x |
Preliminary
Information Statement
|
o | Confidential, for use of the Commission Only (as permitted |
o | Definitive Information Statement by Rule 14a-6(e)(2)) |
x |
No
fee required.
|
o |
Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
|
(1) |
Title
of each class of securities to which transaction applies:
|
(2) |
Aggregate
number of securities to which transaction applies:
|
(3) |
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is
calculated and state how it was determined):
|
(4) |
Proposed
maximum aggregate value of transaction:
|
(5) |
Total
fee paid:
|
o |
Fee
paid previously with preliminary materials.
|
o |
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its filing.
|
(1) |
Amount
Previously Paid:
|
(2) |
Form,
Schedule or Registration Statement No.:
|
(3) |
Filing
party:
|
(4) |
Date
filed:
|
Milwaukee,
Wisconsin
*,
2007
|
By
Order of the Board of Directors,
/s/
John King
John
King
Secretary
|
1. |
Issuance
of up to 345,710,000 shares of our common stock, $0.01 par value,
issuable
upon the conversion of 345,710 shares of Series A Convertible Preferred
Stock issued in connection with the merger of Renewal Fuels Acquisitions,
Inc., a wholly-owned subsidiary of the Company with and into Renewal
Fuels, Inc.
|
2. |
Merger
of the Company with and into Tech Laboratories, Inc., a newly formed
Delaware corporation (the “Migratory Merger”) resulting in a change of the
Company’s domicile from New Jersey to
Delaware.
|
· |
Extreme
Biodiesel ()
|
· |
EZ
Biodiesel ()
|
· |
Biodiesel
Works ()
|
•
|
the
threat of global terrorism;
|
|
•
|
regional
political instability in areas where exploratory oil and gas wells
are
drilled;
|
•
|
the
available supply of oil;
|
|
•
|
the
level of consumer product demand;
|
|
•
|
weather
conditions;
|
|
•
|
political
conditions and policies in the greater oil producing regions, including
the Middle East;
|
•
|
the
ability of the members of the Organization of Petroleum Exporting
Countries to agree to and maintain oil price and production controls;
|
|
•
|
the
price of foreign imports;
|
•
|
actions
of governmental authorities;
|
|
•
|
domestic
and foreign governmental
regulations;
|
•
|
the
price, availability and acceptance of alternative fuels; and
|
|
•
|
overall
economic conditions.
|
Name
|
Age
|
Position
|
John
King
|
41
|
Chief
Executive Officer and Chief Financial Officer
|
David
Marks
|
39
|
Director
|
Donna
Silverman
|
46
|
Director
|
Name
& Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Non-Qualified Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
John
King, Chief Executive Officer
|
2006
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
and
Chief Financial Officer
|
2005
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Donna
Silverman, former President,
|
2006
|
51,195*
|
0
|
0*
|
0
|
0
|
0
|
0
|
51,195
|
Chief
Executive Officer and Chief
|
2005
|
91,355*
|
0
|
0*
|
0
|
0
|
0
|
0
|
91,355
|
Financial
Officer
|
|||||||||
Name
of Beneficial Owner (1)
|
Common
Stock
Beneficially
Owned
|
Percentage
of
Common
Stock (2)
|
|||||
John
King
|
34,500,000
|
9.75
|
%
|
||||
Donna
Silverman
|
1,617,214
|
0.46
|
%
|
||||
David
Marks SEP IRA(3)
|
40,500,000
|
11.45
|
%
|
||||
Frank
Crivello SEP IRA (4)
|
200,000,000
|
56.54
|
%
|
||||
Senegis
LLC (5)
|
27,710,000
|
7.83
|
%
|
||||
All
officers and directors as a group (3 persons)
|
70,617,214
|
21.66
|
%
|
(1) |
Except
as otherwise indicated, the address of each beneficial owner is c/o
Tech
Laboratories, Inc.
