the Company, but we believe that the technology that has been developed has proven to work effectively. Through continued use, the Company hopes to build a revenue base from revenue sharing, licensing, and by using the Technology Assets in connection with other websites it hopes to acquire and market in the future, funding and opportunities permitting.
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We believe that the Technology Assets have many proprietary qualities that make them effective for online marketing and that the Technology Assets are versatile so they can be used for other websites and related applications. Our Chief Executive Officer, Matthew Krieg, has significant experience in online travel and other Internet based businesses and his experience and training should be beneficial to the Company as it moves forward with its strategy, even if a change of control occurs and his role is diminished.
Plan of Operation
Our goal is to expand or build our business through a variety of efforts. We are considering ongoing offerings of securities under private placements, acquisitions, and joint ventures with other public and private companies and other activities to either build sales or generate much needed capital to grow and undertake our business plan (for example, obtain, if possible, loans). We currently have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt securities and loans from our shareholders.
We have not generated any significant revenues to date and do not anticipate being able to generate significant revenues until such time as we can raise substantial additional capital and our websites are further developed and marketed.
In connection with our business plan, management will try and delay additional increases in operating expenses. We have undertaken certain actions and continue to implement changes designed to improve our financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies. For example, we do not have a seasoned staff of public company officers beyond the extent of experience and abilities of our Chief Executive Officer.
Our financial statements contain information expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we satisfy our liabilities and commitments in the ordinary course of business.
RESULTS FROM OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2013 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2012
We had no revenues for the three months ended March 31, 2013 or for the three months ended March 31, 2012.
We had no cost of sales for the three months ended March 31, 2013 or for the three months ended March 31, 2012.
We had general and administrative expenses of $32,042 for the three months ended March 31, 2013, compared to general and administrative expenses of $23,545 for the three months ended March 31, 2012, an increase of $8,497 from the prior period. The increase in general and administrative expenses was mainly related to the audits and SEC filings of the Company to bring it current.
We had $70,000 in amortization and depreciation expense for the three months ended March 31, 2013 compared with amortization and depreciation expense of $70,000 for the three months ended March 31, 2012.
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We had a total operating loss of $102,042 for the three months ended March 31, 2013, compared to a total operating loss of $93,545 for the three months ended March 31, 2012, an increase in total operating loss of $8,497 from the prior period due to the reasons stated above.
We had interest expense of $16,356 for the three months ended March 31, 2013, compared to interest expense of $374,411 for the three months ended March 31, 2012, a decrease in interest expense of $358,055 from the prior period, which decrease was in connection with the forgiven debt effected by the forbearance amendment with the Secured Noteholders, which included interest accrued on the secured loans, described above.
We had a total net loss of $118,398 for the three months ended March 31, 2013, compared to a total net loss of $467,956 for the three months ended March 31, 2012, a decrease in net loss of $349,558 from the prior period, which was mainly due to the $358,055 decrease in interest expense and the increase in general and administrative expenses, described above.
LIQUIDITY AND CAPITAL RESOURCES
We had total assets of $3,454,273 as of March 31, 2013, consisting of intangible assets, net of accumulated amortization of $3,430,000 and total current assets of $24,273, consisting of cash of $14,008 and prepaid expenses of $10,265.
We had total liabilities as of March 31, 2013 of $3,661,169, consisting of total current liabilities of $3,161,169; which included $17,746 of accounts payable, $98,005 of accrued liabilities, notes payable due within twelve months of $3,115,250 as described below, and $30,168 of accounts payable related party, which amount was owed to Matthew Krieg, the Company’s sole officer and Director in connection with certain loans made to the Company by Mr. Krieg, as described below; and non-current liabilities consisting of $500,000 of long-term notes payable as described below, net of unamortized discount.
We had a working capital deficit of $3,136,896 and a total deficit accumulated during the development stage of $6,842,357 as of March 31, 2013.
