COMMITMENTS AND CONTRACTUAL OBLIGATIONS

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 9. COMMITMENTS AND CONTRACTUAL OBLIGATIONS

a) Strategic Business and Legal Services Agreement

On April 25, 2011 the Company entered into an agreement with NBN Enterprises, Inc. (“NBN”), through to May 1, 2013, whereby NBN provides strategic business services to the Company and pays the cost of outside legal counsel who will advise the Company on securities, corporate and contract matters. The agreement provides for compensation to NBN in the form of issuance of restricted Company common stock equal to 5% of outstanding shares, with anti-dilution protection through the issuance of additional shares through the term and for the succeeding 12 months, and a non-accountable expense allowance of $3,500 per month. During the first quarter of 2012, the Company incurred legal expenses of $10,500 under this agreement and remains obligated to issue 1,065,226 shares of common stock pursuant to the original terms of the agreement..

b) Line of Credit

On July 9, 2011, the Company established a revolving line of credit bearing interest at 15% per annum, with Charles R. Cronin, a director of the Company, (the “Lender”), with advances to be requested in writing by Company on dates and in amounts up to the credit limit, and in the case of each advance, to be made only upon approval the Lender. On September 11, 2011 and October 5, 2011, the Board of Directors of the Company approved and the Company executed approvals of credit limit amendments to increase the Company’s outstanding line of credit to $300,000.

On March 31, 2012, and December 31, 2011 the Company owed the Lender $106,537 and $89,584, respectively. During the first quarter of 2012, the Company recorded interest expense of $16,953 and $15,210, respectively, related to the line of credit.

c) Consulting Agreement – Key Services, Inc.

On July 9, 2011, the Company executed a consulting agreement with Key Services, Inc. (“Key”), whereby Key will locate and assist in the Company’s development and construction of an energy campus project to be undertaken by the Company in the future. The Consulting Agreement is non-exclusive and runs for a period of five years. As consideration, the Company has agreed to pay compensation to Key in the form of cash in an amount equal to $20,000 per month or at the Company’s option (if funds are not available), restricted shares of the Company’s common stock, valued at the average closing price of Company’s common stock over the preceding 20 trading days. In addition, Key is entitled to additional fees, including but not limited to, joint venture, partnership, consulting, developer, contractor and/or project management fees, to be negotiated separately, and agreed to in writing on a project-by-project basis.

On March 31, 2012 and December 31, 2011, the Company owed Key $46,863 and $46,863, respectively. During the first quarter of 2012, the Company recorded consulting expenses of $60,000 and paid Key $60,000 related to this agreement.

d) Consulting Agreement – TMDS, LLC

On July 9, 2011, as amended December 30, 2011, Company executed a consulting agreement with TMDS, LLC (“TMDS”), whereby TMDS will locate and assist in the Company’s development and construction of energy campus projects to be undertaken by the Company in the future. The consulting agreement is non-exclusive and runs for a period of five years. As consideration, the Company has agreed to pay compensation to TMDS in the form of one or more Warrants for the purchase of 1,000,000 shares of restricted common stock of the Company every 90 days, exercisable at $0.0001 per share, with an exercise term of five (5) years from the date of each issuance. In addition, TMDS is entitled to additional fees, including but not limited to, joint venture, partnership, consulting, developer, contractor and/or project management fees, to be negotiated separately, and agreed to in writing on a project-by-project basis.

During the first quarter of 2012, the Company issued a Warrant for a total of 1,000,000 Shares with a value of $70,000 to TMDS under this agreement. (See Note 8.)

e) Consulting Agreement – Investor and Broker Dealer Relations and Financing Alternatives

On March 14, 2012, the Company executed a consulting agreement with Undiscovered Equities, Inc. (“UEI”), pursuant to which UEI has agreed to provide various consulting services, including retention and supervision of various public relations services and investor relations services, strategic business planning, broker dealer relations, financing alternatives and sources, and due diligence meetings for the investor community. The agreement has a 6 month term, but may be terminated early after 60 days, and provides for the Company to pay consulting fees as follows: (i) the sum of $25,000 per month over the term of the agreement (the “Cash Payments”) and (ii) a signing bonus in the form of immediate issuance of 125,000 shares of the Company’s restricted Common stock (the “Stock Payments”), which was issued March 19, 2012. On May 3, 2012, the Company and UEI executed a letter of execution (the “Letter of Extension”) of the consulting agreement to extend the payment terms of Cash Payments and Stock Payments from the May 7, 2012 to June 15, 2012. The shares will be issued on the revised payment date.

f) Stock Purchase Agreement – C.C. Crawford Retreading Company, Inc.