1818
North Farwell Avenue, Milwaukee, Wisconsin 53202.
|
(2) |
Applicable
percentage ownership is based on an assumption of 353,710,210 shares
of
common stock outstanding as of April 20, 2007, assuming full conversion
of
the Preferred Stock, together with other securities exercisable or
convertible into shares of common stock within 60 days of such date
by
each stockholder. Beneficial ownership is determined in accordance
with
the rules of the Securities and Exchange Commission and generally
includes
voting or investment power with respect to securities. Shares of
common
stock that are currently obtainable or obtainable within 60 days
of April
20, 2007 by exercise or conversion of other securities are deemed
to be
beneficially owned by the person holding such securities for the
purpose
of computing the percentage of ownership of such person, but are
not
treated as outstanding for the purpose of computing the percentage
ownership of any other person.
|
(3) |
Of
the shares attributed to Mr. Marks, 3,000,000 shares are registered
in the
name of the Irrevocable Children’s Trust (“ICT”) of which Mr. Marks is a
trustee and 3,000,000 are registered in the name of Phoenix Investors,
LLC
(“Phoenix) of which Mr. Marks is Managing Director.
|
(4) |
Mr.
Crivello is also the managing member of Crivello Group, LLC which
owns
10,000,000 shares of common stock.
|
(5) |
Lyanne
Greystoke has voting and dispositive power with respect to the shares
owned by Senegis LLC
|
2007
|
||||||||||
1st
Quarter
|
$
|
0.035
|
$
|
0.015
|
||||||
2nd
Quarter
|
$
|
0.07
|
(1)
|
$
|
0.015
|
(1)
|
||||
2006
|
||||||||||
1st
Quarter
|
$
|
0.39
|
$
|
0.027
|
||||||
2nd
Quarter
|
$
|
0.198
|
$
|
0.045
|
||||||
3rd
Quarter
|
$
|
0.07
|
$
|
0.03
|
||||||
4th
Quarter
|
$
|
0.135
|
$
|
0.015
|
||||||
2005
|
||||||||||
|
High*
|
Low*
|
||||||||
1st
Quarter
|
$
|
0.63
|
$
|
0.21
|
||||||
2nd
Quarter
|
$
|
0.48
|
$
|
0.24
|
||||||
3rd
Quarter
|
$
|
0.90
|
$
|
0.24
|
||||||
4th
Quarter
|
$
|
0.75
|
$
|
0.18
|
Plan
category
|
Number
of securities
to
be issued upon
exercise
of
outstanding
options,
warrants
and rights
|
Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining
available for future issuance under equity compensation plans (excluding
securities reflected in column (a)
|
(a)
|
(b)
|
(c)
|
|
Equity
compensation plans approved by security holders
|
-0-
|
-0-
|
-0-
|
Equity
compensation plans not approved by security
holders
|
-0-
|
-0-
|
-0-
|
Total
|
-0-
|
-0-
|
-0-
|
·
|
Every
other entity that is a constituent entity (in this case, the Company,
a
New Jersey corporation) merges into the surviving entity (New Company)
and
the separate existence of every entity except the surviving entity
ceases;
|
·
|
The
title to all real estate and other property owned by each merging
constituent entity is vested in the surviving entity without reversion
or
impairment;
|
·
|
The
surviving entity has all of the liabilities of each other constituent
entity;
|
·
|
A
proceeding pending against any constituent entity may be continued
as if
the Migratory Merger had not occurred or the surviving entity may
be
substituted in the proceeding for the entity whose existence has
ceased;
|
·
|
The
stockholders’ interests of each constituent entity that are to be
converted into stockholders’ interests, obligations or other securities of
the surviving or any other entity or into cash or other property
are
converted, and the former holders of the stockholders’ interests are
entitled only to the rights provided in the Certificate of Merger,
Articles of Merger or any created pursuant to Sections 14A:11-1 to
14A:11-3, inclusive, of the NJBCA and Section 262 of the DGCL dealing
with
dissenter’s rights.
|
·
|
No
gain or loss should be recognized by the stockholders of the Company
upon
conversion of their Common Stock into New Lev Common Stock pursuant
to the
change of domicile;
|
·
|
The
aggregate tax basis of the New Lev Common Stock received by each
stockholder of the Company in the change of domicile should be equal
to
the aggregate tax basis of Common Stock converted in exchange therefor;
|
·
|
The
holding period of New Lev Common Stock received by each stockholder
of the
Company in the change of domicile should include the period during
which
the stockholder held his Common Stock converted therefor, provided
such
Common Stock is held by the stockholder as a capital asset on the
effective date of the change of domicile; and
|
·
|
The
Company should not recognize gain or loss for federal income tax
purposes
as a result of the change of domicile.
