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 May 31, 2010

[   ] 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)
 
  ______________
(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  June 29, 2010, 2010: 921,495 shares of the issuers $.001 par value common stock issued and outstanding.





 
 
 

MODERN RENEWABLE TECHNOLOGIES, INC.
(A  DEVELOPMENT STAGE C OMPANY )
 
Contents
         
         
       
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Number
         
     
         
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PART I.  FINANCIAL INFORMATION
 
Item 1.  Financial Information
MODERN RENEWABLE TECHNOLOGIES, INC.
(FORMERLY VAULT TECHNOLOGY, INC.)
 (A Development Stage Company)
BALANCE SHEETS
(Unaudited)



             
   
May 31,
    
August 31,
  
   
2010
    
2009
  
             
ASSETS
            
             
Current Assets
            
             
Prepaid expenses
   $ 784     $ 5,000  
                 
                 
TOTAL ASSETS
   $ 784     $ 5,000  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
                
                 
Current Liabilities
                
                 
                 
Accounts payable and accrued liabilities
   $ 53,575     $ 32,836  
Due to shareholders
     99,171       75,294  
Due to related party
     -       332,619  
Other loans
     398,001       -  
                 
                 
TOTAL LIABILITIES
     550,747       440,749  
                 
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 and 889,352 common shares issued and outstanding as of May 31, 2010 and August  31, 2009 respectively
     921       889  
Additional paid-in capital
     400,464       393,424  
Deficit accumulated during the development stage
     (951,348 )     (830,062 )
                 
Total Stockholders’ Deficit
     (549,963 )     (435,749 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
   $ 784     $ 5,000  





See accompanying notes to the unaudited financial statements

 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(FORMERLY VAULT TECHNOLOGY, INC.)
(A Development Stage Company)
STATEMENT OF EXPENSES
(Unaudited)
 
 
               
Period from
April 5,
2002
  
   
THREE MONTHS ENDED
    
NINE MONTHS ENDED
    
(Inception) to
  
   
MAY 31
    
MAY 31
    
May 31
  
   
2010
    
2009
    
2010
    
2009
    
2010
  
                               
Expenses
                              
General and administrative
   $ 33,973     $ 337,427     $ 96,037     $ 539,164     $ 1,277,725  
                                         
       Loss from operations
     (33,973 )     (337,427 )     (96,037 )     (539,164 )     (1,277,725 )
       Bank charges and interest
     (8,512 )     (2,954 )     (25,249 )     (6,122 )     (72,973 )
      Debt forgiveness income
     -       -       -       399,350       399,350  
Net Loss
   $ (42,485 )   $ (340,381 )   $ (121,286 )   $ 145,936     $ (951,348 )
                                         
                                         
Net Earnings Per Common Share- Basic and Diluted
   $ (0.05 )   $ (0.38 )   $ (0.13 )   $ (0.17 )     N/A  
                                         
                                         
Weighted Average Common  Shares Outstanding-Basic and Diluted
     921,495       889,353       910,898       850,177       N/A  










See accompanying notes to the unaudited financial statements

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


         
From
April 5, 2002
  
   
FOR NINE MONTHS ENDED
    
(Inception) Through
  
   
May 31,
    
May 31,
    
May 31,
  
   
2010
    
2009
    
2010
  
                   
CASH FLOWS FROM OPERATING ACTIVITIES
                  
                   
Net  income (loss)
   $ (121,286 )   $ (145,936 )   $ (951,348 )
                         
Adjustments to reconcile net  income (loss) to net
                        
cash used in operating activities
Change in operating assets and liabilities
                        
Stock issued for services
     7,072       318,000       325,072  
Debt forgiveness income
     -       (399,350 )     (399,350 )
(Increase) decrease in prepaid expenses
     4,216       (641 )     (784 )
Increase (decrease) in accounts payable and accrued liabilities
     20,739       (5,333 )     55,550  
NET CASH USED IN OPERATING ACTIVITIES
     (89,259 )     (233,260 )     (970,860 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                        
Shareholder loans, net
     23,877       (1,493 )     126,869  
Finance contracts, net
     -       2,600       306,648  
Share subscription collected
     -       -       76,313  
       Related party loans, net
     -       224,097       312,952  
       Other loans
     65,382       12,953       148,078  
                         
NET CASH PROVIDED BY FINANCING ACTIVITIES
     89,259       238,157       970,860  
                         
NET CHANGE IN CASH
     -       4,897       -  
                         
CASH AT BEGINNING OF PERIOD
     -       -       -  
                         
CASH AT END OF PERIOD
   $ -     $ 4,897     $ -  
                         
Supplemental Disclosures:
                        
Interest paid
   $ -     $ -     $ -  
Income taxes paid
   $ -     $ -     $ -  

NON-CASH OPERATING AND FINANCING ACTIVITIES
                  
Reclass from Other Loans to Related Party
   $ -     $ -     $ 94,671  
Reclass from Accruals to Due to Related Party
   $ -     $ -     $ 1,975  
Reclass from Due to Related Party to Other Loans
   $ 332,619     $ -     $ 332,619  


See accompanying notes to the unaudited financial statements

 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(FORMERLY VAULT TECHNOLOGY, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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 bee prepared assuming that Modern Renewable Technologies will continue as a going concern. As shown in the accompanying financial statements, Modern Renewable Technologies has an accumulated deficit, negative working capital and negative cash flow from operations since inception. 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

During the nine month period ended May 31, 2010, the current President and majority shareholder advanced funds totaling $23,877 to the Company. The balance at May 31, 2010 is $99,171 bears no interest, is unsecured and is due on demand.

