Note 5. Deposit for Clean Room

3 Months Ended

Mar. 31, 2016

Disclosure Text Block Supplement [Abstract]

Other Assets Disclosure [Text Block]

Note 5. Deposit for Clean Room

On March 4, 2015, the Company signed an asset purchase agreement with SRN Properties Corporation (“SRN Properties”) 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 called for GTSO to pay 3,000,000 shares of common stock of the Company and $250,000 to be paid in cash installments. As of December 31, 2015, we had made cash payments of $122,500 and issued 3,000,000 shares of our common stock in satisfaction of this requirement. As of December 31, 2015, the remaining cash owed to SRN Properties of $127,500 was recorded as accounts payable to related party on the balance sheet. SRN Properties was not a related party prior to the acquisition; however, it is a significant shareholder after the acquisition. 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.

 As of December 31, 2015, the Company determined that the asset related to the deposit for the purchase of the clean room was impaired and should be written off.  The Company has been unable to make the remaining cash payments required under the purchase agreement and does not expect to be able to make those payments in the near future. As a result, the Company recorded a loss on impairment of fixed assets of $5,650,000 during the year ended December 31, 2015.

On January 6, 2016, we amended the agreement with SRN Properties. The purchase price for the clean room consists of $250,000 in cash ($122,500 of which has been already been paid) and 9,000 restricted shares of our Series A preferred stock. As part of the amendment, SRN Properties agreed to return 3,000,000 shares of our common stock that were issued upon execution of the original agreement.