10-Q 1 mrt_10q.htm mrt_10q.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2009

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to

COMMISSION FILE NUMBER:000-52445

Modern Renewable Technologies, INC.
(Exact name of small business issuer as specified in its charter)
 
Nevada
  
33-1133537
(State or other jurisdiction of incorporation or organization)
  
(IRS Employer Identification No.)
 
 
13520 Oriental St, Rockville, Md 20853
(Address of principal executive offices)
 
202-536-5191
(Registrants telephone number, including area code)
 
4901 NW 17th Way, Suite 505
Ft. Lauderdale, Florida 33309
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [   ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company; as defined within Rule 12b-2 of the Exchange Act.

[   ] Large accelerated filer
[   ] Accelerated filer
[   ] Non-accelerated filer
[X] Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [   ] Yes [X] No

The number of shares outstanding of each of the issuer's classes of common equity as of January 11, 2009: 921,495 shares of the issuers $.001 par value common stock issued and outstanding.

 



 
 
 

MODERN RENEWABLE TECHNOLOGIES, INC.
(A  DEVELOPMENT STAGE COMPANY )
 
Contents
 

 
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2
 


MODERN RENEWABLE TECHNOLOGIES, INC.
 (FORMERLY VAULT TECHNOLGY, INC.)
(A Development Stage Company)
 
BALANCE SHEETS
(unaudited)
 

             
   
November 30,
    
August 31,
  
   
2009
    
2009
  
             
ASSETS
            
             
Current Assets
            
Prepaid expenses
   $ 563     $ 5,000  
                 
TOTAL ASSETS
   $ 563     $ 5,000  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
                
                 
Current Liabilities
                
                 
 
                
Accounts payable and accrued liabilities
   $ 84,790     $ 62,836  
Due to shareholders
     77,502       75,294  
Due to related party’s
     398,001       332,619  
                 
TOTAL LIABILITIES
     560,293       470,749  
                 
Stockholders’ Deficit
                
Preferred Stock, $0.001 par value, 100,000,000 shares authorized
                
None issued
                
Common Stock, 750,000,000 common shares authorized with a par value of $0.001, 921,495 common shares issued and outstanding.
(August 31, 2009  889,352)
     921       889  
Additional paid-in capital
     400,464       393,424  
                 
Deficit accumulated during the development  stage
     (961,114 )     (860,062 )
                 
Total Stockholders’ Deficit
     (559,730 )     (465,749 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
   $ 563     $ 5,000  



See accompanying notes to unaudited financial statements

 
3
 

MODERN RENEWABLE TECHNOLOGIES,INC.
(FORMERLYVAULT TECHNOLOGY,INC.)
(A Development Stage Company)
 
STATEMENTS OF INCOME AND EXPENSES
(unaudited)



         
Period From
April 5, 2002
  
   
For the Three months ended
    
For the Three months ended
    
(Inception) Through
  
   
November 30,
    
November 30,
    
November 30,
  
   
2009
    
2008
    
2009
  
                   
Expenses
                  
General and Administrative
   $ 101,052     $ 43,007     $ 1,353,393  
                         
       Loss from operations
     101,052       43,007       1,353,393  
                         
       Debt forgiveness income
     -       (387,175 )     (399,350 )
                         
NET INCOME  (LOSS)
   $ 101,052     $ 344,168     $ (954,043 )
                         
                         
Net Loss Per Share – Basic and Diluted
   $ (0.11 )   $ 0.43       N/A  
                         
Weighted Average Shares Outstanding – Basic and Diluted
     889,750       800,271       N/A  














See accompanying notes to unaudited financial statements


 
4
 


MODERN RENEWABLE TECHNOLOGIES, INC.
(FORMERLY VAULT TECHNOLOGY, INC.)
(A Development Stage Company)
 
STATEMENTS OF CASH FLOWS
(unaudited)

         
Period From
April 5, 2002
  
   
For THREE MONTHS ENDED
    
(Inception) Through
  
   
November 30, November 30,
    
November 30,
  
   
2009
    
2008
    
2009
  
                   
CASH FLOWS FROM OPERATING ACTIVITIES
                  
                   
Net  income (loss)
   $ (93,981 )   $ 344,168     $ (954,043 )
                         
Adjustments to reconcile net  income (loss) to net
                        
cash used in operating activities
Change in operating assets and liabilities
                        
Debt forgiveness income
     -       (387,175 )     (399,350 )
Stock issued for services
                     318,000  
Increase in prepaid expenses
     4,437       (4,181 )     (563 )
Increase in accounts payable and accrued liabilities
     21,954       19,806       86,765  
NET CASH USED IN OPERATING ACTIVITIES
     (67,590 )     58,632       (949,191 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                        
Shareholder loans, net
     2,208       (8,632 )     105,200  
                         
