x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
OR
|
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Commission file number 0-12627
|
DELAWARE
|
87-0407858
|
State or other jurisdiction of incorporation
|
(IRS Employer Identification No.)
|
Large accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Accelerated Filer
|
o
|
Smaller reporting company
|
x
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 656,084 | $ | 941,579 | ||||
Accounts receivable
|
9,134 | 2,100 | ||||||
Inventory
|
426,205 | 1,564 | ||||||
Other current assets
|
185,648 | 298,586 | ||||||
Total Current Assets
|
1,277,071 | 1,243,829 | ||||||
PROPERTY AND EQUIPMENT, NET
|
15,511,205 | 14,559,002 | ||||||
INVESTMENT HELD FOR SALE
|
- | 288,536 | ||||||
DEFERRED GROWING COST
|
3,392,992 | 3,378,990 | ||||||
INTANGIBLE ASSETS, NET
|
3,820,105 | - | ||||||
OTHER NONCURRENT ASSETS
|
11,404 | 11,372 | ||||||
TOTAL ASSETS
|
$ | 24,012,777 | $ | 19,481,729 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable and accrued expenses
|
$ | 3,600,812 | $ | 1,135,594 | ||||
Accrued payroll and payroll taxes
|
1,137,382 | 1,018,894 | ||||||
Capital lease liability - current portion
|
17,057 | 42,829 | ||||||
Notes payable - current portion
|
49,358 | 60,800 | ||||||
Convertible notes payable
|
567,000 | 567,000 | ||||||
Total Current Liabilities
|
5,371,609 | 2,825,117 | ||||||
LONG-TERM LIABILITIES
|
||||||||
Accrued interest payable
|
2,569,518 | 2,121,787 | ||||||
Accrued return on noncontrolling interest
|
6,183,907 | 4,963,582 | ||||||
Notes payable - long term portion
|
1,341,642 | 40,200 | ||||||
Mortgage notes payable
|
5,110,189 | 5,110,189 | ||||||
Total Long Term Liabilities
|
15,205,256 | 12,235,758 | ||||||
STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Preferred stock - $0.001 par value; 50,000,000 shares authorized
|
||||||||
Series B, convertible; 13,000 shares issued (aggregate liquidation
|
||||||||
preference of $1,300,000)
|
13 | 13 | ||||||
Common stock, $0.001 par value; 500,000,000 shares authorized;
|
||||||||
333,683,502 and 293,683,502 issued and outstanding
|
333,683 | 293,683 | ||||||
Additional paid-in capital
|
25,552,579 | 24,588,022 | ||||||
Accumulated deficit
|
(27,574,888 | ) | (26,599,007 | ) | ||||
Accumulated other comprehensive loss
|
(14,762 | ) | (56,121 | ) | ||||
Total Global Clean Energy Holdings, Inc. Stockholders' Deficit
|
(1,703,375 | ) | (1,773,410 | ) | ||||
Noncontrolling interests
|
5,139,287 | 6,194,264 | ||||||
Total equity (deficit)
|
3,435,912 | 4,420,854 | ||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$ | 24,012,777 | $ | 19,481,729 | ||||
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Revenue
|
$ | 15,460 | $ | 55,501 | $ | 103,940 | $ | 209,436 | ||||||||
Subsidy Income
|
33,368 | - | 50,515 | 465,586 | ||||||||||||
Total Revenue
|
48,828 | 55,501 | 154,455 | 675,022 | ||||||||||||
Operating Expenses
|
||||||||||||||||
General and administrative
|
681,024 | 624,910 | 1,241,163 | 1,252,377 | ||||||||||||
Plantation operating costs
|
47,677 | 198,460 | 617,833 | 351,244 | ||||||||||||
Total Operating Expenses
|
728,701 | 823,370 | 1,858,996 | 1,603,621 | ||||||||||||
Loss from Operations
|
(679,873 | ) | (767,869 | ) | (1,704,541 | ) | (928,599 | ) | ||||||||
Other Income (Expenses)
|
||||||||||||||||
Other income
|
4 | 48 | 23 | 57 | ||||||||||||
Interest expense
|
(241,651 | ) | (215,327 | ) | (458,406 | ) | (408,127 | ) | ||||||||
Gain on settlement of liabilities
|
- | - | - | 514,473 | ||||||||||||
Loss on Sale of Investment held for sale
|
(178,896 | ) | - | (178,896 | ) | - | ||||||||||
Foreign currency transaction gain (loss)
|
- | (1,044 | ) | 515 | (1,044 | ) | ||||||||||
Net Other Income (Expenses)
|
(420,543 | ) | (216,323 | ) | (636,764 | ) | 105,359 | |||||||||
Loss from Continuing Operations
|
(1,100,416 | ) | (984,192 | ) | (2,341,305 | ) | (823,240 | ) | ||||||||
Gain (Loss) from Discontinued Operations
|
- | 340 | - | (1,698 | ) | |||||||||||
Net Loss
|
(1,100,416 | ) | (983,852 | ) | (2,341,305 | ) | (824,938 | ) | ||||||||
Less Net Loss Attributable to the Noncontrolling Interest
|
(362,538 | ) | (580,969 | ) | (1,365,424 | ) | (781,019 | ) | ||||||||
Net Loss Attributable to Global Clean Energy Holdings, Inc.