|
Name
and Address of Beneficial Owner (1)
|
Director/Officer
|
Amount
and Nature of Beneficial Ownership(2)
|
Percentage
of Class(2)
|
John
King
|
Chief
Executive Officer, Chief Financial Officer and Secretary
|
0
|
0%
|
David
Marks
|
Director
|
0
|
0%
|
Donna
Silverman
|
Director
|
1,617,214
|
16%
|
All directors and officers as a group (3 persons)
|
1,617,214
|
16%
|
Page
|
||||
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|||
Carve-Out
Financial Statements as of December 31, 2006 and
for the Years Ended December 31, 2006 and 2005:
|
||||
Balance
Sheet
|
F-2
|
|||
Statements
of Operations
|
F-3
|
|||
Statements
of Owner’s Investment
|
F-4
|
|||
Statements
of Cash Flows
|
F-5
|
|||
Notes
to Carve-Out Financial Statements
|
F-6
|
FUELMEISTER
BUSINESS
(A
Carve-Out Business of Biodiesel Solutions, Inc.
and
a Predecessor Business of Renewal Fuels, Inc.)
BALANCE
SHEET
AS
OF DECEMBER 31, 2006
|
||||
ASSETS
|
||||
Current
assets:
|
||||
Cash
|
$
|
52,626
|
||
Inventories
|
49,769
|
|||
Prepaid
expenses and other current assets
|
22,650
|
|||
Total
current assets
|
125,045
|
|||
Property
and equipment, net
|
32,211
|
|||
Total
assets
|
$
|
157,256
|
||
LIABILITIES
and OWNER’S INVESTMENT
|
||||
Current
liabilities:
|
||||
Accounts
payable
|
$
|
166,680
|
||
Customer
deposits
|
12,224
|
|||
Accrued
employee bonuses
|
30,000
|
|||
Accrued
expenses
|
8,893
|
|||
Total
current liabilities
|
217,797
|
|||
Commitments
and contingencies
|
||||
Owner’s
investment
|
(60,541
|
)
|
||
Total
liabilities and owner’s investment
|
$
|
157,256
|
FUELMEISTER
BUSINESS
(A
Carve-Out Business of Biodiesel Solutions, Inc.
and
a Predecessor Business of Renewal Fuels, Inc.)
STATEMENTS
OF OPERATIONS
FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
|
|||||||
2006
|
2005
|
||||||
Revenue
|
$
|
1,838,156
|
$
|
2,362,418
|
|||
Cost
of goods sold
|
1,182,643
|
1,276,682
|
|||||
Gross
profit
|
655,513
|
1,085,736
|
|||||
Operating
expenses:
|
|||||||
General
and administrative
|
422,421
|
424,449
|
|||||
Employee
compensation
|
209,951
|
248,072
|
|||||
Total
operating expenses
|
632,372
|
672,521
|
|||||
Income
from operations and before
|
|||||||
provision
for income taxes
|
23,141
|
413,215
|
|||||
Provision
for income taxes
|
3,471
|
144,625
|
|||||
Net
income
|
$
|
19,670
|
$
|
268,590
|
FUELMEISTER
BUSINESS
(A
Carve-Out Business of Biodiesel Solutions, Inc.
and
a Predecessor Business of Renewal Fuels, Inc.)
STATEMENTS
OF OWNER’S INVESTMENT
FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
|
||||
Balance
- December 31, 2004
|
$
|
11,548
|
||
Employee
bonus obligation as of June 30, 2005 assumed by owner
|
42,642
|
|||
Employee
bonus obligation as of December 31, 2005 assumed by owner
|
29,215
|
|||
Income
tax obligation assumed by owner
|
144,625
|
|||
Other
distributions to owner, net
|
(202,828
|
)
|
||
Net
income
|
268,590
|
|||
Balance
- December 31, 2005
|
293,792
|
|||
Employee
bonus obligation as of December 31, 2006 assumed by owner
|
32,003
|
|||
Income
tax obligation assumed by owner
|
3,471
|
|||
Other
distributions to owner, net
|
(409,477
|
)
|
||
Net
income
|
19,670
|
|||
Balance
- December 31, 2006
|
$
|
(60,541
|
)
|
FUELMEISTER
BUSINESS
(A
Carve-Out Business of Biodiesel Solutions, Inc.
and
a Predecessor Business of Renewal Fuels, Inc.)
