posted
So their quarterly and annual reports were filed. What do you make of them? I'm new to all of this but the quaterly report pretty much said "we're broke" did it not? They released a report a while back that was worded the exact same way...I'm a bit confused and wondering if someone can shed some light on SWVC.
-------------------- Pennies Make Dollars Posts: 8 | From: South Florida | Registered: Jul 2007
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION BUSINESS RISK FACTORS
There are many important factors that have affected, and in the future could affect, GS Carbon's business, including but not limited to the factors discussed below, which should be reviewed carefully together with other information contained in this report. Some of the factors are beyond our control and future trends are difficult to predict.
There is substantial doubt concerning our ability to continue as a going concern.
GS Carbon had approximately $58,887 in cash at March 31, 2007 and had current liabilities totaling $3,456,553. These matters raise substantial doubt about GS Carbon's ability to continue as a going concern. Management's plans include raising additional proceeds from debt and equity transactions and completing strategic acquisitions.
The issuance of shares under our agreements with Cornell and Highgate could increase our outstanding shares by over 30%.
While Cornell and Highgate are subject to restrictions on conversion of their respective debentures limiting their ownership to 4.9% of our common stock, upon default the Cornell March 31, 2007. The issuance of these shares would dilute the interest of our current shareholders by over 30%.
The conversion of our convertible debentures, the exercise of any outstanding warrants and options and GS Carbon's various anti-dilution and price-protection agreements could cause the market price of our common stock to fall, and may have dilutive and other effects on our existing stockholders.
The conversion of our outstanding convertible debentures (including the Cornell Debenture and Highgate Debenture), and the exercise of our outstanding warrants and options could result in the issuance of up to 55,000,000 shares of common stock. Such issuances would reduce the percentage of ownership of our existing common stockholders and could, among other things, depress the price of our common stock. This result could detrimentally affect our ability to raise additional equity capital. In addition, the sale of these additional shares of common stock may cause the market price of our stock to decrease.
We may be unable to satisfy our current debts.
Our total liabilities as of March 31, 2007 were $5,674,939. We cannot afford to pay these amounts out of our operating cash flows and our ability to operate will be significantly impaired if we cannot reduce the Cornell and Highgate debt with registered stock.
We lack capital to fund our operations.
During the three months ended March 31, 2007 our operations used $333,352 in cash. In addition, during those twelve months we were required to make payments on some of our outstanding debts. Loans from some of our shareholders and the issuance convertible debentures funded both the cash shortfall from operations and our debt service. Those individuals may not be able to continue to fund our operations or our debt service.
Our operations will suffer if we are unable to manage our rapid growth.
We are currently experiencing a period of rapid growth through internal expansion and strategic acquisitions. This growth has placed, and could continue to place, a significant strain on our management, personnel and other resources. Our ability to grow will require us to effectively manage our collaborative arrangements and to continue to improve our operational, management, and financial systems and controls, and to successfully train, motivate and manage our employees. If we are unable to effectively manage our growth, we may not realize the expected benefits of such growth, and such failure could result in lost sales opportunities, lost business, difficulties operating our assets and could therefore significantly impair our financial condition.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
BUSINESS RISK FACTORS (continued)
We may have difficulty integrating our recent acquisitions into our existing operations.
Acquisitions will involve the integration of companies that have previously operated independently from us, with focuses on different geographical areas. We may not be able to fully integrate the operations of these companies without encountering difficulties or experiencing the loss of key employees or customers of such companies. In addition, we may not realize the benefits expected from such integration.
Our failure to attract qualified engineers and management personnel could hinder our success.
Our ability to attract and retain qualified engineers and other professional personnel when we need them will be a major factor in determining our future success. There is a very competitive market for individuals with advanced engineering training, and we are not assured of being able to retain the personnel we will need.
Key personnel are critical to our business and our future success depends on our ability to retain them.
Our success depends on the contributions of our key management, environmental and engineering personnel. The loss of these officers could result in lost sales opportunities, lost business, difficulties operating our assets, difficulties raising additional funds and could therefore significantly impair our financial condition. Our future success depends on our ability to retain and expand our staff of qualified personnel, including environmental technicians, sales personnel and engineers. Without qualified personnel, we may incur delays in rendering our services or be unable to render certain services. We may not be successful in our efforts to attract and retain qualified personnel as their availability is limited due to the demand of hazardous waste management services and the highly competitive nature of the hazardous waste management industry. We do not maintain key person insurance on any of our employees, officers or directors.