|
$ | (737,878 | ) | $ | (402,883 | ) | $ | (975,881 | ) | $ | (43,919 | ) | ||||
Amounts attributable to Global Clean Energy
|
||||||||||||||||
Holdings, Inc. common shareholders:
|
||||||||||||||||
Loss from Continuing Operations
|
$ | (737,878 | ) | $ | (403,223 | ) | $ | (975,881 | ) | $ | (42,221 | ) | ||||
Income (Loss) from Discontinued Operations
|
- | 340 | - | (1,698 | ) | |||||||||||
Net Loss
|
$ | (737,878 | ) | $ | (402,883 | ) | $ | (975,881 | ) | $ | (43,919 | ) | ||||
Basic Income (Loss) per Common Share:
|
||||||||||||||||
Loss from Continuing Operations
|
$ | (0.0022 | ) | $ | (0.0014 | ) | $ | (0.0032 | ) | $ | (0.0001 | ) | ||||
Loss from Discontinued Operations
|
- | - | - | - | ||||||||||||
Net Loss per Common Share
|
$ | (0.0022 | ) | $ | (0.0014 | ) | $ | (0.0032 | ) | $ | (0.0001 | ) | ||||
Basic Weighted-Average Common Shares Outstanding
|
333,683,502 | 293,304,571 | 301,683,502 | 289,183,691 | ||||||||||||
Diluted Income (Loss) per Common Share:
|
||||||||||||||||
Income (Loss) from Continuing Operations
|
$ | (0.0022 | ) | $ | (0.0014 | ) | $ | (0.0032 | ) | $ | 0.0001 | |||||
Loss from Discontinued Operations
|
- | 0.0000 | - | - | ||||||||||||
Net Income (Loss) per Common Share
|
$ | (0.0022 | ) | $ | (0.0014 | ) | $ | (0.0032 | ) | $ | 0.0001 | |||||
Diluted Weighted-Average Common Shares Outstanding
|
333,683,502 | 293,304,571 | 301,683,502 | 289,183,691 | ||||||||||||
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements
|
GLOBAL CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net Loss
|
$ | (1,100,416 | ) | $ | (983,852 | ) | $ | (2,341,305 | ) | $ | (824,938 | ) | ||||
Other comprehensive income (loss)- foreign currency
|
||||||||||||||||
translation adjustment
|
(626,484 | ) | 1,125,032 | 262,100 | 73,490 | |||||||||||
Comprehensive Income (Loss)
|
(1,726,900 | ) | 141,180 | (2,079,205 | ) | (751,448 | ) | |||||||||
Add net loss attributable to the noncontrolling interest
|
362,538 | 580,969 | 1,365,424 | 781,019 | ||||||||||||
Add other comprehensive loss (less income) attributable to noncontrolling interest
|
658,269 | (1,112,584 | ) | (220,741 | ) | (68,848 | ) | |||||||||
Comprehensive Loss Attributable to
|
||||||||||||||||
Global Clean Energy Holdings, Inc.
|
$ | (706,093 | ) | $ | (390,435 | ) | $ | (934,521 | ) | $ | (39,277 | ) | ||||
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements
|
GLOBAL CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
|
||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
For the six Months Ended June 30, 2012 and 2013
|
||||||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||||||
Additional
|
Other
|
Non-
|
||||||||||||||||||||||||||||||||||
Series B
|
Common stock
|
Paid in
|
Accumulated
|
Comprehensive
|
controlling
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Loss
|
Interests
|
Total
|
||||||||||||||||||||||||||||
Balance at December 31, 2011
|
13,000 | $ | 13 | 285,062,812 | $ | 285,062 | $ | 24,260,628 | $ | (26,662,294 | ) | $ | (21,996 | ) | $ | 5,099,547 | $ | 2,960,960 | ||||||||||||||||||
Contributions from noncontrolling interests
|
- | - | - | - | - | - | - | 3,258,090 | 3,258,090 | |||||||||||||||||||||||||||
Issuance of common stock for cash
|
- | - | 8,620,690 | 8,621 | 241,379 | - | - | - | 250,000 | |||||||||||||||||||||||||||
Share-based compensation from
|
||||||||||||||||||||||||||||||||||||
issuance of options and compensation-based warrants
|
- | - | - | - | 53,850 | - | - | - | 53,850 | |||||||||||||||||||||||||||
Accrual of preferential return for the noncontrolling interests
|
- | - | - | - | - | - | - | (947,501 | ) | (947,501 | ) | |||||||||||||||||||||||||
Foreign currency translation gain (loss)
|
- | - | - | - | - | - | 4,642 | 68,848 | 73,490 | |||||||||||||||||||||||||||
Net Income (loss) for the six months ended June 30, 2012
|
- | - | - | - | - | (43,919 | ) | - | (781,019 | ) | (824,938 | ) | ||||||||||||||||||||||||
Balance for the six months ended June 30, 2012
|
13,000 | $ | 13 | 293,683,502 | $ | 293,683 | $ | 24,555,857 | $ | (26,706,213 | ) | $ | (17,354 | ) | $ | 6,697,965 | $ | 4,823,951 | ||||||||||||||||||
Balance at December 31, 2012
|
13,000 | $ | 13 | 293,683,502 | $ | 293,683 | $ | 24,588,022 | $ | (26,599,007 | ) | $ | (56,121 | ) | $ | 6,194,264 | $ | 4,420,854 | ||||||||||||||||||
Contributions from noncontrolling interests
|
- | - | - | - | - | - | - | 1,310,030 | 1,310,030 | |||||||||||||||||||||||||||
Issuance of common stock
|
- | - | 40,000,000 | 40,000 | 760,000 | - | - | - | 800,000 | |||||||||||||||||||||||||||
Share-based compensation from
|
||||||||||||||||||||||||||||||||||||
issuance of options and compensation-based warrants
|
- | - | - | - | 204,557 | - | - | - | 204,557 | |||||||||||||||||||||||||||
Accrual of preferential return for the noncontrolling interests
|
- | - | - | - | - | - | - | (1,220,324 | ) | (1,220,324 | ) | |||||||||||||||||||||||||
Foreign currency translation gain (loss)
|
- | - | - | - | - | - | 41,359 | 220,741 | 262,100 | |||||||||||||||||||||||||||
Net Income (loss) for the six months ended June 30, 2013
|
- | - | - | - | - | (975,881 | ) | - | (1,365,424 | ) | (2,341,305 | ) | ||||||||||||||||||||||||
Balance for the six months ended June 30, 2013
|
13,000 | $ | 13 | 333,683,502 | $ | 333,683 | $ | 25,552,579 | $ | (27,574,888 | ) | $ | (14,762 | ) | $ | 5,139,287 | $ | 3,435,912 | ||||||||||||||||||
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
For the six months ended
|
||||||||
June 30,
|
||||||||
2013
|
2012