STATEMENTS
OF CASH FLOWS
FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
|
|||||||
2006
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income
|
$
|
19,670
|
$
|
268,590
|
|||
Adjustments
to reconcile net income to net
cash provided by operating activities:
|
|||||||
Depreciation
and amortization
|
11,723
|
3,978
|
|||||
Changes
in assets and liabilities, net:
|
|||||||
Decrease
(increase) in receivables
|
11,198
|
(10,703
|
)
|
||||
Decrease
(increase) in inventories
|
109,470
|
(134,243
|
)
|
||||
Decrease
(increase) in prepaid expenses
|
(15,801
|
)
|
(6,849
|
)
|
|||
Increase
(decrease) in accounts payable
|
14,731
|
89,426
|
|||||
Increase
(decrease) in accrued liabilities
|
15,104
|
23,789
|
|||||
Increase
(decrease) in customer deposits
|
(19,425
|
)
|
31,649
|
||||
Net
cash provided by operating activities
|
146,670
|
265,637
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of property and equipment
|
(2,267
|
)
|
(40,682
|
)
|
|||
Refund
of deposit
|
5,376
|
-
|
|||||
Net
cash provided by (used in) investing activities
|
3,109
|
(40,682
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Bonus
obligations assumed by owner
|
32,003
|
71,857
|
|||||
Income
tax obligations assumed by owner
|
3,471
|
144,625
|
|||||
Distributions
to owner, net
|
(409,477
|
)
|
(202,828
|
)
|
|||
Net
cash provided by (used in) financing activities
|
(374,003
|
)
|
13,654
|
||||
NET
INCREASE (DECREASE) IN CASH
|
(224,224
|
)
|
238,609
|
||||
Cash,
beginning of year
|
276,850
|
38,241
|
|||||
Cash,
end of year
|
$
|
52,626
|
$
|
276,850
|
|||
Supplemental
Disclosure of Non-Cash lnvesting and Financing Activities:
|
|||||||
Interest
paid
|
$
|
-
|
$
|
-
|
|||
Income
taxes paid
|
$
|
-
|
$
|
-
|
|||
|
March
30, 2007
|
||||
Assets
Acquired:
|
||||
Inventories
|
$
|
34,426
|
||
Property
and equipment
|
9,145
|
|||
Order
backlog, customer lists and other intangibles
|
85,150
|
|||
Goodwill
|
365,705
|
|||
Purchase
Price Allocated
|
$
|
494,426
|
Issued
|
Statement
|
|
February
2006
|
FAS
155 - “Accounting for Certain Hybrid Financial Instruments; an amendment
of Financial Accounting Standard Nos. 133 and 140" (“FAS
155”)
|
|
March
2006
|
FAS
156 - “Accounting for Servicing of Financial Assets, an amendment of FASB
Statement No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities”
|
|
June
2006
|
FAS
Interpretation 48 - "Accounting for Uncertainty in Income
Taxes"
|
|
September
2006
|
FAS
157 - “Fair Value Measurements”
|
|
September
2006
|
FAS
158 - “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans” - an amendment of FASB Statements No. 87, 88, 106,
and 132(R)”
|
|
February
2007
|
FAS
159 - “The Fair Value Option for Financial Assets and Financial
Liabilities—Including an amendment of FASB Statement No.