NOTE 4 – OTHER LOANS

All other advances from the former management of the Company, including advances from a Company related to the former president have been reclassified to other loans. These parties loaned the Company $65,382 during this fiscal year and $332,619 in prior year. Related party loans were reclassified to other loans as of February 28, 2010. The balance as of May 31, 2010 is $398,001. These loans are due on demand, unsecured and bear interest ranging from 0% to 10% per annum.

NOTE 5 – COMMON STOCK
 
During the nine months period, 32,143 shares were recorded as issued at $0.22 each in respect of consulting services provided to the Company.

NOTE 6 – PRIOR YEAR REVISIONS

In the quarter ended May 31, 2010 an adjustment has been made related to the accounts payable of the prior year in the amount of $30,000 for legal fees which should not have been accrued for. Management has deemed this not material to the results of the prior year and has elected not to revise the prior year financial statements.


 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY VAULT TECHNOLOGY, INC.)


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 May 31, 2010.

Results of Operations

For the three months ended May 31, 2010, as compared to the three months ended May 31, 2009.

Revenues. We have not earned any revenues to date.

Operating Expenses and Net Loss. Our net loss of $42,485 for the three month period ended May 31, 2010, was solely comprised of general and administrative expenses and interest associated with our loans payable. By comparison, our net loss of $340,381 for the three month period ended May 31, 2009, was comprised of general and administrative expenses. 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.








 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY VAULT TECHNOLOGY, INC.)


Liquidity and Financial Condition
 
During the six-month period ending May 31, 2010 cash provided by operating activities totaled $89, 259; and cash provided by financing activities for the period was $89,259: $23,877 from shareholder loans.

As of May 31, 2010, 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 and prior Presidents.

We anticipate spending approximately $100,000 over the next twelve months in pursuing our plan of operation. We have a working capital deficit of $549,963 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 and 2010, 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
 


MODERN RENEWABLE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY VAULT TECHNOLOGY, INC.)


Plan of Operations

Modern Renewable Technologies, Inc. is a company currently seeking opportunities in the green building products industry.

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. While we have since decided against moving forward with EcoBlu Products, we intend to continue to pursue potential business opportunities in this growing sector. There is a steady stream of new ideas, products and technologies in the green building products industry in which Modern Renewable Technologies would like to partake in. We will continue to focus on the green building products industry.

We intend to target green building product manufactures that have innovative green building products which will be first to market. We hope to avoid the competitive green building products that are dominated by our competition.  Our positioning strategy is first to come to an agreement with an innovative product new to market which will capture an audience keen on environmentally responsible energy efficient building. In order to obtain exclusivity, we hope to obtain the sole contractual rights to distribute a line of green building products.

We must first collect marketing data and secure distribution contracts. Our President, Randy White, will lead the effort to secure distribution contracts necessary to begin sales and generating revenues. During the next year, it is expected that Mr. White will focus upon negotiating green building products manufacturers into distribution agreements. Upon completion of these goals, it is expected that he will change focus from securing products for distribution to generating sales. We hope to receive revenue through the distribution of building products once we have completed an agreement with a green building product manufacturer. We have not generated any revenues to date. We are strictly a service-oriented company, with no bricks-and-mortar features other than the corporate office.

Because the Company is still developing its current strategy, the Company’s operating expenses will largely consist of professional fees. For the fiscal year 2010, we anticipate there will be no revenue generated and therefore the Company will operate at a loss. If the Company is able to become a distributor of green building products, funding will be necessary to fulfill any contractual obligations we may enter into.
 
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.






 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY VAULT TECHNOLOGY, INC.)


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 adjustments.

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.








 
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MODERN RENEWABLE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY VAULT TECHNOLOGY, INC.)




PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

No legal proceedings were initiated or served upon the Company in the period ending May 31, 2010.

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 May 31, 2010

Item 3.  Defaults Upon Senior Securities

None, for the period ending May 31, 2010

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

None for the period ending May 31, 2010.

Item 5.  Other Information

None for the period ending May 31, 2010.

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 Section 13 or 15(d) 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.
Registrant
 
Date: July 1, 2010 
  
       By: 
  
\s\ Randy White, President
       
Randy White, President 
       
Principal Executive Officer 
 
Date: July 1, 2010 
  
       By: 
  
\s\ Randy White
       
Randy White, Treasurer, 
       
Controller, Principal Financial Officer 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: July 1, 2010 
  
By: 
  
\s\ Randy White, President
       
Randy White, President and Director 
       
Principal Executive Officer 
 
Date: July 1, 2010 
  
By: 
  
\s\ Randy White
       
Randy White, Treasurer,
       
Controller, Principal Financial Officer 




























 
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