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net loss
|
$ | (2,341,305 | ) | $ | (824,938 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Foreign currency transaction gain
|
(515 | ) | 1,044 | |||||
Gain on settlement of liabilities
|
- | (514,473 | ) | |||||
Share-based compensation
|
204,557 | 53,850 | ||||||
Write down of deferred growing cost
|
6,656 | - | ||||||
Write down of long lived assets
|
15,000 | - | ||||||
Loss on sale of investment held for sale
|
178,896 | - | ||||||
Depreciation and amortization
|
227,081 | 134,393 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(3,000 | ) | (68,712 | ) | ||||
Inventory
|
5,503 | (30,737 | ) | |||||
Other current assets
|
48,096 | (76,473 | ) | |||||
Deferred growing costs
|
- | (810,819 | ) | |||||
Accounts payable and accrued expenses
|
571,765 | 432,536 | ||||||
Deferred revenue
|
- | (152,732 | ) | |||||
Other noncurrent assets
|
6,627 | (3,324 | ) | |||||
Net Cash Used in Operating Activities
|
(1,080,639 | ) | (1,860,384 | ) | ||||
Cash Flows From Investing Activities
|
||||||||
Plantation development costs
|
(789,435 | ) | (1,042,200 | ) | ||||
Purchase of property and equipment
|
(3,118 | ) | (217,824 | ) | ||||
Proceeds from sale of property and equipment
|
187,212 | - | ||||||
Net Cash Used in Investing Activities
|
(605,341 | ) | (1,260,024 | ) | ||||
Cash Flows From Financing Activities
|
||||||||
Proceeds from issuance of common stock
|
- | 250,000 | ||||||
Proceeds from issuance of preferred membership in GCE Mexico I, LLC
|
1,310,030 | 3,258,090 | ||||||
Payments on capital leases and notes payable
|
(31,937 | ) | (23,229 | ) | ||||
Net Cash Provided by Financing Activities
|
1,278,093 | 3,484,861 | ||||||
Effect of exchange rate changes on cash
|
122,392 | (80,630 | ) | |||||
Net change in Cash and Cash Equivalents
|
(285,495 | ) | 283,823 | |||||
Cash and Cash Equivalents at Beginning of Period
|
941,579 | 676,780 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 656,084 | $ | 960,603 | ||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash paid for interest
|
$ | 1,282 | $ | 30,764 | ||||
Noncash Investing and Financing activities:
|
||||||||
Accrual of return on noncontrolling interest
|
$ | 1,220,324 | $ | 947,501 | ||||
Acquisitions:
|
- | |||||||
Intangible assets and equipment acquired
|
$ | 4,077,765 | - | |||||
Inventory acquired
|
430,141 | - | ||||||
Other current assets assumed
|
260 | - | ||||||
Other current liabilities assumed
|
(2,408,066 | ) | - | |||||
Net assets acquired
|
$ | 2,100,100 | ||||||
Notes payable issued
|
$ | (1,300,000 | ) | - | ||||
Common stock issued
|
$ | (800,000 | ) | - | ||||
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements
|
June 30,
|
||||||||
2013
|
2012
|
|||||||
Convertible notes
|
18,900,000 | 18,900,000 | ||||||
Convertible preferred stock - Series B
|
11,818,181 | 11,818,181 | ||||||
Warrants
|
24,585,662 | 24,585,662 | ||||||
Compensation-based stock options and warrants
|
69,208,483 | 74,481,483 | ||||||
124,512,326 | 129,785,326 |
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Land
|
$ | 4,558,125 | $ | 4,539,314 | ||||
Plantation development costs
|
10,152,896 | 9,229,638 | ||||||
Plantation equipment
|
1,714,644 | 1,546,971 | ||||||
Office equipment
|
109,752 | 108,598 | ||||||
Total cost
|
16,535,417 | 15,424,521 | ||||||
Less accumulated depreciation
|
(1,024,212 | ) | (865,518 | ) | ||||
Property and equipment, net
|
$ | 15,511,205 | $ | 14,559,002 |
Weighted
|
|||||||||||||
Weighted
|
Average
|
||||||||||||
Shares
|
Average
|
Remaining
|
Aggregate
|
||||||||||
Under
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Option
|
Price
|
Life
|
Value
|
||||||||||
Outstanding at December 31, 2012
|
68,608,483 | $ | 0.02 |
4.3 years
|
$ | - | |||||||
Granted
|
3,450,000 | 0.01 | |||||||||||
Exercised
|
- | - | |||||||||||
Forfeited
|
(350,000 | ) | 0.01 | ||||||||||
Expired
|
(2,500,000 | ) | 0.04 | ||||||||||
Outstanding at June 30, 2013
|
69,208,483 | 0.01 |
5.0 years
|
$ | 87,537 | ||||||||
Exercisable at June 30, 2013
|
42,725,983 | $ | 0.03 |
2.9 years
|
45,045 |
Weighted
|
Weighted
|
||||||||||||
Shares
|
Average
|
Average
|
Aggregate
|
||||||||||
Under
|
Exercise
|
Remaining
|
Intrinsic
|
||||||||||
Warrant
|
Price
|
Contractual Life
|
Value
|
||||||||||
Outstanding at December 31, 2012
|
24,585,662 | $ | 0.01 |
.75 years
|
$ | - | |||||||
Issued
|
- | - | |||||||||||
Exercised
|
- | - | $ | - | |||||||||
Expired
|
- | - | |||||||||||
Outstanding at June 30, 2013
|
24,585,662 | $ | 0.01 |
.25 years
|
$ | 314,184 |
Investment in Sustainable Oils
|
||||
Notes Payable to Targeted Growth
|
$ | 1,300,000 | ||
Cash (paid out)
|
100 | |||
Common stock issued
|
40,000 | |||
Additional paid in capital
|
760,000 | |||
$ | 2,100,100 |
Fair Values at
|
||||
Acquisition
|
||||
Date
|
||||
Prepaids and other assets
|
$ | 260 | ||
Inventory
|
430,141 | |||
Intangible Assets
|
3,887,265 | |||
Equipment
|
190,500 | |||
Accounts Payable to UOP
|
(2,286,727 | ) | ||
Commitment for field testing
|
(79,000 | ) | ||
Other accounts payable and accrued liabilities
|
(42,339 | ) | ||
Total net assets of Sustainable Oils
|
$ | 2,100,100 |
Revenue
|
Net Earnings (Losses)
|
|||||||
Actual March. 13 2013 - June 30, 2013
|
$ | 5,776 | $ | (174,489 | ) | |||
2013 Supplemental pro forma from
|
$ | 154,455 | $ | (975,881 | ) | |||
January 1 - June 30, 2013
|
||||||||
2012 Supplemental pro forma from
|
$ | 3,477,764 | $ | 9,179 | ||||
January 1 - June 30, 2012
|
·
|
Own and operate biofuel energy farms for our own account.