115”
|
|
Year
Ended
December
31,
2006
|
Year
Ended
December
31,
2005
|
||||||
Revenue
|
$
|
-
|
$
|
-
|
|||
Cost
of goods sold
|
-
|
-
|
|||||
Gross
profit
|
-
|
-
|
|||||
Operating
expenses:
|
|||||||
Rent
and utilities
|
131,002
|
-
|
|||||
Employee
costs
|
163,776
|
44,320
|
|||||
Employee
bonuses
|
32,003
|
71,857
|
|||||
Engineering
materials
|
206,684
|
165,816
|
|||||
Depreciation
|
10,946
|
4,560
|
|||||
Other
costs
|
48,564
|
38,223
|
|||||
592,975
|
324,776
|
||||||
Loss
from operations excluded
|
$
|
(592,975
|
)
|
$
|
(324,776
|
)
|
Pro
Forma Adjustments
|
|||||||||||||||||||||||||
|
|
Renewal
Fuels
|
|
Fuelmeister
Business
(predecessor)
|
|
Tech
Laboratories
|
|
Combined
|
|
Note
|
|
Debit
|
|
Credit
|
|
Pro
Forma Combined
|
|||||||||
ASSETS
|
|||||||||||||||||||||||||
Current
assets
|
|||||||||||||||||||||||||
Cash
|
$
|
-
|
$
|
52,626
|
$
|
-
|
A
|
|
52,626
|
||||||||||||||||
B
|
250,000
|
||||||||||||||||||||||||
C
|
250,000
|
||||||||||||||||||||||||
$
|
52,626
|
D
|
207,231
|
$
|
207,231
|
||||||||||||||||||||
Inventories
|
-
|
49,769
|
-
|
49,769
|
49,769
|
||||||||||||||||||||
Deferred
financing fees
|
-
|
9,375
|
9,375
|
9,375
|
|||||||||||||||||||||
Other
current assets
|
-
|
22,650
|
-
|
22,650
|
A
|
22,650
|
-
|
||||||||||||||||||
Total
current assets
|
-
|
125,045
|
9,375
|
134,420
|
457,231
|
325,276
|
266,375
|
||||||||||||||||||
Property
and equipment, net
|
-
|
32,211
|
-
|
32,211
|
A
|
23,066
|
9,145
|
||||||||||||||||||
Deferred
financing fees
|
-
|
D
|
175,000
|
175,000
|
|||||||||||||||||||||
Intangible
assets
|
-
|
-
|
-
|
-
|
C
|
95,000
|
95,000
|
||||||||||||||||||
Goodwill
|
-
|
-
|
-
|
-
|
C
|
359,904
|
359,904
|
||||||||||||||||||
|
|||||||||||||||||||||||||
Total
assets
|
$
|
-
|
$
|
157,256
|
$
|
9,375
|
$
|
166,631
|
$
|
1,087,135
|
$
|
348,342
|
$
|
905,424
|
|||||||||||
|
|||||||||||||||||||||||||
LIABILITIES
and SHAREHOLDERS’ EQUITY
|
|
||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Current
liabilities
|
|
||||||||||||||||||||||||
Litigation
settlement payable
|
204,834
|
204,834
|
E
|
104,834
|
100,000
|
||||||||||||||||||||
Accounts
payable and accrued expenses
|
-
|
213,748
|
153,180
|
366,928
|
A
|
213,748
|
153,180
|
||||||||||||||||||
Warranty
liability
|
-
|
4,049
|
-
|
4,049
|
|
4,049
|
|||||||||||||||||||
Promissory
note payable - Crivello
|
B
|
263,000
|
|||||||||||||||||||||||
-
|
D
|
263,000
|
-
|
||||||||||||||||||||||
Promissory
note payable - asset acquisition
|
C
|
259,769
|
|||||||||||||||||||||||
-
|
D
|
259,769
|
-
|
||||||||||||||||||||||
Convertible
debt - Cornell - accrued interest
|
-
|
-
|
159,431
|
159,431
|
|
159,431
|
|||||||||||||||||||
Convertible
debt - Cornell - existing
|
1,018,025
|
1,018,025
|
|
1,018.025
|
|||||||||||||||||||||
Convertible
debt - other
|
-
|
-
|
172,259
|
172,259
|
|
172,259
|
|||||||||||||||||||
Total
current liabilities
|
-
|
217,797
|
1,707,729
|
1,925,526
|
|
841,351
|
522,769
|
1,606,944
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Convertible
debt - Cornell - additional funding
|
-
|
-
|
-
|
-
|
D
|
1,000,000
|
1,000,000
|
0
|
|||||||||||||||||
Derivative
instrument liabilities
|
|
||||||||||||||||||||||||
Embedded
derivatives - convertible debt
|
-
|
-
|
-
|
-
|
D
|
1,079,153
|
1,079,153
|
||||||||||||||||||
Freestanding
derivatives - warrants
|
-
|
-
|
-
|
-
|
D
|
526,951
|
526,951
|
||||||||||||||||||
|
|||||||||||||||||||||||||
Shareholders’
Equity
|
|
||||||||||||||||||||||||
Common
stock
|
-
|
-
|
100,889
|
100,889
|
100,889
|
||||||||||||||||||||
Preferred
stock
|
-
|
-
|
G
|
3,436
|
3,436
|
||||||||||||||||||||
Additional
paid in capital
|
F
|
1,694,409
|
|||||||||||||||||||||||
