EX-99.2 6 ex-99_2.htm UNAUDITED BALANCE SHEET OF NABE AS OF JUNE 30, 2010 ex-99_2.htm
 
Exhibit 99.2
 
Balance Sheet
(Unaudited)
North American Bio-Energies, LLC
   
June 30, 2010
    
December 31, 2009
  
   
(Restated)
        
ASSETS
            
Current Assets
            
Cash
   $ 3,655     $ 12,447  
Accounts receivable, net
     8,748       8,305  
Accounts receivable, related party
     305,954       72,799  
Prepaid expenses
     20,438       -  
Inventory
     95,320       79,021  
Tax credit receivable
     176,988       164,190  
Total Current Assets
     611,103       336,762  
                 
Property, plant and equipment, net
     205,804       224,231  
Construction in progress
     294,074       285,458  
TOTAL ASSETS
   $ 1,110,981     $ 846,451  
                 
                 
LIABILITIES & MEMBERS’ EQUITY
                
Current Liabilities
                
Accounts payable
   $ 515,001     $ 260,909  
Accrued liabilities
     6,365       5,472  
Current maturities of long-term debt
     54,517       54,517  
Notes payable to related parties
     97,500       97,500  
Total Current Liabilities
     673,383       418,398  
                 
Long-term debt
     212,489       227,520  
Total Liabilities
     885,872       645,918  
                 
Members’ Equity
     225,109       200,533  
                 
TOTAL LIABILITIES & MEMBERS’ EQUITY
   $ 1,110,981     $ 846,451  
 
The accompanying notes are an integral part of these financial statements

 
 
 
 

North American Bio-Energies, LLC
Statements of Operations
(Unaudited)

   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
   
2010
(Restated)
    
2009
    
2010
(Restated)
    
2009
  
Revenues
   $ 37,105     $ 94,150     $ 39,058     $ 115,930  
Revenues from related parties
     290,615       70,055       379,693       70,055  
Cost of revenues
     291,357       159,053       347,529       200,022  
Depreciation expense
     7,172       11,355       18,877       22,710  
Gross profit (loss)
     29,191       (6,203 )     52,345       (36,747 )
                                 
Operating expenses:
                                
Selling, general & administrative expenses
     19,762       24,300       24,981       37,273  
Inventory revaluation
     -       40,593       -       40,593  
Operating income (loss)
     9,429       (71,096 )     27,364       (114,613 )
                                 
Other income (expense):
                                
Interest expense
     (3,656 )     (5,045 )     (7,288 )     (7,633 )
Other income
     4,500       39,790       4,500       29,790  
Net Income (Loss)
   $ 10,273     $ (36,351 )   $ 24,576     $ (92,456 )

The accompanying notes are an integral part of these financial statements

 
 
 
 

North American Bio-Energies, LLC
Statements of Cash Flows
For the Six Months Ended June 30, 2010 and 2009
(Unaudited)

   
2010
(Restated)
    
2009
  
Cash Flows from Operating Activities
            
Net income (loss)
   $ 24,576     $ (92,456 )
Adjustments to reconcile net income (loss) to net cash provided by in operating activities:
                
Depreciation expense
     18,877       22,710  
Inventory revaluation
     -       40,593  
Changes in operating assets and liabilities:
                
Accounts receivable
     (233,598 )     (12,345 )
Inventory
     (16,299 )     11,651  
Tax credit receivable
     (12,798 )     (6,030 )
Prepaid expenses and other current assets
     (20,438 )     -  
Accounts payable
     254,092       (9,684 )
Accrued expenses
     893       5,903  
Net cash provided by operating activities
     15,305       (39,658 )
                 
Cash Flows from Investing Activities
                
Purchase of assets - construction in progress
     (8,616 )     (13,200 )
Purchase of fixed assets
     (450 )     (5,094 )
Net cash used in investing activities
     (9,066 )     (18,294 )
                 
Cash Flows from Financing Activities
                
Repayments of third party debt
     (15,031 )     (13,902 )
Proceeds from related party debt
     -       55,000  
Net cash provided by financing activities
     (15,031 )     41,098  
Net Change in Cash
     (8,792 )     (16,854 )
Cash at Beginning of Period
     12,447       42,408  
Cash at End of Period
   $ 3,655     $ 25,554  
                 
Supplemental Disclosures of Cash Flow Information
                
Cash paid during year for:
                
Interest
   $ 7,288     $ 7,633  
Income Taxes
   $ -     $ -  

The accompanying notes are an integral part of these financial statements
 
 
 
 

North American Bio-Energies, LLC
Statement of Members’ Equity
For the Six Months Ended June 30, 2010
(Unaudited)
(Restated)

Members’ equity at December 31, 2009
   $ 200,533  
Net income
     24,576  
Members’ equity at March 31, 2010
   $ 225,109  

The accompanying notes are an integral part of these financial statements.