|
·
|
Own, operate and manage farms in a joint venture (JV) with either strategic partners or financial investors. We currently own three Jatropha farms in Mexico under such joint ownership arrangements:
|
·
|
Contract with third party farmers (such as wheat and barley farmers) for the farming of significant acreage of Camelina sativa on their idle land which is in rotation with their other crops in the United States and many parts of Europe.
|
·
|
Produce and sell certified Camelina seed based upon our patented, high-yielding elite varieties to farmers in the United States and internationally.
|
·
|
Provide energy farm development and management services to third party owners of biofuel energy farms and to non-energy farmers looking to utilize energy crops in rotation or inter-cropped with their existing crops. Provide advisory services to farmers wishing to certify their farms under international sustainability or carbon certification standards, specifically the Roundtable on Sustainable Biomaterials (RSB) and Gold Standard Verified Emission Reductions (GS-VERs)
|
·
|
Provide turnkey franchise operations for individuals and/or companies that wish to establish purpose specific energy farms in suitable geographical areas.
|
31.1
|
Rule 13a-14(a) Certification, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Link base
|
101.DEF
|
XBRL Taxonomy Extension Definition Link base Document
|
101.LAB
|
XBRL Taxonomy Extension Label Link base Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1.
|
I have reviewed this report on Form 10-Q of Global Clean Energy Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: August 5, 2013
|
By /s/ RICHARD PALMER
Richard Palmer
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Global Clean Energy Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: August 5, 2013
|
By /s/RICHARD PALMER
Richard Palmer
Acting Chief Financial Officer
|
(i)
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: August 5, 2013
|
By /s/ RICHARD PALMER
Richard Palmer
Chief Executive Officer and
Acting Chief Financial Officer
|
Note 10 - Acquisition of Camelina Assets and Sustainable Oils
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 10 - Acquisition of Camelina Assets and Sustainable Oils | Note 10 - Acquisition of Camelina Assets and Sustainable Oils
On March 13, 2013, the Company completed a business purchase that included certain assets, patents, and other intellectual property and rights related to the development of Camelina sativa as a biofuels feedstock (the Camelina Assets) from Targeted Growth, Inc., a Washington based crop biotechnology company focused on developing products with enhanced yield and improved quality for the agriculture and energy industries. Also on March 13, 2013, we purchased all of the membership interests of Sustainable Oils, LLC, (SusOils) a Delaware limited liability company, from Targeted Growth, Inc. and the other, minority owner of that limited liability company. SusOils is a company that, since 2007, has been engaged in the development, production and commercialization of Camelina-based biofuels and FDA approved animal feed. Substantially all of the Camelina Assets were previously owned by SusOils and used in SusOils operations.
The Camelina Assets include: three issued U.S. patents on Camelina Sativa varieties; a substantial portfolio of other intellectual property assets, all of the Sellers intellectual property related to the research, development, breeding and/or genetic development of Camelina; germplasm; licenses, consents, permits, variances, certifications and approvals granted by any governmental agencies relating to Camelina operations; machines, equipment, tractors and vehicles used in Camelina operations; the name Sustainable Oils and the Sustainable Oils logo; and certain trade secrets, know-how, and technical data.
We currently intend to operate our Camelina business through a new subsidiary. We intend to capitalize that new subsidiary with the Sustainable Oils intellectual properties and operating assets that we recently purchased. In order to fund the operations and expansion of the Camelina operations, we intend to raise additional capital through the sale of debt or equity in the newly formed Camelina subsidiary. Sustainable Oils operations have been headquartered in Bozeman, Montana. We intend to continue to conduct our Camelina operations in Montana. Accordingly, in March 2013, we entered into a sublease with Targeted Oils, Inc., to sublease a portion of Targeted Growths research facilities and administrative offices in Bozeman, Montana.
We paid for the Camelina Assets by issuing to Targeted Growth, Inc. (i) a secured promissory note in the principal amount of $1,300,000 (the Promissory Note see note 6 for more details) and (ii) an aggregate of 40,000,000 shares of our common stock. Of the 40,000,000 shares, 4,000,000 shares will be held by an escrow agent for 15 months following the closing for the purpose of providing a partial security to support the indemnity provisions of the purchase agreement. The 40,000,000 shares were valued at the market price on March 14, 2013.
The fair value of the consideration transferred to Targeted Growth, Inc. is in the following table:
The purchase price for the Sustainable Oils, LLC membership interests was $100. Sustainable Oils assets include 295,000 pounds of certified Camelina seeds that we intend to sell to farmers this year and/or next year for the production of Camelina feedstock. The liabilities of Sustainable Oils include an approximately $2.3 million liability to UOP LLC, which is secured by a lien on the three patents we acquired as part of the Camelina Assets. The foregoing debt owed to UOP LLC will remain a direct obligation of SusOils and not of this company.
The amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed are as follows:
The value of the acquired identifiable intangible assets of $3,887,265 has been recorded as of the acquisition date of March 13, 2013 pending completion of the valuation process.
The amounts of Sustainable Oils, LLC 's revenue and earnings included in the Companys consolidated income statement for the six months ended June 30, 2013, and the pro forma revenue and earnings of the combined entity had the acquisition date been January 1, 2013 and January 1, 2012, are as follows:
The cost incurred related to the acquisition of Sustainable Oils, LLC includes approximately $21,500 in legal and $6,000 in valuation fees.
The foregoing pro forma data is subject to various assumptions and estimates, and is presented for informational purposes only. This pro forma data does not purport to represent or be indicative of the consolidated operating results that would have been reported had the transaction been completed as described herein, and the data should not be taken as indicative of future consolidated operating results.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Statement | ||||
Revenue | $ 15,460 | $ 55,501 | $ 103,940 | $ 209,436 |
Subsidy Income | 33,368 | 50,515 | 465,586 | |
Total Revenue | 48,828 | 55,501 | 154,455 | 675,022 |
Operating Expenses | ||||
General and administrative | 681,024 | 624,910 | 1,241,163 | 1,252,377 |
Plantation operating costs | 47,677 | 198,460 | 617,833 | 351,244 |
Total Operating Expenses | 728,701 | 823,370 | 1,858,996 | 1,603,621 |
Loss from Operations | (679,873) | (767,869) | (1,704,541) | (928,599) |
Other Income (Expenses) | ||||
Other income | 4 | 48 | 23 | 57 |
Interest expense | (241,651) | (215,327) | (458,406) | (408,127) |
Gain on settlement of liabilities | 514,473 | |||
Loss on Sale of Investment held for sale | (178,896) | (178,896) | ||
Foreign currency transaction gain (loss) | (1,044) | 515 | (1,044) | |
Net Other Income (Expenses) | (420,543) | (216,323) | (636,764) | 105,359 |
Loss from Continuing Operations | (1,100,416) | (984,192) | (2,341,305) | (823,240) |
Gain (Loss) from Discontinued Operations | 340 | (1,698) | ||
Net Loss | (1,100,416) | (983,852) | (2,341,305) | (824,938) |
Less Net Loss Attributable to the Noncontrolling Interest | 362,538 | 580,969 | 1,365,424 | 781,019 |
Net Loss Attributable to Global Clean Energy Holdings, Inc. | (737,878) | (402,883) | (975,881) | (43,919) |
Amounts attributable to Global Clean Energy Holdings, Inc. common shareholders: | ||||
Loss from Continuing Operations | (737,878) | (403,223) | (975,881) | (42,221) |
Income (Loss) from Discontinued Operations | 340 | (1,698) | ||
Net Loss | $ (737,878) | $ (402,883) | $ (975,881) | $ (43,919) |
Basic Income (Loss) per Common Share: | ||||
Loss from Continuing Operations | $ (0.0022) | $ (0.0014) | $ (0.0032) | $ (0.0001) |
Net Loss per Common Share | $ (0.0022) | $ (0.0014) | $ (0.0032) | $ (0.0001) |
Basic Weighted-Average Common Shares Outstanding | 333,683,502 | 293,304,571 | 301,683,502 | 289,183,691 |
Diluted Income (Loss) per Common Share: | ||||
Income (Loss) from Continuing Operations | $ (0.0022) | $ (0.0014) | $ (0.0032) | $ 0.0001 |
Loss from Discontinued Operations | $ 0.0000 | |||
Net Income (Loss) per Common Share | $ (0.0022) | $ (0.0014) | $ (0.0032) | $ 0.0001 |
Diluted Weighted-Average Common Shares Outstanding | 333,683,502 | 293,304,571 | 301,683,502 | 289,183,691 |
Note 3 - Jatropha Business Venture
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Notes | |
Note 3 - Jatropha Business Venture | Note 3 Jatropha Business Venture
The Company entered into the bio-fuels business in 2007 by acquiring certain trade secrets, know-how, business plans, term sheets, business relationships, and other information relating to the cultivation and production of seed oil from the Jatropha plant for the production of bio-diesel, and by entering into certain employment agreements and property management agreements. Subsequent to entering into these transactions, the Company identified certain real property in Mexico it believed to be suitable for cultivating the Jatropha plant. During 2008, GCE Mexicos subsidiary acquired the land in Mexico for the cultivation of the Jatropha plant. In July 2009, the Company acquired Technology Alternatives, Limited (TAL), a company formed under the laws of Belize that had developed a farm in Belize for cultivation of the Jatropha plant and provided technical advisory services for the propagation of the Jatropha plant. In March 2010, the Company formed Asideros 2, a Mexican corporation, which has acquired additional land in Mexico adjacent to the land acquired by Asideros 1. All of these transactions are described in further detail in Note 1 above and in the remainder of the notes.
LODEMO Agreement
On October 15, 2007, the Company entered into a service agreement with Corporativo LODEMO S.A DE CV, a Mexican corporation (the LODEMO Group), to provide services related to the establishment, development, and day-to-day operations of the Companys Jatropha Business in Mexico. The Agreement had a 20-year term but could be terminated or modified earlier by the Company under certain circumstances. In June 2009, the scope of work previously performed by LODEMO was reduced and modified based upon certain labor functions being provided internally by the Company and by Asideros, the Companys Mexican subsidiary, on a go-forward basis. This agreement was cancelled in 2009. As of June 30, 2013 and as of December 31, 2012, the Companys financial statements reflect that it owes the LODEMO Group $251,500 for accrued, but unpaid, compensation and cost. The Company disputes the total of these charges and has been in discussions with LODEMO to resolve this liability.