G
|
3,436
|
(1,697,845
|
)
|
||||||||||||||||||||||
Retained
earnings
|
B
|
13,000
|
|||||||||||||||||||||||
D
|
40,000
|
||||||||||||||||||||||||
D
|
55,000
|
||||||||||||||||||||||||
D
|
606,104
|
(714,104
|
)
|
||||||||||||||||||||||
Owner’s
investment
|
(60,541
|
)
|
A
|
115,406
|
|||||||||||||||||||||
(60,541
|
)
|
C
|
54,865
|
-
|
|||||||||||||||||||||
Other equity
|
-
|
-
|
(1,799,243
|
)
|
E
|
104,834
|
|||||||||||||||||||
(1,799,243
|
)
|
F
|
1,694,409
|
-
|
|||||||||||||||||||||
Total
Shareholders’ Equity
|
-
|
(60,541
|
)
|
(1,698,354
|
)
|
(1,758,895
|
)
|
2,466,814
|
1,918,085
|
(2,307,624
|
)
|
||||||||||||||
Total
Liabilities and Shareholders’ Equity
|
$
|
-
|
$
|
157,256
|
$
|
9,375
|
$
|
166,631
|
$
|
4,308,165
|
$
|
5,046,958
|
$
|
905,424
|
Pro
Forma Adjustments
|
|||||||||||||||||||||||||
Renewal
Fuels
|
|
Fuelmeister
Business
(predecessor)
|
|
Tech
Laboratories
|
|
Combined
|
|
Notes
|
|
Debit
|
|
Credit
|
|
Pro
Forma Combined
|
|||||||||||
Revenue
|
$
|
-
|
$
|
1,838,156
|
$
|
-
|
$
|
1,838,156
|
$
|
1,838,156
|
|||||||||||||||
Cost
of goods sold
|
-
|
1,178,594
|
-
|
1,178,594
|
H
|
10,415
|
1,189,019
|
||||||||||||||||||
Gross
margin
|
-
|
659,562
|
-
|
659,562
|
10,415
|
-
|
649,147
|
||||||||||||||||||
Operating
expenses:
|
|||||||||||||||||||||||||
Selling,
general & administrative
|
0
|
619,221
|
14,895
|
634,116
|
634,116
|
||||||||||||||||||||
Accounting
and legal fees
|
90,881
|
90,881
|
|
90,881
|
|||||||||||||||||||||
Consulting
fees
|
306,505
|
306,505
|
J
|
306,505
|
-
|
||||||||||||||||||||
Financing
fees
|
72,500
|
72,500
|
I
|
87,500
|
160,000
|
||||||||||||||||||||
Transfer
agent and stock fees
|
0
|
-
|
27,182
|
27,182
|
27,182
|
||||||||||||||||||||
0
|
619,221
|
511,963
|
1,131,184
|
87,500
|
306,505
|
912,179
|
|||||||||||||||||||
Income
from operations
|
0
|
40,341
|
(511,963
|
)
|
(471,622
|
)
|
97,915
|
306,505
|
(263,032
|
)
|
|||||||||||||||
Other
expenses:
|
|||||||||||||||||||||||||
Derivative
financial instrument expense
|
-
|
D
|
606,104
|
606,104
|
|||||||||||||||||||||
Interest
expense - Cornell - existing debt
|
0
|
-
|
127,327
|
127,327
|
127,327
|
||||||||||||||||||||
Interest
expense - Cornell - additional debt
|
I
|
53,000
|
53,000
|
||||||||||||||||||||||
Interest
expense - Cornell - other
|
18,728
|
18,728
|
18,728
|
||||||||||||||||||||||
Interest
income
|
0
|
-
|
(710
|
)
|
(710
|
)
|
K
|
20,723
|
(21,433
|
)
|
|||||||||||||||
0
|
-
|
145,345
|
145,345
|
659,104
|
20,723
|
783,726
|
|||||||||||||||||||
Income
(loss) before income taxes
|
0
|
40,341
|
(657,308
|
)
|
(616,967
|
)
|
757,019
|
327,228
|
(1,046,758
|
)
|
|||||||||||||||
Income
tax expense
|
0
|
2,700
|
1,000
|
3,700
|
3,700
|
||||||||||||||||||||
Net
income (loss)
|
$
|
0
|
$
|
37,641
|
$
|
(658,308
|
)
|
$
|
(620,667
|
)
|
$
|
757,019
|
$
|
327,228
|
$
|
(1,050,458
|
)
|
||||||||
Earnings
per share:
|
|||||||||||||||||||||||||
Shares
outstanding:
|
|||||||||||||||||||||||||
Basic
|
6,702,639
|
6,702,639
|
|||||||||||||||||||||||
Fully
diluted
|
6,702,639
|
361,610,000
|
368,312,639
|
||||||||||||||||||||||
Earnings
(loss) per share:
|
|||||||||||||||||||||||||
Basic
|
$
|
(0.10
|
)
|
$
|
(0.16
|
)
|
|||||||||||||||||||
Fully
diluted
|
$
|
(0.10
|
)
|
$
|
(0.16
|
)
|
·
|
our
merger and reorganization as a result of the April 20, 2007 acquisition
of
Renewal Fuels, Inc. (“Renewal”), which has been accounted for as a reverse
merger, in which we are the legal acquirer but for which Renewal
is deemed
to be the accounting acquirer;
|
·
|
the
March 30, 2007 acquisition by Renewal of the assets of the Fuelmeister
business (the “FuelMeister Business’) of Biodiesel Solutions Inc.
