exhibit99-2.htm

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

In re: [CASE NAME]		ECO2 Plastics Inc.				Case No.			09-33702 DM
		A Delaware Corporation
						CHAPTER 11
						MONTHLY OPERATING REPORT
						(GENERAL BUSINESS CASE)
SUMMARY OF FINANCIAL STATUS
		MONTH ENDED:	Dec-09			PETITION DATE:			11/24/09
	1.	Debtor in possession (or trustee) hereby submits this Monthly Operating Report on the Accrual Basis of accounting (or if checked here
		the Office of the U.S. Trustee or the Court has approved the Cash Basis of Accounting for the Debtor).
		Dollars reported in	$	1
	2.	Asset and Liability Structure				End of Current Month			End of Prior Month			As of Petition Filing
		a. Current Assets				$	535,707		$	319,577
		b. Total Assets				$	1,735,707		$	1,719,577		$	1,717,899
		c. Current Liabilities				$	191,903		$	29,074
		d. Total Liabilities				$	15,611,788		$	15,448,959		$	15,419,884
	3.	Statement of Cash Receipts & Disbursements for Month				Current Month			Prior Month			Cumulative (Case to Date)
		a. Total Receipts				$	201,906					$	201,906
		b. Total Disbursements				$	145,855					$	145,855
		c. Excess (Deficiency) of Receipts Over Disbursements (a - b)				$	56,051		$	0		$	56,051
		d. Cash Balance Beginning of Month				$	5,678		$	5,678		$	5,678
		e. Cash Balance End of Month (c + d)				$	61,729		$	5,678		$	61,729
						Current Month			Prior Month			Cumulative (Case to Date)
	4.	Profit/(Loss) from the Statement of Operations				$	(169,278	)	$	(29,074	)	$	(198,351	)
	5.	Account Receivables (Pre and Post Petition)				$	315,255		$	177,755
	6.	Post-Petition Liabilities				$	191,903		$	0
	7.	Past Due Post-Petition Account Payables (over 30 days)				$	0		$	0
At the end of this reporting month:									Yes			No
	8.	Have any payments been made on pre-petition debt, other than payments in the normal											x
		course to secured creditors or lessors? (if yes, attach listing including date of
		payment, amount of payment and name of payee)
	9.	Have any payments been made to professionals? (if yes, attach listing including date of											x
		payment, amount of payment and name of payee)
	10.	If the answer is yes to 8 or 9, were all such payments approved by the court?											x
	11.	Have any payments been made to officers, insiders, shareholders, relatives? (if yes,											x
		attach listing including date of payment, amount and reason for payment, and name of payee)
	12.	Is the estate insured for replacement cost of assets and for general liability? (market value)								x
	13.	Are a plan and disclosure statement on file?											x
	14.	Was there any post-petition borrowing during this reporting period?											x
	15.	Check if paid: Post-petition taxes			; U.S. Trustee Quarterly Fees				; Check if filing is current for: Post-petition
		tax reporting and tax returns:			.
		(Attach explanation, if post-petition taxes or U.S. Trustee Quarterly Fees are not paid current or if post-petition tax
		reporting and tax return filings are not current.)
I declare under penalty of perjury I have reviewed the above summary and attached financial statements, and after making reasonable inquiry
believe these documents are correct.
Date:		1/20/2010 0:00				/s/ Rodney S. Rougelot
						Responsible Individual