GCE Mexico I, LLC and Subsidiaries
GCE Mexico was organized primarily to facilitate the acquisition of the initial 5,000 acres of farm land (the Jatropha Farm) in the State of Yucatan in Mexico to be used primarily for the (i) cultivation of Jatropha curcas, (ii) the marketing and sale of the resulting fruit, seeds, or pre-processed crude Jatropha oil, whether as biodiesel, feedstock, biomass or otherwise, and (iii) the sale of carbon value, green fuel value, or renewable energy credit value (and other similar environmental attributes) derived from activities at the Jatropha Farm.
Under GCE Mexicos operating agreement, as amended (the LLC Agreement), the Company owns 50% of the issued and outstanding common membership units of GCE Mexico. The remaining 50% of the common membership units was initially issued to five investors. The Company and the other owners of the common membership interest were not required to make capital contributions to GCE Mexico.
In addition, two investors agreed to invest in GCE Mexico through the purchase of preferred membership units and through the funding of the purchase of land in Mexico. An aggregate of 1,000 preferred membership units were issued to these two investors who each agreed to make capital contributions to GCE Mexico in installments and as required, fund the development and operations of the Jatropha Farm. In November 2012, one of the two investors transferred 100% of the interest to the other investor. The preferred members have made capital contributions of $1,310,030 and $3,258,090 during the six months ended June 30, 2013 and June 30, 2012, respectively, and total contributions of $20,870,733 have been received by GCE Mexico from these investors since the execution of the LLC Agreement. The LLC Agreement calls for additional contributions from the investors, as requested by management and as required by the operation in 2013 and the following years. The holder of the preferred membership interest is entitled to earn a preferential 12% per annum cumulative compounded return on the cumulative balance of the preferred membership interest. The preferential return increased $1,220,324, and $947,501 during the six months ended June 30, 2013 and June 30, 2012, respectively, and totals $6,183,907 since the execution of the LLC Agreement.
The net income or loss of the six Mexican subsidiaries that own the Mexico farms is allocated to the shareholders based on their respective equity ownership; 99% of the equity of each subsidiary is owned by GCE Mexico and 1% is owned by the Company. GCE Mexico has no operations separate from its investments in the Mexican subsidiaries. According to the LLC Agreement of GCE Mexico, the net loss of GCE Mexico is allocated to its members according to their respective investment balances. Accordingly, since the common membership interest did not make a capital contribution, all of the losses have been allocated to the preferred membership interest. The noncontrolling interest presented in the accompanying consolidated balance sheets includes the carrying value of the preferred membership interests and of the common membership interests owned by the Investors, and excludes any common membership interest in GCE Mexico held by the Company.
Technology Alternatives, Limited
On July 9, 2009, the Company purchased 100% of the stock of Technology Alternatives, Limited (TAL), a company formed under the laws of Belize in Central America. TAL owns approximately 400 acres of land that was used as a Jatropha farm. The land was sold in May 2013.
In connection with the acquisition, the Company issued promissory notes to the former shareholders of TAL in the aggregate amount of $526,462 Belize dollars, including capitalized interest of $10,322 Belize Dollars (US $280,170 based on exchange rates in effect on the funding date of May 17, 2013), These notes payable to shareholders accrued interest at 8% per annum. The notes were secured by a mortgage on the land and related improvements. The holders agreed to accept $195,747 USD as payment in full for all of their secured interest when the land was sold on May 17, 2013 at a discounted sales price of $395,000 USD. The unpaid principal balance of $84,422 of the notes, plus accrued interest of $28,078, was forgiven by the shareholders and written off by the Company. The related gain on forgiveness is included in Loss on Sale of Investment Held for Sale on the statement of operations. |
Note 8 - Stock Options and Warrants: Summary of The Status of Options and Compensation-based Warrants (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of The Status of Options and Compensation-based Warrants |
|
Note 1 - History and Basis of Presentation: Principles of Consolidation (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Policies | |
Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include the accounts of Global Clean Energy Holdings, Inc., its subsidiaries, and the variable interest entities of GCE Mexico, and its Mexican subsidiaries (Asideros, Asideros 2 and Asideros 3). All significant intercompany transactions have been eliminated in consolidation.
Generally accepted accounting principles require that if an entity is the primary beneficiary of a variable interest entity (VIE), the entity should consolidate the assets, liabilities and results of operations of the VIE in its consolidated financial statements. Global Clean Energy Holdings, Inc. considers itself to be the primary beneficiary of GCE Mexico, and its Mexican subsidiaries, and accordingly, has consolidated these entities since their formation beginning in April 2008, with the equity interests of the unaffiliated investors in GCE Mexico presented as Noncontrolling Interests in the accompanying condensed consolidated financial statements. |
Note 10 - Acquisition of Camelina Assets and Sustainable Oils: Schedule of Business Acquisitions, by Acquisition (Tables)
|
6 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition |
|
Note 10 - Acquisition of Camelina Assets and Sustainable Oils: Schedule of Business Acquisitions by Acquisition, Contingent Consideration (Tables)
|
6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||
Tables/Schedules | |||||||||||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration |
|
Note 4 - Property and Equipment (Details)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Plantation Equipment | Minimum
|
|
Property, Plant and Equipment, Useful Life | 5 years |
Plantation Equipment | Maximum
|
|
Property, Plant and Equipment, Useful Life | 15 years |
Plantation Development Costs | Minimum
|
|
Property, Plant and Equipment, Useful Life | 10 years |
Plantation Development Costs | Maximum
|
|
Property, Plant and Equipment, Useful Life | 35 years |
Note 8 - Stock Options and Warrants: Stock Warrants (Details) (USD $)
|
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Details | ||
Warrants, Outstanding | 24,585,662 | 24,585,662 |
Warrants, Weighted Average Exercise Price | 0.01 | 0.01 |
Warrants, Weighted Average Remaining Contractual Life | 3 months | 9 months |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding | $ 314,184 |
Note 2 - Going Concern Considerations (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
|
Details | |||||
Loss from Continuing Operations | $ (1,100,416) | $ (984,192) | $ (2,341,305) | $ (823,240) | |
Accumulated deficit | 27,574,888 | 27,574,888 | 26,599,007 | ||
Net Cash Used in Operating Activities | (1,080,639) | (1,860,384) | |||
Working Capital | 4,094,539 | 4,094,539 | |||
Total Global Clean Energy Holdings, Inc. Stockholders' Deficit | (1,703,375) | (1,703,375) | (1,773,410) | ||
Capital Contributions from the Preferred Membership Interest | 20,870,733 | ||||
Mortgages Issued for Land Acquisition | $ 5,110,189 |
Note 10 - Acquisition of Camelina Assets and Sustainable Oils: Schedule of Business Acquisitions, by Acquisition (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Inventory | $ 426,205 | $ 1,564 |
Property, Plant and Equipment, Gross | 16,535,417 | 15,424,521 |
TOTAL ASSETS | 24,012,777 | 19,481,729 |
Sustainable Oils LLC Acquisition
|
||
Prepaid Expense and Other Assets, Current | 260 | |
Inventory | 430,141 | |
Intangible Assets, Current | 3,887,265 | |
Property, Plant and Equipment, Gross | 190,500 | |
Accounts Payable, Current | (2,286,727) | |
Other Liabilities, Current | (79,000) | |
Accounts Payable and Other Accrued Liabilities, Current | (42,339) | |
TOTAL ASSETS | $ 2,100,100 |
Note 8 - Stock Options and Warrants: Stock Warrants (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Warrants |
|
Note 1 - History and Basis of Presentation
|
6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||
Note 1 - History and Basis of Presentation | Note 1 History and Basis of Presentation
History
Global Clean Energy Holdings, Inc. is a U.S.-based, multi-national, energy agri-business focused on the development of non-food based bio-feedstocks.