 
 
 
 

NORTH AMERICAN BIO-ENERGIES, LLC
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 1- BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of North American Bio-Energies, LLC (“the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, the financial statements do not include all information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete annual financial statements. In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2010, or for any subsequent period. These interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2009, included herein.

Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2009 have been omitted.

NOTE 2- LINE OF CREDIT

On April 27, 2010, the Company amended its line of credit into a five-year term loan with 59 monthly principal and interest installments of $4,805 with the final payment on April 25, 2015.  The note bears interest at Prime + 1%, but no less than 5.25%.

NOTE 3 - RESTATEMENT

The Company determined that there was an error in previously filed financial statements as of and for the six months ended June 30, 2010 related to the classifications of certain transactions occurring in May 2010 in which the Company purchased off specification biodiesel to be reprocessed to meet ASTM standards and then sold it to end users. The transactions were originally recorded as brokered sales, in which case the original seller would be responsible for collecting payment from the end user directly. These transactions should have been recorded as direct sales, as the Comapny is in fact responsible for the collection of payment from the end users and disbursement to the original sellers.  In addition, the Company determined that certain costs related to these transactions were not recorded and has adjusted cost of revenues to include these additional costs.

The balance sheet and statement of operations are restated as follows:

 
 
 
 

North American Bio-Energies, LLC
Balance Sheet
(Unaudited)

   
As Previously Reported
    
Adjustments
    
Restated
  
ASSETS
                  
Current Assets
                  
   Cash
   $ 3,655           $ 3,655  
   Accounts receivable, net
     8,748             8,748  
   Accounts receivable, related party
     105,548       200,406   (1)   305,954  
   Prepaid expenses
     20,438               20,438  
   Inventory
     95,320               95,320  
   Tax credit receivable
     176,988               176,988  
Total Current Assets
     410,697       200,406       611,103  
                         
   Property, plant and equipment, net
     205,804               205,804  
   Construction in progress
     294,074               294,074  
TOTAL ASSETS
   $ 910,575       200,406     $ 1,110,981  
                         
                         
LIABILITIES & MEMBERS’ EQUITY
                        
Current Liabilities
                        
      Accounts payable
   $ 240,085       274,916   (1) $ 515,001  
      Accrued liabilities
     6,365               6,365  
      Current maturities of long-term debt
     54,517               54,517  
      Notes payable to related parties
     97,500               97,500  
Total Current Liabilities
     398,467       274,916       673,383  
                         
      Long-term debt
     212,489               212,489  
Total Liabilities
     610,956       274,916       885,872  
                         
Members’ Equity
     299,619       (74,510 )     225,109  
                         
TOTAL LIABILITIES & MEMBERS’ EQUITY
   $ 910,575       200,406     $ 1,110,981  

(1)  To reflect correct receivables and payables for direct sales of bio-diesel

 
 
 
 
 
North American Bio-Energies, LLC
Statements of Operations
(Unaudited)
    Three Months Ended June 30, 2010  
    As Reported     Adjustments     Restated  
                       
Revenues
   $ 37,105           $ 37,105  
Revenues from related parties
     241,882       48,733   (2)   290,615  
Cost of revenues
     168,114       123,423   (2)   291,357  
Depreciation expense
     7,172               7,172  
  Gross profit (loss)
     103,701       (74,510 )     29,191  
                         
Operating expenses:
                        
  Selling, general & administrative expenses
     19,762               19,762  
   Inventory revaluation
     -               -  
    Operating income (loss)
     83,939       (74,510 )     9,429  
                         
Other income (expense):
                        
  Interest expense
     (3,656 )             (3,656 )
  Other income
     4,500               4,500  
Net Income (Loss)
   $ 84,783       (74,510 )   $ 10,273  
 
(2) To reflect revenues and costs related to direct sales transactions that were previously unrecorded

 
 
 
 

North American Bio-Energies, LLC
Statements of Operations
 
   
Six Months Ended June 30, 2010
  
   
As Reported
  
Adjustments
    
Restated
  
                       
Revenues
   $ 39,058           $ 39,058  
Revenues from related parties
     330,960       48,733 (2)     379,693  
Cost of revenues
     224,286       123,243 (2)     347,529  
Depreciation expense
     18,877               18,877  
  Gross profit (loss)
     126,855       (74,510 )     52,345  
                         
Operating expenses:
                        
  Selling, general & administrative expenses
     24,981               24,981  
   Inventory revaluation
     -               -  
    Operating income (loss)
     101,874       (74,510 )     27,364  
                         
Other income (expense):
                        
  Interest expense
     (7,288 )             (7,288 )
  Other income
     4,500               4,500  
Net Income (Loss)
   $ 99,086       (74,510 )   $ 24,576  

(2) To reflect revenues and costs related to direct sales transactions that were previously unrecorded