STATEMENT OF OPERATIONS (General Business Case)
For the Month Ended 12/31/09
Current Month
Actual			Forecast			Variance						Cumulative (Case to Date)			Next Month Forecast
										Revenues:
						$	0		1	Gross Sales		$	0
$	0					$	0		2	less: Sales Returns & Allowances		$	0
$	0		$	0		$	0		3	Net Sales		$	0		$	0
$	0					$	0		4	less: Cost of Goods Sold (Schedule 'B')		$	0
$	0		$	0		$	0		5	Gross Profit		$	0		$	0
$	0					$	0		6	Interest		$	0
						$	0		7	Other Income:
						$	0		8
						$	0		9
$	0		$	0		$	0		10	Total Revenues		$	0		$	0
										Expenses:
$	29,192		$	25,385		$	(3,807	)	11	Compensation to Owner(s)/Officer(s)		$	40,615		$	29,192
$	41,544		$	34,884		$	(6,660	)	12	Salaries		$	57,242		$	47,696
						$	0		13	Commissions
						$	0		14	Contract Labor
$	2,996		$	1,500		$	(1,496	)	15	Rent/Lease: Personal Property		$	2,996		$	1,500
$	32,284		$	32,284		$	0		16	Real Property		$	32,284		$	15,000
$	17,179		$	18,373		$	1,194		17	Insurance		$	17,179		$	11,110
						$	0		18	Management Fees
						$	0		19	Depreciation
$	3,279		$	5,786		$	2,507		20	Taxes: Employer Payroll Taxes		$	5,232		$	7,074
						$	0		21	Real Property Taxes
						$	0		22	Other Taxes
						$	0		23	Other Selling
$	500					$	(500	)	24	Other Administrative (Cafeteria)		$	500		$	135
			$	16,436		$	16,436		25	Interest					$	21,195
$	2,103		$	500		$	(1,603	)	26	Other Expenses:	General	$	2,103		$	500
$	2,448		$	6,000		$	3,552		27	Utilities		$	2,448		$	2,500
			$	18,750		$	18,750		28	Cool Clean Settlement					$	18,750
$	3,682					$	(3,682	)	29	Employee Expenses		$	3,682		$	2,500
$	80					$	(80	)	30	Bank Charges		$	80		$	40
$	1,205					$	(1,205	)	31	Other Legal Fees		$	1,205
						$	0		32
						$	0		33
			$	54,905		$	54,905		34	Prepetition Employee Expenses					$	54,905
$	136,493		$	214,803		$	78,310		35	Total Expenses		$	165,566		$	212,096
$	(136,493	)	$	(214,803	)	$	78,310		36	Subtotal		$	(165,566	)	$	(212,096	)
$	(122,187	)				$	122,187		37	Reorganization Items: Professional Fees		$	(122,187	)	$	(50,000	)
						$	0		38	Provisions for Rejected Executory Contracts		$	0
						$	0		39	Interest Earned on Accumulated Cash from		$	0
										Resulting Chp 11 Case			0
$	89,402					$	89,402		40	Gain or (Loss) from Sale of Equipment		$	89,402		$	87,150
						$	0		41	U.S. Trustee Quarterly Fees
						$	0		42
$	(32,785	)	$	0		$	(32,785	)	43	Total Reorganization Items		$	(32,785	)	$	37,150
$	(169,278	)	$	(214,803	)	$	45,525		44	Net Profit (Loss) Before Federal & State Taxes		$	(198,351	)	$	(174,946	)
						$	0		45	Federal & State Income Taxes
$	(169,278	)	$	(214,803	)	$	45,525		46	Net Profit (Loss)		$	(198,351	)	$	(174,946	)

Attach an Explanation of Variance to Statement of Operations (For variances greater than +/- 10% only):


Exhibit A - Statement of Operations - Explanation of Variances +/- 10%
Line 11. Forecast did not include 3 days of accrual
Line 12. Forecast did not include 3 days of accrual or plant labor used to dismantle equipment for sale
Line 15. Two payments were made to bring account current post petition
Line 20. Used New year rates for forecast in December in error
Line 24. Approved expenditure not forecast in December
Line 25. Not paid due to delay in DIP financing
Line 26. Higher than planned expenses due to purchase of materials related to dismantle
Line 27. Some Utilities not paid due to delay in DIP financing
Line 28. Not paid due to delay in DIP financing
Line 29. Not included in original operating budget.
Line 30. Bank charges for wire transfers not in forecast
Line 31. Post petition legal expenses not in forecast
Line 34. Pre petition key employee expenses in forecast but not yet approved by the Court.
Line 37. Legal expense omitted in forecast in error but amount was included in operating budget.

BALANCE SHEET
(General Business Case)
For the Month Ended 12/31/09
		Assets
						From Schedules		Market Value
		Current Assets
	1		Cash and cash equivalents - unrestricted					$	61,729
	2		Cash and cash equivalents - restricted					$	36,144
	3		Accounts receivable (net)				A	$	315,255
	4		Inventory				B	$	0
	5		Prepaid expenses
	6		Professional retainers					$	22,578
	7		Other:		Honeywell License			$	100,000
	8
	9			Total Current Assets				$	535,707
		Property and Equipment (Market Value)
	10		Real property				C	$	0
	11		Machinery and equipment				D	$	1,190,000
	12		Furniture and fixtures				D
	13		Office equipment				D	$	10,000
	14		Leasehold improvements				D	$	0
	15		Vehicles				D	$	0
	16		Other:				D
	17						D
	18						D
	19						D
	20						D
	21			Total Property and Equipment				$	1,200,000
		Other Assets
	22		Loans to shareholders
	23		Loans to affiliates
	24
	25
	26
	27
	28			Total Other Assets				$	0
	29			Total Assets				$	1,735,707
		NOTE:
			Indicate the method used to estimate the market value of assets (e.g., appraisals; familiarity with comparable market
			prices, etc.) and the date the value was determined.