The company was originally incorporated under the laws of the State of Utah on November 20, 1991. On July 19, 2010, the reincorporation of the company from a Utah corporation to a Delaware corporation was completed, as approved by shareholders. In the reincorporation, each outstanding share of the companys common stock was automatically converted into one share of common stock of the surviving Delaware corporation. In addition, the par value of the Companys capital stock changed from no par per share to $0.001 per share. The effects of the change in par value have been reflected retroactively in the accompanying condensed consolidated financial statements and notes thereto for all periods presented. The effect of retroactively applying the par value of $0.001 per share resulted in reclassification of $17,409,660 of common stock and $1,290,722 of preferred stock as of December 31, 2008 to additional paid-in capital. The reincorporation did not result in any change in the companys name, ticker symbol, CUSIP number, business, assets or operations. The management and Board of Directors of the company remained the same.
Principles of Consolidation
The consolidated financial statements include the accounts of Global Clean Energy Holdings, Inc., its subsidiaries, and the variable interest entities of GCE Mexico, and its Mexican subsidiaries (Asideros, Asideros 2 and Asideros 3). All significant intercompany transactions have been eliminated in consolidation.
Generally accepted accounting principles require that if an entity is the primary beneficiary of a variable interest entity (VIE), the entity should consolidate the assets, liabilities and results of operations of the VIE in its consolidated financial statements. Global Clean Energy Holdings, Inc. considers itself to be the primary beneficiary of GCE Mexico, and its Mexican subsidiaries, and accordingly, has consolidated these entities since their formation beginning in April 2008, with the equity interests of the unaffiliated investors in GCE Mexico presented as Noncontrolling Interests in the accompanying condensed consolidated financial statements.
Unaudited Interim Condensed Consolidated Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included and are of normal, recurring nature. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Companys annual report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission. The results of operations for the six months ended June 30, 2013, may not be indicative of the results that may be expected for the year ending December 31, 2013.
Accounting for Agricultural Operations
All costs incurred until the actual planting of the Jatropha Curcas plant are capitalized as plantation development costs, and are included in Property and Equipment on the balance sheet. Plantation development costs are being accumulated in the balance sheet during the development period and are accounted for in accordance with accounting standards for Agricultural Producers and Agricultural Cooperatives. The direct costs associated with each farm and the production of the Jatropha revenue streams have been deferred and accumulated as a noncurrent asset, Deferred Growing Costs, on the balance sheet. Other general costs without expected future benefits are expensed when incurred.
Income/Loss per Common Share
Income/Loss per share amounts are computed by dividing income or loss applicable to the common shareholders of the Company by the weighted-average number of common shares outstanding during each period. Diluted income or loss per share amounts are computed assuming the issuance of common stock for potentially dilutive common stock equivalents. The number of dilutive warrants and options is computed using the treasury stock method, whereby the dilutive effect is reduced by the number of treasury shares the Company could purchase with the proceeds from exercises of warrants and options. As of June 30, 2013 and 2012, all convertible instruments were anti-dilutive.
The following instruments are currently antidilutive and have been excluded from the calculations of diluted income or loss per share at June 30, 2013 and 2012, as follows:
Revenue Recognition
Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the sellers price to the buyer is fixed or determinable; collectability is reasonably assured; and title and the risks and rewards of ownership have transferred to the buyer. Value added taxes collected on revenue transactions are excluded from revenue and are included in accounts payable until remittance to the taxation authority.
Jatropha oil revenue - The Companys primary source of revenue will be crude Jatropha oil. Revenue will be recognized net of sales or value added taxes and upon transfer of significant risks and rewards of ownership to the buyer. Revenue is not recognized when there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.
Advisory services revenue - The Company provides development and management services to other companies regarding their bio-fuels and/or feedstock-Jatropha development operations, on a fee for services basis. The advisory services revenue is recognized upon completion of the work in accordance with the separate contract.