We incurred a net loss of $118,398 for the three months ended March 31, 2013, and had an accumulated deficit of $6,842,357 as of March 31, 2013. These conditions raise substantial doubt as to our ability to continue as a going concern. Management is trying to raise additional capital through sales of common and preferred stock. The financial statements do not include any adjustments that might be necessary if Generation Zero is unable to continue as a going concern.
We had $59,706 of net cash used in operating activities for the three months ended March 31, 2013, which was mainly due to a net loss of $118,398 offset by $70,000 of amortization of intangible assets.
In December 2009, the Company borrowed $5,000 from its sole officer and Director, Matthew Krieg. Between February and March 2010, the Company borrowed a total of $6,720 from Mr. Krieg. The amount loaned bears zero interest and is due on demand with 90 days’ notice. As of December 31, 2012, a total of $30,168 was owed to Mr. Krieg. As of March 31, 2013, a total of $30,168 was owed to Mr. Krieg.
The Company raised the $150,000 provided to the escrow agent in connection with and pursuant to the terms of the Forbearance Agreement (described above) through the sale of promissory notes. A total of $150,000 was loaned to the Company in November 2010 by Gerald Modesitt, an individual, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date, as extended of June 2, 2014.
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Additionally, Matthew Krieg, the Company’s sole officer and Director agreed to assign Mr. Modesitt an aggregate of $100,000 which the Company owed to Mr. Krieg as of the date of the Modesitt Note, which Modesitt Note evidenced a principal amount of $250,000 (representing the $150,000 loaned by Mr. Modesitt and the rights to the $100,000 assigned to Mr. Modesitt by Mr. Krieg). The Company issued Mr. Modesitt 750,000 shares of restricted common stock in connection with the Modesitt Note. As of December 31, 2011 and 2012, a total of $284,253 and $320,304, respectively, including accrued and unpaid interest thereon, was owed under the Modesitt Note. As of March 31, 2013, a total of $330,009 was owed under the Modesitt Note.
Additionally in November 2010, a third party loaned the Company $50,000, which was evidenced by a promissory note, which bears interest at the rate of 12% per annum (with interest payable monthly until maturity) and a maturity date, as extended of June 2, 2014. The Company issued the third party an aggregate of 300,000 shares of common stock in connection with the Third Party Note. As of December 31, 2011 and 2012, a total of $55,221 and $62,224, respectively, including accrued and unpaid interest thereon, was owed under the Third Party Note. As of March 31, 2013, a total of $64,110 was owed under the Third Party Note.
Four of the Note Holders provided the Company non-interest bearing convertible bridge loans in the aggregate amount of $40,000 in March 2012, with a maturity date of the earlier of (a) the date the Company receives aggregate funding from any source in excess of $50,000 and (b) January 2, 2014, provided that the Company is currently in the process of obtaining waivers from the Note holders in order to allow the Company to raise additional funding for working capital purposes. In consideration for providing the loan, the Company agreed to issue the participating Note Holders 400,000 shares of restricted common stock, which shares have not been physically issued to date and are not included in the number of issued and outstanding shares disclosed throughout this filing. The loans are secured by a security interest in all of the Company’s properties and assets.
On August 15, 2012, the Company issued a subordinated Convertible Promissory Note to John Strickland and Kimberly Ann Griffith, joint tenants, in the amount of $200,000 for working capital which included funding for the specific purpose of bringing the Company current in its SEC filings so that the Company would be in a better position to raise additional capital as needed to launch the Company’s strategic plan. The Convertible Promissory Note accrues interest at the rate of 10% per annum (payable monthly in arrears) and is due and payable on August 15, 2014. The Convertible Promissory Note is convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $0.08 per share.