Liabilities and Equity
(General Business Case)

		Liabilities From Schedules
		Post-Petition
			Current Liabilities
	30			Salaries and wages				$	8,521
	31			Payroll taxes				$	852
	32			Real and personal property taxes
	33			Income taxes
	34			Sales taxes
	35			Notes payable (short term)
	36			Accounts payable (trade)			A	$	10,344
	37			Real property lease arrearage
	38			Personal property lease arrearage
	39			Accrued professional fees				$	122,187
	40			Current portion of long-term post-petition debt (due within 12 months)
	41			Other:
	42			Deposit on Sale of Assets				$	50,000
	43
	44			Total Current Liabilities				$	191,903
	45		Long-Term Post-Petition Debt, Net of Current Portion
	46			Total Post-Petition Liabilities				$	191,903
		Pre-Petition Liabilities (allowed amount)
	47			Secured claims			F	$	12,403,473
	48			Priority unsecured claims			F	$	238,711
	49			General unsecured claims			F	$	2,777,701
	50			Total Pre-Petition Liabilities				$	15,419,885
	51			Total Liabilities				$	15,611,788
		Equity (Deficit)
	52		Retained Earnings/(Deficit) at time of filing					$	(102,005,916	)
	53		Capital Stock					$	1,039,564
	54		Additional paid-in capital					$	117,000,652
	55		Cumulative profit/(loss) since filing of case					$	(198,351	)
	56		Post-petition contributions/(distributions) or (draws)
	57
	58		Market value adjustment					$	(29,712,030	)	Adjusted for retainer not reported in November
	59			Total Equity (Deficit)				$	(13,876,081	)
	60	Total Liabilities and Equity (Deficit)						$	1,735,707

								$	0

SCHEDULES TO THE BALANCE SHEET

(General Business Case)

Schedule A

Accounts Receivable and (Net) Payable

Receivables and Payables Agings

Accounts Receivable

[Pre and Post Petition]

Accounts Payable

[Post Petition]

Past Due

Post Petition Debt

0 -30 Days

137,500

10,344

31-60 Days

61-90 Days

91+ Days

177,755

Total accounts receivable/payable

315,255

10,344

Allowance for doubtful accounts

Accounts receivable (net)

315,255

Schedule B

Inventory/Cost of Goods Sold

Types and Amount of Inventory(ies)

Cost of Goods Sold

Inventory(ies)

Balance at

End of Month

Inventory Beginning of Month

Add -

Retail/Restaurants -

Net purchase

Product for resale

Direct labor

Manufacturing overhead

Distribution -

Freight in

Products for resale

Other:

Manufacturer -

Raw Materials

Work-in-progress

Less -

Finished goods

Inventory End of Month

Shrinkage

Other - Explain

Personal Use

Cost of Goods Sold

TOTAL

Method of Inventory Control

Inventory Valuation Methods

Do you have a functioning perpetual inventory system?

Indicate by a checkmark method of inventory used.

Yes

How often do you take a complete physical inventory?

Valuation methods -

FIFO cost

Weekly

LIFO cost

Monthly

Lower of cost or market

Quarterly

Retail method

Semi-annually

Other

Annually

Explain

Date of last physical inventory was

12/31/2009 0:00

Date of next physical inventory is

Schedule C Real Property
Description		Cost	Market Value






Total	$	0	$0

Schedule D Other Depreciable Assets
Description		Cost	Market Value
Machinery & Equipment -
Plastic Plant			$1,190,000
Assets for Sale