GreenShift Corporation can exert control over us and may not make decisions that further the best interests of all stockholders.
GreenShift Corporation controls 100% of our outstanding Series B preferred stock. The preferred shares are convertible into 85% of our Common Stock. As a result, GreenShift Corporation exerts a significant degree of influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in control of us and might affect the market price of our common stock, even when a change in control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders and accordingly, they could cause us to enter into transactions or agreements which we would not otherwise consider.
GS Carbon is not likely to hold annual shareholder meetings in the next few years.
Delaware corporation law provides that members of the board of directors retain authority to act until they are removed or replaced at a meeting of the shareholders. A shareholder may petition the Delaware Court of Chancery to direct that a shareholders meeting be held. But absent such a legal action, the board has no obligation to call a shareholders meeting. Unless a shareholders meeting is held, the existing directors elect directors to fill any vacancy that occurs on the board of directors. The shareholders, therefore, have no control over the constitution of the board of directors, unless a shareholders meeting is held. Management does not expect to hold annual meetings of shareholders in the next few years, due to the expense involved. Kevin Kreisler who is currently the sole director of GS Carbon was appointed to that position by the previous directors. If other directors are added to the Board in the future, it is likely that Mr. Kreisler will appoint them. As a result, the shareholders of GS Carbon will have no effective means of exercising control over the operations of GS Carbon.
Investing in our stock is highly speculative and you could lose some or all of your investment.
The value of our common stock may decline and may be affected by numerous market conditions, which could result in the loss of some or the entire amount invested in our stock. The securities markets frequently experience extreme price and volume fluctuations that affect market prices for securities of companies generally and very small capitalization companies such as us in particular.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)
BUSINESS RISK FACTORS (continued)
The volatility of the market for GS Carbon common stock may prevent a shareholder from obtaining a fair price for his shares.
The common stock of GS Carbon is quoted on the OTC Bulletin Board. It is impossible to say that the market price on any given day reflects the fair value of GS Carbon, since the price sometimes moves up or down by 50% or more in a week's time. A shareholder in GS Carbon who wants to sell his shares, therefore, runs the risk that at the time he wants to sell, the market price may be much less than the price he would consider to be fair.
Our common stock qualifies as a "penny stock" under SEC rules which may make it more difficult for our stockholders to resell their shares of our common stock.
Our common stock trades on the OTC Bulletin Board. As a result, the holders of our common stock may find it more difficult to obtain accurate quotations concerning the market value of the stock. Stockholders also may experience greater difficulties in attempting to sell the stock than if it were listed on a stock exchange or quoted on the NASDAQ National Market or the NASDAQ Small-Cap Market. Because our common stock does not trade on a stock exchange or on the NASDAQ National Market or the NASDAQ Small-Cap Market, and the market price of the common stock is less than $5.00 per share, the common stock qualifies as a "penny stock." SEC Rule 15g-9 under the Securities Exchange Act of 1934 imposes additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as an "established customer" or an "accredited investor." This includes the requirement that a broker-dealer must make a determination on the appropriateness of investments in penny stocks for the customer and must make special disclosures to the customer concerning the risks of penny stocks. Application of the penny stock rules to our common stock affects the market liquidity of the shares, which in turn may affect the ability of holders of our common stock to resell the stock.
Only a small portion of the investment community will purchase "penny stocks" such as our common stock.
GS Carbon common stock is defined by the SEC as a "penny stock" because it trades at a price less than $5.00 per share. GS Carbon common stock also meets most common definitions of a "penny stock," since it trades for less than $1.00 per share. Many brokerage firms will discourage their customers from purchasing penny stocks, and even more brokerage firms will not recommend a penny stock to their customers. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not consider a purchase of a penny stock due, among other things, to the negative reputation that attends the penny stock market. As a result of this widespread disdain for penny stocks, there will be a limited market for GS Carbon common stock as long as it remains a "penny stock." This situation may limit the liquidity of your shares.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
In addition to historical information, this Quarterly Report contains forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "estimates," "projects," or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled "Business Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.
OVERVIEW
GS Carbon Corporation ("we," "our," "us," "GS Carbon," or the "Company") is a development stage company that was founded to facilitate decarbonization in ways that cost-effectively capitalize on the evolving carbon markets. GS Carbon's ambition is to affect reductions in the carbon intensity of energy consumption by investing in carbon trading, developing and commercializing advanced new decarbonization technologies, and by developing and owning renewable energy production assets.
