WASTE TO ENERGY GROUP, INC.
2829 Bird Avenue, Suite 12
Miami, Florida 33133
October21, 2009
Kathleen Collins
Accounting Branch Chief
Division of Corporate Finance
United States Securities and Exchange Commission
100 F Street N.W.
Washington, D.C. 20549-0405
Mail Stop 4561
Re: Waste to Energy Group, Inc.
Item 4.02Form 8-K& Item 4.02 Form 8-K/A
FiledonSeptember 24, 2009and October 9, 2009, respectively
File No. 000-53489
Dear Ms.Collins:
Thank you for your comments datedOctober 10,2009in connection withthe submissionon Form8-Kand Form 8-K/AforWaste to Energy Group, Inc.(the “Company”) filed with the Securities and Exchange Commission onSeptember 24,2009and October 9, 2009, respectively.
On behalf of the Company, we submit this response letterfiled electronically with the Commission onOctober21, 2009.
Please direct copies of all responses and any additional commentsto the following address and facsimilenumberor email address:
Ruairidh Campbell, Esq.
Orsa & Company
600 Westwood Terrace
Austin, Texas 78746
Telephone:(512) 462-3327
Facsimile:(512) 462-3328
Email:ruairidhcampbell@msn.com
The following are our detailed responses to your comments.
Item 4.02 Form 8-K/A Filed October 9, 2009
1. | We notefrom your response to prior comment 1 that only the fourth quarter of fiscal 2008 was impacted by the errors noted in the Company’s Item 4.02 Form 8-K.Please tell us the nature ofeachof the errors. In this regard, provide a breakdown of the adjustments to each line item that was impacted by these |
2. | errors and describe the cause of such errors. Also, tell us how you determined that these errors did not impact previously reported periods. |
Response:
The errors impacted our statement of operations, balance sheets, and statements of cash flows, as follows:
Statement of Operations
The Companyrealizeda revenue restatementof $435for its fiscal year ended May 31, 2008due toa detail of net revenue rather than gross revenue which should have includedanaccounts receivable item of $387. The statement of operations was further impacted byan overstatement of $2in cash dueto accounting error, and an increase of $49 in general and administrative expenses and $1 in professional fees.The remainder of the increase in revenue resulted in a decrease in losses from operations of $385 for the period end.
Balance Sheets
Thedecreasein losses from operationsfor its fiscal year ended May 31, 2008 of $385corresponds toaccounts receivableamount of $387 and theoverstatement of $2 in cashfor the period end.Anadjustmentof $21,655on the balance sheetsforstockholders equityis not a restatement adjustmentbut rather a reflectionof the forward spliteffected subsequent totheoriginalauditof the periodandprior to the restatement.
Statements of Cash Flows
The decrease in losses from operations for its fiscal year ended May 31, 2008 of $385 correspondstoaccounts receivable of $387in accounts receivableas detailedunder operating activities, with thedifference of $2 reflected asan increase in net cash used in operating activitiesat the end of the period.
The errors were discovered on internal accounting review of the accounts for fiscal year ended May 31, 2008 which included the fourth quarter of the Company’s fiscal year.
The following financialinformation, as filed with the Commission on October 9, 2009 on Form 8-K/A, providesa comparison of the Company’s restated, audited financialstatements and the prioraudited financial statements for the year ended May 31, 2008.
Waste to Energy Group Inc.
(Formerly Your Digital Memories, Inc)
(A Development Stage Company)
Balance Sheets
May 31, | May 31, | ||||||
2008 | Adjustments | 2008 | |||||
(Audited) | (Audited) | ||||||
ASSETS | (Restated) | ||||||
Current Assets | |||||||
Cash | $ | 686 | $ | (2) | $ | 688 | |
Accounts receivable | 387 | 387 |
| ||||
Total current assets | 1,073 | 385 | 688 | ||||
Non-current | |||||||
Computer equipment, net of amortization | 5,497 | 0 | 5,497 | ||||
Website, net of amortization | 17,500 | 0 | 17,500 | ||||
Total Non-current | 22,997 | 0 | 22,997 | ||||
Total Assets | $ | 24,070 | $ | 385 | $ | 23,685 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||
Liabilities | |||||||
Accounts payable and accruals | $ | 3,000 | $ | 0 | $ | 3,000 | |
Loans Payable | - | - | |||||
Accrued Interest - Loans Payable | - | - | |||||
Loans Payable - Related Party | - | - | |||||
Accrued Interest - Related Party |
|
|
| ||||
Total Liabilities | $ | 3,000 | $ | 0 | $ | 3,000 | |
Stockholders' Equity (Deficit) (Note 4,5) | |||||||
| Preferred stock, authorized 50,000,000 shares, par value $0.0001. | ||||||
Common stock, authorized 2,500,000,000 shares, par value, $0.0001 | |||||||
Issued and outstanding: | |||||||
225,565,000 and 50,265,000 Common Shares for the years ended May 31, 2009 and 2008, respectively | $ | 22,557 | $ | 21,655 | $ | 902 | |
Additional paid-in capital | 55,585 | (21,655) | 77,240 | ||||
Contributed capital | - | - | |||||
Deficit accumulated during the development stage | (57,072) | 0 | (57,072) | ||||
|
| ||||||
Total Stockholders’ Equity (Deficit) | $ | 21,070 | $ | 385 | $ | 20,685 | |
Total Liabilities and Stockholders' Equity (Deficit) | $ | 24,070 | $ | 385 | $ | 23,685 |
Waste to Energy Group Inc.