Total	$	0	$1,190,000
Furniture & Fixtures -




Total	$	0	$0
Office Equipment -
			$10,000


Total	$	0	$10,000
Leasehold Improvements -




Total	$	0	$0
Vehicles -




Total	$	0	$0

Schedule E
Aging of Post-Petition Taxes
(As of End of the Current Reporting Period)
Taxes Payable		0-30 Days		31-60 Days		61-90 Days		91+ Days		Total
Federal
	Income Tax Withholding									$	0
	FICA - Employee									$	0
	FICA - Employer									$	0
	Unemployment (FUTA)									$	0
	Income									$	0
	Other (Attach List)									$	0
Total Federal Taxes		$	0	$	0	$	0	$	0	$	0
State and Local
	Income Tax Withholding									$	0
	Unemployment (UT)									$	0
	Disability Insurance (DI)									$	0
	Empl. Training Tax (ETT)									$	0
	Sales									$	0
	Excise									$	0
	Real property									$	0
	Personal property									$	0
	Income									$	0
	Other (Attach List)									$	0
Total State & Local Taxes		$	0	$	0	$	0	$	0	$	0
Total Taxes		$	0	$	0	$	0	$	0	$	0
Schedule F
Pre-Petition Liabilities
List Total Claims For Each Classification -						Claimed Amount		Allowed Amount (b)
	Secured claims (a)					$	12,403,473	$	12,403,473
	Priority claims other than taxes					$	115,343	$	32,700
	Priority tax claims					$	206,011	$	206,011
	General unsecured claims					$	2,695,058	$	2,777,701
	(a) List total amount of claims even it under secured.
	(b) Estimated amount of claim to be allowed after compromise or litigation. As an example, you are a defendant in a lawsuit
	alleging damage of $10,000,000 and a proof of claim is filed in that amount. You believe that you can settle the case for a
	claim of $3,000,000. For Schedule F reporting purposes you should list $10,000,000 as the Claimed Amount and
	$3,000,000 as the Allowed Amount.
Schedule G Rental Income Information Not applicable to General Business Cases
Schedule H Recapitulation of Funds Held at End of Month
		Account 1		Account 2		Account 3		Account 4
Bank		Wells Fargo		Wells Fargo		Petty Cash
Account Type		Checking		Savings
Account No.		XXXXXXXX		XXXXXXXX
Account Purpose		operations
Balance, End of Month		$	72,555	$	678	$	468
Total Funds on Hand for all Accounts		$	73,701
Attach copies of the month end bank statement(s), reconciliation(s), and the check register(s) to the Monthly Operating Report.

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
Increase/(Decrease) in Cash and Cash Equivalents
For the Month Ended 12/31/09
			Actual Current Month		Cumulative (Case to Date)
		Cash Receipts
	1	Rent/Leases Collected	$	0	$	0
	2	Cash Received from Sales
	3	Interest Received	$	0	$	0
	4	Borrowings	$	0	$	0
	5	Funds from Shareholders, Partners, or Other Insiders
	6	Capital Contributions	$	0	$	0
	7	Sales of Assets	$	198,550	$	198,550
	8	Sales of Assets Scrap	$	3,352	$	3,352
	9	Refund (Honeywell)	$	4	$	4
	10
	11
	12	Total Cash Receipts	$	201,906	$	201,906
		Cash Disbursements
	13	Payments for Inventory		0		0
	14	Selling	$	0	$	0
	15	Administrative	$	0	$	0
	16	Capital Expenditures	$	0	$	0
	17	Principal Payments on Debt	$	0	$	0
	18	Interest Paid	$	0	$	0
		Rent/Lease:	$	0	$	0
	19	Personal Property	$	32,284	$	32,284
	20	Real Property	$	0	$	0
		Amount Paid to Owner(s)/Officer(s)	$	0	$	0
	21	Salaries	$	77,047	$	77,047
	22	Draws	$	0	$	0
	23	Commissions/Royalties	$	0	$	0
	24	Expense Reimbursements	$	1,115	$	1,115
	25	Other	$	0	$	0
	26	Salaries/Commissions (less employee withholding)	$	0	$	0
	27	Management Fees	$	0	$	0
		Taxes:	$	0	$	0
	28	Employee Withholding	$	12,289	$	12,289
	29	Employer Payroll Taxes	$	4,380	$	4,380
	30	Real Property Taxes	$	0	$	0
	31	Other Taxes	$	0	$	0
	32	Other Cash Outflows:	$	0	$	0
	33	Liability Insurance	$	11,971	$	11,971
	34	Health Benefits	$	5,208	$	5,208
	35	Payroll Processing	$	456	$	456
	36	Misc Supplies	$	1,024	$	1,024
	37	Bank Charges	$	80	$	80
	38	Total Cash Disbursements:	$	145,855	$	145,855
	39	Net Increase (Decrease) in Cash	$	56,051	$	56,051
	40	Cash Balance, Beginning of Period	$	5,678	$	5,678
	41	Cash Balance, End of Period	$	61,729	$	61,729