As of the date of this filing, the Company owes $2,920,250 to the Note Holders in connection with the acquisition of Find.com, the payment of which is secured by a security interest in substantially all of our assets. The Company is in default in connection with the payment of the Notes, provided that pursuant to the terms of a Forbearance Agreement and a First Addendum thereto, described in greater detail above, the Note Holders have agreed to forbear from taking any action in connection with the default during a forbearance period ending on the earlier to occur of (a) January 2, 2014 or (b) the date that any default (other than relating to the payment of funds under the Notes) occurs (the “Extended Forbearance Period”). No interest accrues on the Notes during the Extended Forbearance Period. The First Addendum also provided that all shares issued to the Note Holders from time to time have piggy-back registration rights; and that the Company could borrow up to $1 million in the form of a bridge loan (in addition to up to $50,000 which could be borrowed from the Note Holders, of which a total of $40,000 was subsequently borrowed).The agreement also requires that Mr. Krieg transfer ownership of the Series A Shares (or cancel such shares and have them reissued) to Cynthia S. White, as collateral agent for the notes (currently in default) associated with the Find.com acquisition, or their assigns within 10 days of notice of such requested transfer (or reissuance), which has not occurred or been requested to date. We also agreed to issue Mr. Krieg 3 million shares of common stock in connection with such cancellation or transfer. We also agreed to pay the Note Holders up to 25% of our cash flow (in the discretion of the Board of Directors), in any fiscal year that revenues associated with Find.com exceed $1 million, in connection with the Notes, and the Note Holders agreed to further forebear from taking any action under the Notes and to extend the forbearance period so long as such requirements are met.
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We do not currently have any formal commitments or identified sources of additional capital from third parties or from our officer, Director or majority shareholders. We can provide no assurance that additional financing will be available on favorable terms, if at all. If we are not able to raise the capital necessary to continue our business operations, we may be forced to abandon or curtail our business plan and/or suspend our exploration activities.
In the future, we may be required to seek additional capital by selling additional debt or equity securities, selling assets, if any, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders. We provide no assurance that financing will be available in amounts or on terms acceptable to us, or at all.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on our evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.This conclusion was based on the existence of the material weaknesses in our internal control over financial reporting discussed below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified and continue to have the following material weaknesses in our internal controls over financial reporting: we currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Additionally, due to the fact that we have only one officer and Director, such lack of experienced personnel and segregation of duties may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate and timely financial information to our stockholders.
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To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls as our financial position and capital availability improves.
Changes in Internal Control Over Financial Reporting
We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations except as provided below. We may become involved in material legal proceedings in the future.
On February 12, 2013, Geronimo filed a lawsuit against the Company, MedicalWork and StaffMD in the Superior Court of Fulton County, Georgia (File No. 2013CV227180), alleging breach of contract by the Company and MedicalWork, due to the Company’s and MedicalWork’s alleged failure to repay the Geronimo Note; unjust enrichment against MedicalWork and StaffMD; fraud against the Company due to alleged breaches of representations made by the Company; and seeking recovery of damages and attorneys’ fees. The suit also seeks to enjoin us from selling find.com. The suit claims that Geronimo never agreed to extend the due date of the Geronimo Note from February 1, 2012 to February 1, 2013 and that a total of approximately $357,500 is due pursuant to the Geronimo Note (including $250,000 of principal, $75,500 of interest and $33,000 of late charges). Geronimo also alleges that it sent the Company a default notice relating to the Geronimo Note on February 9, 2012, provided that the Company never received such notice. The Company subsequently filed an answer to the lawsuit, denying Geronimo’s claims, disputing substantially all of Geronimo’s allegations as untrue, and asserting counterclaims against Geronimo including tortious interference with business relations; conspiracy to commit tortious interference with business relations; defamation; conspiracy to commit defamation; breach of contract; fraud; conspiracy to commit fraud; and seeking attorney’s fees and expenses of litigation. At this very early stage of the litigation the outcome cannot be predicted, however the Company intends to vigorously defend itself against Geronimo’s claims. The Company will also retain our indemnification rights against Mr. Sisk for all damages caused by Geronimo’s claims, and there is a significant likelihood that one or more additional parties could become part of the litigation before final resolution.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on April 25 2013.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits
Exhibits A
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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, hereunto duly authorized.
