Global Environmental Energy Corp

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Whatever happened to the Nathaniel Energy machine? Does McCormack still have it?

NATHANIEL ENERGY CORP filed this 10KSB/A on 05/15/2003
13. Commitments and Contingencies

Nathaniel Europe Limited

On December 10, 1999, the Company entered into an agreement with McCormack
consultants ("MCC") to form an Irish based company to be known as Nathaniel
Europe Limited ("NEL"). Under the terms of the agreement, the Company was
required to contribute to NEL a thermal combustor capable of processing 500,000
tons of solid waste material per year. In addition, the Company was required to
provide NEL with a cash investment of $350,000 and assign rights to the use of
its technology for Ireland and the United Kingdom.

In exchange for the above plus the issuance of additional shares to equal 20% of
shares of the Company (2,560,614 shares of common stock as of December 31,
1999), the Company was to receive 20% of the initially issued shares of NEL, as
well as 40% of the net revenues of NEC for the first 24 months of the
operations. Subsequent to December 10, 1999, MCC assigned its interest in the
contract to Life Energy Corporation. NEC takes the position that such assignment
became invalid because of the non-compliance of performance on the part of MCC.

Between February 2000 and December 2000, the Company purchased a combustor from
its president and two unrelated individuals for $200,000 and expended an
additional $300,000 to ready it for use in the NEL arrangement. This equipment
was shipped to Ireland in May 2001, and the Company conducted several
demonstrations of the combustor. After a series of disagreements as to the
responsibilities of each of the parties to NEL agreement, Life Energy
Corporation notified the Company that they considered the Company to be in
violation of several provisions of that agreement. On July 18, 2000 and again on
October 6, 2000 Nathaniel Energy Corporation's attorney notified McCormack and
Consultants that the agreement dated December 10, 1999 between Nathaniel Energy
Corporation and McCormack Consultants was invalid and non-enforceable due to
fraudulent misrepresentations on the part of McCormack and non-performance on
the terms of the agreement. Nathaniel Energy's counsel demanded the return of
the Nathaniel Combustor and properties that were being unlawfully held by
McCormack et al. On October 23, 2000 McCormack's attorney wrote a letter to
Nathaniel Energy Corporation's attorneys admitting McCormack was holding
Nathaniel Energy Corporation's Combustor and ancillary equipment until Nathaniel
Energy Corporation paid an amount of money demanded by McCormack. Nathaniel
Energy disputes this claim. On December 31, 2001, Life Energy Corporation is
maintaining physical possession of the combustor equipment in Ireland. The
Company has investigated its options for reclaiming the equipment, and intends
to vigorously contest Life Energy's claims. The likelihood of successful
recovery of the combustor equipment and the extent of potential damage to its
condition cannot be determined at this time. The accompanying financial
statements for the year ended December 31, 2001 include a charge to operations
of approximately $470,000 to reflect this uncertainty, representing a charge off
of the net carrying value of this combustor equipment.