Agricultural subsidies revenue - the Company receives agricultural subsidies from the Mexican government. Due to the uncertainty of these payments, the revenue is recognized when the payments are received. |
Note 4 - Property and Equipment
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6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Notes | |||||||||||||||||||||||||||||||||||||
Note 4 - Property and Equipment | Note 4 Property and Equipment
Property and equipment are as follows:
Commencing in June 2008, Asideros I purchased certain equipment for purposes of rapidly clearing the land, preparing the land for planting, and actually planting the Jatropha trees. The Company has capitalized farming equipment and costs related to the development of land for farm use in accordance with generally accepted accounting principles for accounting by agricultural producers and agricultural cooperatives. Plantation equipment is depreciated using the straight-line method over estimated useful lives of 5 to 15 years. Depreciation expense has been capitalized as part of plantation development costs through the date that the plantation becomes commercially productive. The initial plantations were deemed to be commercially productive on October 1, 2009, at which date the Company commenced the depreciation of plantation development costs over estimated useful lives of 10 to 35 years, depending on the nature of the development. Developments and other improvements with indefinite lives are capitalized and not depreciated. Other developments that have a limited life and intermediate-life plants that have growth and production cycles of more than one year are being depreciated over their useful lives once they are placed in service. The land, plantation development costs, and plantation equipment are located in Mexico.
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Note 2 - Going Concern Considerations
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6 Months Ended |
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Jun. 30, 2013
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Notes | |
Note 2 - Going Concern Considerations | Note 2 Going Concern Considerations
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company incurred losses from continuing operations applicable to its common shareholders of $2,341,305 and $823,240 for the six-months ended June 30, 2013, and June 30, 2012, respectively, has an accumulated deficit applicable to its common shareholders of $27,574,888 at June 30, 2013. The Company also used cash in operating activities of $1,080,639 and $1,860,384 during the six-month period ended June 30, 2013 and June 30, 2012, respectively. At June 30, 2013, the Company has negative working capital of $4,094,539 and a stockholders deficit attributable to its stockholders of $1,703,375. These factors raise substantial doubt about the Companys ability to continue as a going concern.
The Company commenced its new business related to the cultivation and production of oil from the seed of the Jatropha plant in September 2007. Management plans to meet its cash needs through various means including securing financing, entering into joint ventures, and developing the current business model. In order to fund its operations, the Company has to date received $20,870,733 in capital contributions from the preferred membership interest in GCE Mexico I, LLC (GCE Mexico), has issued mortgages in the total amount of $5,110,189 for the acquisition of land. The Company is developing the new business operation to participate in the rapidly growing bio-diesel industry. While the Company expects to be successful in this new venture, there is no assurance that its business plan will be economically viable. The ability of the Company to continue as a going concern is dependent on that plans success. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note 10 - Acquisition of Camelina Assets and Sustainable Oils (Details) (USD $)
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1 Months Ended | 6 Months Ended |
---|---|---|
Mar. 31, 2013
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Jun. 30, 2013
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Stock Issued During Period, Shares, Acquisitions | 40,000,000 | |
Escrow Shares
|
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Stock Issued During Period, Shares, Acquisitions | 4,000,000 | |
Sustainable Oils LLC Acquisition
|
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Debt Instrument, Face Amount | $ 1,300,000 | $ 1,300,000 |
Stock Issued During Period, Shares, Acquisitions | 40,000,000 | |
Current Asset Description | 295,000 pounds of certified Camelina seeds | |
Acquired Finite-lived Intangible Asset, Residual Value | 3,887,265 | |
Sustainable Oils LLC Acquisition | Legal Fees
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Business Acquisition, Transaction Costs | 21,500 | |
Sustainable Oils LLC Acquisition | Valuation Fees
|
||
Business Acquisition, Transaction Costs | 6,000 | |
Sustainable Oils LLC Acquisition | UOP LLC
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Notes Payable | 2,300,000 | |
Sustainable Oils LLC Acquisition | Notes Payable to Targeted Growth, Inc.
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Payments to Acquire Businesses, Net of Cash Acquired | 100 | |
Notes Payable | $ 1,300,000 |
Note 10 - Acquisition of Camelina Assets and Sustainable Oils: Business Acquisition, Pro Forma Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2013
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Tables/Schedules | |||||||||||||||||||||||||
Business Acquisition, Pro Forma Information |
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Note 3 - Jatropha Business Venture (Details) (USD $)
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6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
LODEMO Agreement
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Jun. 30, 2013
GCE Mexico I LLC And Subsidiaries
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Dec. 31, 2012
GCE Mexico I LLC And Subsidiaries
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Jun. 30, 2012
GCE Mexico I LLC And Subsidiaries
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Jul. 02, 2009
Technology Alternatives Limited
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Jun. 30, 2013
Technology Alternatives Limited
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Jul. 09, 2009
Technology Alternatives Limited
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Jul. 09, 2009
Technology Alternatives Limited
Belize, Dollars
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|
Agreement Termination, Accrued Liabilities, Unpaid Compensation And Costs | $ 251,500 | |||||||||
Equity Method Investment, Ownership Percentage | 50.00% | 100.00% | ||||||||
General Partners' Contributed Capital | 1,310,030 | 3,258,090 | ||||||||
Capital Contributions from the Preferred Membership Interest | 20,870,733 | |||||||||
Investors Preferential Return Rate | 12.00% | |||||||||
Investors Preferential Return During Period | 1,220,324 | 947,501 | ||||||||
Accrual of preferential return for the noncontrolling interests | (1,220,324) | (947,501) | 6,183,907 | |||||||
Land, in acres | 400 | |||||||||
Long-term Debt, Gross | 526,462 | |||||||||
Interest Costs Capitalized | 280,170 | 10,322 | ||||||||
Debt Instrument, Interest Rate Terms | These notes payable to shareholders accrued interest at 8% per annum. | |||||||||
Repayments of Debt | 195,747 | |||||||||
Debt Instrument, Collateral Amount | 395,000 | |||||||||
Debt Instrument, Decrease, Forgiveness | 84,422 | |||||||||
Debt Instrument, Decrease Interest Forgiveness | $ 28,078 |
Note 7 - Common Stock (Details)
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6 Months Ended | 1 Months Ended |
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Jun. 30, 2013
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Mar. 31, 2013
Sustainable Oils LLC Acquisition
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Stock Issued During Period, Shares, Acquisitions | 40,000,000 | 40,000,000 |