(Formerly Your Digital Memories, Inc)
(A Development Stage Company)
Statements of Operations
Year-ended | Year-ended | ||||||
May 31, | May 31, | ||||||
2008 | Adjustments | 2008 | |||||
(Audited) | (Audited) | ||||||
(Restated) |
|
| |||||
REVENUE | $ | 1,596 | $ | 435 | $ | 1,161 | |
OPERATING EXPENSES | |||||||
General and Administrative | 5,548 | 49 | 5,499 | ||||
Professional Fees | 11,558 | 1 | 11,557 | ||||
Consulting | 8,500 | - | 8,500 | ||||
Depreciation | 4,000 | - | 4,000 | ||||
Filing Fees | 1,560 | - | 1,560 | ||||
Impairment of Asset | - | - | - | ||||
Total Expenses | $ | 31,166 | $ | 50 | $ | 31,116 | |
Loss from operations | $ | (29,570) | $ | 385 | $ | (29,955) | |
Interest Expense | |||||||
Interest – Loans | - | - | - | ||||
Interest – Related Party | - | - | - | ||||
Total Interest Expense | - | - | - | ||||
Interest income | 577 | - | 577 | ||||
Loss before income taxes | $ | (28,993) | $ | 385 | $ | (29,378) | |
Provision for income taxes | - | - | - | ||||
Net loss | $ | (28,993) | $ | 385 | $ | (29,378) | |
Basic and Diluted (Loss) per Share | $ | 0 | $ | - | $ | 0 | |
Weighted Average | |||||||
Number of Shares | 18,224,823 | 9,202,223 | 9,022,600 |
Waste to Energy Group Inc.
(Formerly Your Digital Memories, Inc)
(A Development Stage Company)
Statements of Cash Flows
Year-ended | Year-ended | |||||||||
May 31, | May 31, | |||||||||
2008 | Adjustments | 2008 | ||||||||
(Audited) | (Audited) | |||||||||
Operating Activities | (Restated) | |||||||||
Net (loss) | $ | (28,993) | $ | 385 | $ | (29,378) | ||||
Adjustments to reconcile net loss to net loss cash used in operating activities: | ||||||||||
Depreciation | 4,000 | 4,000 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (387) | (387) | 0 | |||||||
Accounts payable and accrued liabilities | 3,000 | 3,000 | ||||||||
Accrued interest – loans payable | - | - | ||||||||
Accrued interest – related party | - |
| - | |||||||
Net Cash Used by Operating Activities | $ | (22,380) | $ | (2) | $ | (22,378) | ||||
Financing Activities | ||||||||||
Proceeds from sale of Common Stock | - | - | ||||||||
Loans payable | - | - | ||||||||
Loans payable – related party | - | - | ||||||||
Contributed capital | - |
| - | |||||||
Net Cash Provided by Financing Activities | - |
| - | |||||||
Investing Activities | ||||||||||
Purchase of computer equipment and website | (26,997) |
| (26,997) | |||||||
Net Cash Used in Investing Activities | $ | (26,997) | $ |
| $ | (26,997) | ||||
(Decrease) Increase in Cash during the period | (49,377) | (2) | (49,375) | |||||||
Cash, Beginning of Period | 50,063 | 50,063 | ||||||||
Cash, End of Period | $ | 686 | $ | (2) | $ | 688 | ||||
Supplemental disclosure with respect to cash flows: | ||||||||||
Cash paid for income taxes | - | - | ||||||||
Cash paid for interest | - | - |
2. We note thatthe Company’s May 31, 2009 Form 10-K included restated financial statements at and for the year ended May 31, 2008. Tell us how your auditors considered including a reference in their audit report to the restatements. We refer you to AU 561.06. Also, tell us how you considered including footnote disclosures regarding thisrestatementpursuant to ASC 250-10-50-7 through ASC 250-10-50-10.
Response:
The Company’s auditor did consider including a reference in their audit report in accordance with the guidance provided by AU 516.06 but decided against such reference as AU 561.06 suggests that such action should be taken if the auditor believes that “there are persons currently relying or likely to rely on the financial statements who would attach importance to the information.” Since the effect of the restatement was to reduce the Company’s net loss in fiscal year ended May 31, 2008 by less than two percent its auditors did not believe that this restatement would be considered important by any persons relying or likely to rely on these financial statements.
3. We notefrom your response to prior comments 2 and 3 that the Company intends to file an amended Form 10-K for May 31, 2008 on or before October 15, 2009. Please note that the Staff will continue to monitor these issues and may have further comments when the Form 10-K/A is filed.
Response:
Despite the immateriality of the prior period misstatement, the Company’s most recent Form 10-K for the period ended May 31, 2009 includes a footnote pursuant to ASC 250-10-5-8 and ASC 250-10-50-10 that describes the nature of misstatements for the period ended May 31, 2008.Further, our Form 8-K/A filed with the Commission on October 9, 2009 identifies in detail every adjustment made to the Company’s financial statementsfor the period ended May 31, 2008as the result of the restatement.Therefore, the Company no longer believes that an amendment to its Form 10-K for the period ended May 31, 2008 is warranted.
We do hope that the information provided above is responsive to your comments. Should you have any additional comments or questions, please contact us.
Sincerely,
/s/ Maria C. Maz
Maria C. Maz, Chief Executive Officer