On March 20, 2011, the Company, through its wholly owned subsidiary, DEDC, entered into a stock purchase agreement (the “Stock Purchase Agreement”) with C.C. Crawford Tire Company, Inc. (the “Seller”), pursuant to which DEDC agreed to acquire 100% of the issued and outstanding common shares of C.C. Crawford Retreading Company, Inc., a Texas corporation (“CTR”), for an aggregate purchase price of $600,000 in cash, due and payable upon the date of closing, on or before April 20, 2012, subject to the completion of certain closing conditions precedent, to be performed by both the Seller and DEDC.

As of the date of this filing, the closing had not commenced due to certain outstanding closing conditions of executed Stock Purchase Agreement. Both parties continue to work closely together to complete these outstanding closing conditions, but there is no guarantee the parties will be able to come to agreement on such items. However, the Company anticipates that the parties will complete the transaction within the second quarter 2012.

Management projects that CTR will have on its books (unaudited) on the date of closing approximately $838,000 in assets, approximately $418,000 in liabilities, and approximately $420,000 in equity. As part of the agreement, DED and DEAC agree to assume and immediately cause to be paid off approximately $350,000 of the CTR liabilities immediately after the closing.

It is a condition of closing that DED provide either a funding commitment for $1,000,000 or proof of $1,000,000 in cash in its accounts, which funds will be needed to close the transaction and provide working capital to CTR after the closing. Neither DED nor DEAC have sufficient funds to meet this condition at this date, and as a result, closing of the acquisition transaction remains contingent on DEAC’s raising of $1,000,000 in capital by the closing date. Whether such capital can be obtained, or obtained on commercially reasonable terms, remains uncertain at this date. If such funds cannot be obtained on a timely basis, then the transaction will not proceed.

The agreement contains customary warranties and representations and indemnification and confidentiality provisions, as well as a three-year non-compete by the selling shareholders and their affiliates. Either party may terminate the Agreement if it has not closed by April 20, 2012, without penalty.

DEAC is still conducting its due diligence investigation of CTR and its business at this time, prior to close. CTR collects and recycles approximately 4 million pounds of waste tires annually. The assets of the CTR entity include the ownership of the 10-acre site and 35,000 square feet of buildings that management believes could provide the basis for a future waste tire pyrolysis energy campus. During its last fiscal year ended September 30, 2011, CTR reported (unaudited) $1,231,000 in revenues, and net income before tax of $138,000.

g) Non-binding Term Sheet – R.F.B., LLC

On March 31, 2012, DEDC entered into a non-binding term sheet with R.F.B., LLC (“RFB”), pursuant to which RFB agreed to license and assign to DEDC a Non-Provisional Patent Application (the “Application”), for a confidential aggregate purchase price to be paid in the form of the issuance of shares of the Company’s restricted common stock, contingent upon preparation and execution of a definitive agreement covering the transaction, and the completion of certain other closing conditions to be performed by both RFB and DEDC.

The definitive agreement was to be executed on or before April 30, 2012, with a subsequent date of closing, to be mutually agreed to by RFB and DEDC. As of the date of this filing, the parties have not executed a definitive agreement and there is no guarantee that such definitive agreement will be executed. However, the Company anticipates that the parties will complete the transaction within the second quarter 2012.

Pursuant to the term sheet, RFB will assign and grant to DEDC, an exclusive, worldwide license and right in and to RFB’s catalyst(s) and reactor technology relating to the recovery of high value organics from the processing of scrap tires (the “RFB Technology”). RFB consents that DEDC may utilize the RFB Technology in (a) the development and manufacture of goods and products; and (b) the design, construction and modification of plants (new and existing). Further, RFB will allow DEDC to sell to third parties (i) goods and products produced by utilization of RFB Technology; and (ii) plants utilizing RFB Technology.

As additional consideration, RFB will also receive a revenue share of the high-value organic compounds produced by DEDC and/or its assigns, utilizing the RFB catalysts(s) and reactor technology; and (b) a percentage of the net profits realized from the recovery of energy products recovered from oil sands or tar sands. The anticipated term of the license will be the greater of (i) 25 years and (ii) 20 years from the notice of allowance relative to the Application. The specific compensation terms of the license are based on trade secrets that are considered confidential and therefore are not being released.