Note 8. Deposit for Clean Room

3 Months Ended

Mar. 31, 2015

Disclosure Text Block Supplement [Abstract]

Other Assets Disclosure [Text Block]

Note 8. Deposit for Clean Room

On March 4, 2015, the Company signed an asset purchase agreement to acquire an approximately 1,300 square foot Class 5 clean room. The Company expects to install the clean room in Colorado, where it will serve as a center for hygienic testing and quality control services to cannabis growers and retailers. The agreement calls for GTSO to pay a total of $2,500,000 for the clean room with $250,000 to be paid in cash installments and the remaining $2,250,000 payable by the issuance of 3,000,000 shares of common stock of the Company. As of March 31, 2015, we have made cash payments of $50,000 and issued 3,000,000 shares of our common stock in satisfaction of this requirement. For accounting purposes, the shares issued for the purchase of the clean room were valued at $5,400,000 based on the fair market value of the stock on the date the agreement was signed. The Company does not have the right to install and begin using the clean room until the purchase price is paid in full. As a result, the purchase price has been recorded as a deposit for the purchase of fixed assets on the balance sheet.

The 3,000,000 shares of common stock issued for the purchase of the clean room will be exchanged in three tranches of 1,000,000 shares each for a number of shares with a total value based on the 20-day volume weighted average price (as defined in the agreement) of $750,000 for each tranche. The exchange dates are (1) the later of 60 days following the closing or the date the registration statements is declared effective, (2) the end of the sixth months following the closing date, and (3) the end of the eighth month following the closing date.

We are required to prepare and file a registration statement with the Securities and Exchange Commission to register the shares underlying this agreement within 30 days after the signing of the agreement and to use our best efforts to cause that registration statement to be declared effective within 270 days.