GS Carbon currently has two operating subsidiaries: General Ultrasonics Corporation ("GUC") and General Carbonics Corporation ("GCC"). GS Carbon also has three investments: Sterling Planet, Inc. ("Sterling"), TerraPass, Inc. ("TerraPass"), and Air Cycle Corporation ("Air Cycle").
Sterling has established a strong reputation as the premier market maker for renewable energy sales. Sterling has sold over 4 billion kilowatt hours of renewable energy since its inception, representing enough energy to power 350,000 homes for a full year and offset 2.6 million tons of carbon dioxide. Sterling Planet currently services an impressive array of clients including Alcoa, The Coca-Cola Company, DuPont, Delphi Corporation, Duke University, University of Utah, Nike, Pitney Bowes, U.S. Environmental Protection Agency, the U.S. General Services Administration, the Homeland Security Department, Western Area Power Administration, New York State Energy Research and Development Authority (NYSERDA), the U.S. Army, Staples, Whirlpool Corporation, the World Resources Institute and over 150 other companies. GS Carbon holds a 10% stake in Sterling.
By issuing a "TerraPass" to its members, TerraPass utilizes its members' contributions to promote global energy efficiency and greenhouse gas reduction through targeted projects. It is through these clean energy projects that TerraPass counterbalances pollution from its members' vehicles. TerraPass recently partnered with Ford Motor Company in a program called "Greener Miles," which allows consumers to calculate the amount of carbon dioxide produced by their car in one year of driving, and then to purchase a TerraPass linked to the cost of producing an amount of clean energy equivalent to the carbon dioxide produced. Individual purchases range from $29.95 to $79.95 annually, depending on the type of vehicle, amount of carbon dioxide emitted and miles traveled, and the funds are used to invest in U.S. based renewable energy projects. GS Carbon holds a 10% stake in TerraPass.
GS Carbon holds a 30% stake in Air Cycle, a lamp, ballast, battery and e-waste recycling company. Air Cycle's Bulb Eater(R) product line crushes spent fluorescent lamps into small fragments and compacts them into 55-gallon containers which are then shipped for recycling. Air Cycle's EasyPak(TM) Recycling Program is offered as an alternative for customers who generate spent lamps, batteries, and/or ballasts and cannot meet Air Cycle's quantity minimums for bulk pick-ups. Small shipments are instead shipped through pre-paid FedEx transportation services.
GS Carbon's GUC subsidiary focuses on the research and development of commercially viable advanced applications of cutting-edge clean technologies. GS Carbon's testing laboratory is currently focused on commercializing new technologies that increase the efficiency and reduce the emissions profile of energy production. Current research and development projects include ultrasonic reformation of carbon-based liquids and gases into clean fuels. GS Carbon's GCC subsidiary focuses on the synthesis and use of novel carbon-based products.
GS Carbon owns 70% of GUC 100% of GCC. GUC owns the exclusive rights to proprietary new ultrasonic reformation process uses water, carbon-based materials and high intensity ultrasonic energies to synthesize clean burning fuels and other materials. GCC owns patent-pending technologies involving carbon aerogel composites.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED MARCH 31, 2007
Revenues
Total revenues were $0 for the three months ended March 31, 2007.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the period ended March 31, 2007 were $356,929 which amount was primarily attributable to the operating activities of our research and development unit, General Ultransonics Corporation.
Interest Expense and Financing Costs
Interest expenses and financing costs for the period ended March 31, 2007 were $180,093 and were primarily attributable to our existing financing agreements with Candent, Cornell Capital Partners, LLP and Highgate House Funds, Ltd.
Net Income
Our net loss for the period ended March 31, 2007 was $4,726,303. The net loss incurred was due to the expenses and other factors described above.
Liquidity and Capital Resources
The Company had $476,484 in accounts payable and accrued expenses at March 31, 2007. GS Carbon intends to satisfy these amounts predominantly out of cash flows from its operations and financing activities. The Company had negative working capital of $3,397,666 at March 31, 2007, of which $2,980,069 related to derivative liabilities created by the conversion features found on the Highgate, Cornell and Candent debentures.
That is the quarterly.
-------------------- Pennies Make Dollars Posts: 8 | From: South Florida | Registered: Jul 2007
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