Finance contracts, net
     -       -       306,648  
Share subscription collected
     -       -       76,313  
       Related party loans, net
     65,382       69,625       378,334  
       Other loans
             (2,361 )     82,696  
                         
NET CASH PROVIDED BY FINANCING ACTIVITIES
     67,590       (58,632 )     949,191  
                         
NET CHANGE IN CASH
     -       -       -  
                         
CASH AT BEGINNING OF PERIOD
     -       -       -  
                         
CASH AT END OF PERIOD
   $ -     $ -     $ -  
NON-CASH FINANCING ACTIVITIES
                        
                         
Reclass from Other loans to Due to Related Party
Reclass from Accruals to Due to Related Party
                     94,671 1,975  
                         
                         
Supplemental Disclosures:
                        
Interest paid
   $ -     $ -     $ -  
Income taxes paid
     -       -       -  
 
See accompanying notes to unaudited financial statements

 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(FORMERLY VAULT TECHNOLOGY, INC.)
(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS


NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Modern Renewable Technologies, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with Modern Renewable Technologies audited 2009 annual financial statements and notes there to contained in Modern Renewable Technologies Annual Report  filed with the SEC on form 10-K. In the opinion of management all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in Modern Renewable Technologies 2009 financial statements have been omitted.


NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that Modern Renewable Technologies  will continue as a going concern. As shown in the accompanying financial statements, Modern Renewable Technologies generated a loss for the three months ended November 30, 2009, and has an accumulated deficit at November 30, 2009. These conditions raise substantial doubt as to Modern Renewable Technologies ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Modern Renewable Technologies is unable to continue as a going concern. Management intends to finance these deficits be selling its common stock.

NOTE 3 – RELATED PARTY TRANSACTIONS

 
1)     
Various loans made to the Company during the three months ended November 30, 2009 from the current President total $67,590 and are subject to interest at 10%. These loans have a term of one year and are unsecured.

NOTE 4 – COMMON STOCK

During this quarter 32,143 shares were recorded as issued at $0.22 each in respect of consulting services provided to the company.


NOTE 5 – SUBSEQUENT EVENTS

The Company evaluated all events or transactions that occurred after November 30, 2009 up through date the Company issued these financial statements.  During this period, the Company did not have any material recognizable subsequent events.





 
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Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

The following information specifies certain forward-looking statements of management of the company. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. We cannot guaranty that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

Critical Accounting Policies and Estimates

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources.

These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in our Quarterly Report on Form 10-Q for the period ended November 30, 2009.

Results of Operations

For the three months ended November 30, 2009, as compared to the three months ended November 30, 2008.

Revenues. We have not earned any revenues to date.

Operating Expenses and Net Loss. Our net loss from operations of $93,981 for the three month period ended November 30, 2009, was solely comprised of general and administrative expenses. By comparison, our net income of $344,168 for the three month period ended November 30, 2008, was comprised of general and administrative expenses and debt forgiveness income. We anticipate our accounting and legal expenses will also increase as a result of our ongoing reporting requirements under the Securities Exchange Act of 1934 and the increased merger and acquisitions activity.
 


 
7
 


Liquidity and Financial Condition

Cash used in operating activities totaled $67,590; cash flows from financing activities were $67,590.

During the nine-month period ending November 30, 2008 cash provided by operating activities totaled $58,632; and cash used by financing activities for the period was $58,632: $60,993 from shareholder loans.

As of November 30, 2009, we had no cash   on hand. Since our inception, we have used our common stock and loans to raise money for our operations and for our property acquisitions. We have not generated any revenues to date and are dependent upon obtaining financing to pursue our plan of operation.

Over the last three months, we have continued to experienced difficulties in raising capital. We believe our inability to raise significant additional capital through equity or debt financings is due to various factors, including, but not limited to, a tightening in the equity and credit markets. As a result, we have funded our operations through loans from our current President and a company related to our current President. As of November 30, 2009, our current President has loaned us a total of $183,208. These loans have a term of one year, bear interest of 10% and are unsecured. During the three months ended November 30, 2009, we also borrowed funds amounting to $67,590 from a company related to our current President.

We anticipate spending approximately $250,000 over the next twelve months in pursuing our plan of operation. We have a working capital deficit of $559,730 and we have not earned any revenues to date and do not anticipate earning revenues until we have completed commercial development of our anticipated products. Accordingly, we will require substantial additional financing in order to fund our plan of operation. We anticipate that any additional financing will likely be in the form of equity financing as substantial debt financing will likely not be as available at this stage of our business.