(“Biodiesel”);
|
·
|
additional
debt financing provided by Cornell Capital Partners LP (“Cornell”), the
proceeds of which were used in part to fund Renewal’s acquisition of the
assets of the FuelMeister Business;
|
·
|
the
continuation of our existing debt obligations to
Cornell;
|
·
|
the
re-negotiation of certain of our outstanding liabilities
and,
|
·
|
other
related pro forma adjustments,
|
A. |
To
eliminate from the FuelMeister financial statements those assets
and
liabilities which were not acquired as part of the asset acquisition
of
the Fuelmeister Business and which were retained by
Biodiesel.
|
Dr.
|
|
Cr.
|
|||||
Cash
|
$
|
52,626
|
|||||
Other
current assets
|
22,650
|
||||||
Fixed
assets
|
23,066
|
||||||
Accounts
payable
|
$
|
213,748
|
|||||
Owner’s
investment - net assets not acquired
|
$
|
115,406
|
|||||
$
|
213,748
|
$
|
213,748
|
B. |
To
recognize funds advanced to Renewal by Crivello, to fund downpayments
for
the asset acquisition of the Fuelmeister Business and for miscellaneous
initial expenses.
|
Dr.
|
|
Cr.
|
|||||
Cash
|
$
|
250,000
|
|||||
Promissory
note payable to Crivello
|
$
|
263,000
|
|||||
Initial
expenses
|
13,000
|
||||||
$
|
263,000
|
$
|
263,000
|
C. |
To
record the acquisition for cash of certain of the assets and
liabilities
of the Fuelmeister Business of Biodiesel, excluding related transaction
costs. The agreed acquisition cost was $500,000, plus or minus
the amount
by which inventory at the acquisition date exceeded, or was below,
$40,000. For purposes of the pro formas, the acquisition cost
is deemed to
be $509,769, based on the inventory of the FuelMeister Business
on
December 31, 2006. The actual acquisition cost was $494,426,
based on the
inventory of the FuelMeister Business on the closing date of
March 30,
2007.
|
Dr.
|
Cr.
|
||||||
Cash
($500,000 + inventory in excess of $40,000, less promissory note
payable
to seller)
|
250,000
|
||||||
Promissory
note payable to seller
|
259,769
|
||||||
Owner’s
investment (representing Inventory - $49,769 + Fixed assets -
$9,145, less
Warranty liability assumed - $4,049)
|
$
|
54,865
|
|||||
Intangible
assets
|
95,000
|
||||||
Goodwill
|
359,904
|
||||||
$
|
509,769
|
$
|
509,769
|
D. |
To
record the issuance of $1,000,000 convertible debentures and
18,000,000
common stock warrants issued to Cornell, net of financing and
other fees
and repayment of promissory notes, the proceeds of which were
used to fund
the acquisition of the assets of the FuelMeister Business of
Biodiesel.
|
Dr.
|
|
Cr.