| | | |
| Generation Zero Group, Inc. | |
| | | |
Dated: May 6, 2013 | By: | /s/ Matthew Krieg | |
| | Matthew Krieg | |
| | President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), Treasurer, Secretary and Director | |
| | | |
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EXHIBIT INDEX
Exhibit A
| |
Exhibit Number | Description of Exhibit |
| |
10.1(1) | Asset Purchase Agreement with Find.com Acquisition, Inc. |
| |
10.2(2) | Share Exchange Agreement with the Members of URL Holdings |
| |
10.3(2) | Asset Purchase Agreement with Scientigo, Inc. |
| |
10.4(2) | Security Agreement executed by the Company in favor of Scientigo as collateral agent for the holders of the Notes |
| |
10.5(2) | Form of Secured Promissory Notes |
| |
10.6(2) | $55,000 Promissory Note with Scientigo |
| |
10.7(3) | Note Termination Agreement dated October 23, 2010 by and between Generation Zero Group, Inc. and Seven Palm Investments, LLC |
| |
10.8(4) | Promissory Note $250,000 withGerald Modesitt dated November 4, 2010 |
| |
10.9(5) | Amendments to Promissory Note $250,000 withGerald Modesitt dated April 16, 2012 and June 15, 2012 |
| |
10.10(4) | Promissory Note $50,000 withEquity Trust Company Custodian FBO Larry Gantz IRA 110591 dated November 4, 2010 |
| |
10.11(5) | Amendments to Promissory Note $50,000 withEquity Trust Company Custodian FBO Larry Gantz IRA 110591 dated April 16, 2012 and June 15, 2012 |
| |
10.12(4) | Assignment of Exclusive Agreement by Talent Search and Rescue, LLC in favor of Generation Zero Group, Inc. dated September 30, 2010 |
| |
10.13(6) | Forbearance and Note Amendment Agreement |
| |
10.14(7) | Promissory Note ($3,950,000 – Jeffrey Sisk) |
| |
10.15(7) | Promissory Note ($250,000 – Geronimo Property Trust) |
| |
10.16(7) | Employment Agreement with Jeffrey Sisk |
| |
10.17(7) | Security Agreement with Geronimo Property Trust |
| |
10.18(7) | Subordination Agreement with Collateral Agent for Senior Noteholder |
| |
10.19(5) | Revision of Payment Terms of Promissory Note with Jeffrey Sisk |
| |
10.20(5) | Employment Agreement Compensation Waiver with Jeffrey Sisk (effective April 16, 2011) |
| |
10.21(5) | Assignment of Membership Interests Agreement with Jeffrey Sisk (December 31, 2011) |
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| |
| |
10.22(5) | Pledge Agreement with Jeffrey Sisk (December 31, 2011) |
| |
10.23(5) | Convertible Promissory Note – John Strickland and Kimberly Ann Griffith (August 15, 2012) |
| |
10.24(5) | First Addendum to Forbearance and Note Amendment Agreement |
| |
31.1* | Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| |
32.1* | Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| |
101.INS** | XBRL Instance Document |
| |
101.SCH** | XBRL Taxonomy Extension Schema Document |
| |
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document |
| |
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document |
| |
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document |
| |
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith.
(1) Filed as an exhibit to our Form 10-Q Quarterly Report, filed with the Commission on May 24, 2010, and incorporated herein by reference.
(2) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on July 12, 2010, and incorporated herein by reference.
(3) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 22, 2010, and incorporated herein by reference.
(4) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on November 24, 2010, and incorporated herein by reference.
(5) Filed as an exhibit to our Form 10-K Annual Report, filed with the Commission on January 25, 2013 and incorporated herein by reference.
(6) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on December 10, 2010, and incorporated herein by reference.
(7) Filed as an exhibit to our Form 8-K Current Report, filed with the Commission on February 14, 2011, and incorporated herein by reference.
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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