During 2009, we incurred significant professional costs associated with the audit of our financial statements and our reporting requirements. We expect that the legal and accounting costs of being a public company will continue to impact our liquidity and we may need to obtain funds to pay those expenses. Other than the anticipated increases in legal and accounting costs due to the reporting requirements of being a public company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.


 


 
8
 

Plan of Operations

Modern Renewable Technologies, Inc. is a full service audio visual integration firm that serves the education, government and commercial marketplace. We provide multimedia consulting, complete classroom, boardroom, and conference room design and installation of audiovisual products and sound system design and installation. In addition to its complex product offering, MRT provides training, service and on-going customer support. As part of our new business focus, we have also begun exploring other opportunities in the products and services arena related to audiovisual systems integration, home theater systems and digital media. We have also deployed additional resources into the acquisition of operating entities that deliver products and services related to audiovisual systems integration, home theater systems and digital media. We have not earned any revenues to date.
 
As at November 30, 2009, we had no cash on hand. As such, we currently do not have sufficient financial resources to meet the anticipated costs of pursuing our new business focus, or the anticipated administrative costs of operating our business for the next twelve months. Our forecast for the period for which our financial resources will be adequate to support our operations involves risks and uncertainties and actual results could fail as a result of a number of factors. We intend to pursue capital through public or private financing and other sources, such as our officers, director and principal shareholders. We cannot
 
Modern Renewable Technologies, Inc. guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, we hope that our officers, directors and principal shareholders will contribute funds to pay for our expenses to achieve our objectives over the next twelve months. However, we cannot guarantee that our officers, directors and principal shareholders will continue to contribute funds to pay for our expenses.
 
On July 10, 2009 we signed a renewed non-binding Memorandum of Understanding to enter into an exclusive licensing and distribution agreement with EcoBlu Products, Inc. to distribute their Ecoblu line of green building products in the Caribbean, Central and South American markets.
 
Upon closing of an agreement to acquire the license we would have become the exclusive distributor of proprietary wood products coated with a non-toxic eco-friendly chemistry that protects against mold, rot-decay, termites and value added fire for the Caribbean, Central and South American markets. In anticipation of acquiring the license we changed the Company’s name to “Modern Renewable Technologies, Inc.” and completed a one (1) share for every seventy (70) share stock reverse split of the Company’s issued and outstanding shares. The non-binding Memorandum of Understanding has expired by its terms. Although we were not able to complete a final agreement with EcoBlu Products, we believe the changes better position us for new business opportunities and the responsible reorganization of our capital structure improved improve our ability to raise additional funding to pursue potential business opportunities in the growing environmentally “Green” products industry.
 
Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

 


 
9
 


Item 3 - Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4T - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” pursuant to Exchange Act Rule 15d-15(b). Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, our principal executive officer concluded that our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act) were not effective due to material adjustments related to non cash stock based transactions for consulting.

Changes in Internal Controls

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting in connection with the evaluation required by Rule 15d-15(d) under the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.



 

 
10
 


Part II OTHER INFORMATION

Item 1.  Legal Proceedings

On October 21, 2009 an eviction notice was processed in Broward County, Florida related to our Ft. Lauderdale offices. The action seeks to relieve us of possession for failure to make timely payment as provided in the lease agreement. The amount due as of October 1, 2009 was $2,651. We have vacated the premises and are presently having mail forwarded to our President until we can establish another business address.

No other legal proceedings were initiated or served upon the Company in the period ending November 30, 2009.

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

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

None, for the period ending November 30, 2009

Item 3.  Defaults Upon Senior Securities

None, for the period ending November 30, 2009

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

On December 18th, 2009 a Shareholder’s meeting was held, at which meeting a valid quorum of common shares voted that Randy White would remain as the only Director of the company and David Price nominated as Secretary of the company. Mr. White and Mr. Price accepted the nomination and now stand as Director and Secretary of the company.

Item 5.  Other Information

The company has changed its address and phone number to 13520 Oriental St, Rockville, Md 20853,
202-536-5191. The Secretary is providing this office free of charge.

Item 6.  Exhibits and Reports

Exhibits

Modern Renewable Technologies, Inc. includes herewith the following exhibits:

31.1  
Certification of Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a)/15(d)-14(a))
 
32.1
Certification of Principal Executive Officer and Principal Financial Officer (18 U.S.C. 1350)

 


 
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In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


       
   MODERN RENEWABLE TECHNOLOGIES, INC.

Date: January 14, 2010
  
By:
  
/s/ Randy White
       
   Randy White
       
   President, Director
       
   Principal Executive Officer
 
Date: January 14, 2010
  
By:
  
/s/ Randy White
       
   Randy White
       
   Chief Financial Officer
       
   Treasurer, Director
       
   Principal Financial Officer


 
 
 
 
 
 
 
 
 
 

 


 
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