|
|||||
Cash
|
$
|
207,231
|
|||||
Deferred
financing fees
|
175,000
|
||||||
Repayment
of promissory note payable to seller
|
259,769
|
||||||
Repayment
of promissory note payable to Crivello
|
263,000
|
||||||
Legal
fees - merger
|
40,000
|
||||||
Other
fees - merger
|
55,000
|
||||||
Convertible
long-term debt - face amount
|
$
|
1,000,000
|
|||||
Convertible
long-term debt - discount
|
1,000,000
|
||||||
Derivative
instruments liability - embedded derivatives
|
1,079,153
|
||||||
Derivative
instruments liability - freestanding warrants
|
526,951
|
||||||
Initial
charge to income for fair value of derivative instruments in
excess of
proceeds received
|
606,104
|
||||||
$
|
2,606,104
|
$
|
2,606,104
|
E. |
To
record adjustment to fair value of certain Tech Laboratories’ liabilities
assumed by Renewal, to recognize the negotiated settlement for
$100,000 of
an outstanding claim for $204,834.
|
Dr.
|
|
Cr.
|
|||||
Accounts
payable
|
$
|
104,834
|
|||||
Other
equity
|
$
|
104,834
|
|||||
$
|
104,834
|
$
|
104,834
|
F. |
To
recognize the net liabilities assumed by Renewal on the reverse
acquisition of Tech Laboratories.
|
Dr.
|
Cr.
|
||||||
Litigation
settlement payable
|
$
|
100,000
|
|||||
Accounts
payable
|
153,180
|
||||||
Accrued
interest - Cornell
|
159,431
|
||||||
Convertible
debt - Cornell
|
1,018,025
|
||||||
Convertible
debt - other
|
172,259
|
||||||
Share
capital
|
100,889
|
||||||
Deferred
financing fees
|
(9,375
|
)
|
|||||
Retained
deficit eliminated
|
1,694,409
|
||||||
Charge
to additional paid in capital for fair value of net liabilities
assumed by
Renewal on acquisition of Tech Laboratories
|
1,694,409
|
||||||
$
|
1,694,409
|
$
|
1,694,409
|
G. |
To
record the issuance of 343,610 shares of series A convertible
preferred
stock in exchange for all outstanding common stock of
Renewal.
|
Dr.
|
|
Cr.
|
|||||
Preferred
stock, $0.01 par value
|
$
|
3,436
|
|||||
Additional
paid in capital
|
$
|
3,436
|
|||||
$
|
3,436
|
$
|
3,436
|
H. |
To
record the depreciation and amortization of acquired property
and
equipment and intangible assets for the year ended December 31,
2006.
|
Dr.
|
Cr.
|
||||||
Property
and equipment - assumed 10 year life
|
915
|
||||||
Intangible
assets - assumed 10 year life
|
9,500
|
||||||
Cost
of goods sold - depreciation & amortization expense
|
$
|
10,415
|
|||||
$
|
10,415
|
$
|
10,415
|
I. |
To
record interest expense on the 11% (prime + 2.75%) $1,000,000
convertible
debt financing provided by Cornell and amortization of debt discount
on an
effective interest method, and amortization of deferred financing
fees on
a straightline basis, for the year ended December 31,
2006.
|
Dr.
|
Cr.
|
||||||
Interest
expense - effective interest, including discount
amortization
|
$
|
53,000
|
|||||
Deferred
financing fees - amortization
|
87,500
|
||||||
$
|
140,500
|
-
|
Dr.
|
Cr.
|
||||||
Consulting
fees
|
$
|
306,505
|
|||||
Other
|
0
|
||||||
-
|
$
|
306,505
|
K. |
To
record estimated interest income at an assumed rate of 10% p.a.
on net
proceeds of $207,231 available from additional Cornell debt proceeds
($1,000,000, net of financing and other fees paid ($270,000),
repayment of
promissory notes used to fund the cash payments for the acquisition
of the
FuelMeister Business ($263,000) and liquidation of the promissory
note
issued for the acquisition
($259,769).
|
Dr.
|
Cr.
|
||||||
Interest
income
|
$
|
20,723
|
|||||
-
|
$
|
20,723
|
L. |
For
the purposes of pro forma earnings per share for the year ended
December
31, 2006, the number of fully diluted shares outstanding is assumed
to be
increased by 343,610,000 common shares issuable on conversion
of the
series A preferred stock and by 18,000,000 common stock warrants
issued to
Cornell. However, because there is a pro forma net loss for the
year, such
assumed issuances are anti-dilutive and are not recognized in
the
calculation of fully diluted pro forma earnings per
share.
|
Exhibit
A
|
Agreement
and Plan of Merger
|
Exhibit B | 14A:11-1 to 14A:11-3 of the New Jersey Business Corporation Act |
By
Order of the Board of Directors
|
||||
/s/ John
King
John
King
Secretary
|