Waste Industry

[gamood]

I haven't read through the filings in a thorough manner yet. However, something came to mind as I was reading the ongoing litigation's the company finds itself involved in, what a perfect platform iHub would offer to Harvey Blonder, Gary Goldstein, and Robin Bailey.

"Table of Contents


The Company became aware that one of the shareholders of Brownies Waste Water Solutions, Inc., Gary Goldstein, prior to the acquisition, allegedly misappropriated $15,000 of the Company’s funds (the “Funds”) by attempting to transfer or pass through funds of an unrelated bankrupt company through the Company’s bank accounts to disguise them as services Brownies was to perform when in fact it was an attempt to disguise it as legal services for the shareholder. The Company contacted Bank of America who was the single largest creditor in the unrelated bankrupt company and returned the funds to the bankruptcy court. The Company contacted the Bankruptcy Trustees Office as to the action of the shareholder and they are investigating the shareholder to determine the next course of action. The Company is investigating the accounting records to determine if there are additional improprieties prior to the purchase of Brownies. If the Company finds additional improprieties, the Company will contact the proper regulatory authorities.

The Company became aware the sellers of Brownies failed to disclose in the Asset Purchase Agreement additional liabilities of $89,000; which included an outstanding invoice of $21,000 for required cleanup in Orange County, Florida, $18,000 of unpaid personal property taxes, and $57,000 owed to Shelley Septic, Inc. The Company is investigating if there are any additional undisclosed liabilities in the acquisition of Brownies and has sought legal counsel to determine the next course of action.

Mr. Borish and companies under his control personally forgave the following debt and other liabilities to consummate the acquisition of Brownies Waste Water Solution, Inc. on July 17, 2010:

Notes Payable Shareholder
$ 405,819
Notes Payable Resort Marketing
84,300
Accrued Interest
181,266
Accounts Payable
89,421
Visa RBC Centura 1702
5,934
RBC Centura 1694
7,079
Accrued Interest
362.
Accrued Compensation-CEO
368,183
Accrued Payroll – CEO
99,717
Advances by Shareholders
5,075
Total Debt Forgiven and Recognized as Additional Paid-In Capital in the Accompanying Consolidated Financial Statements
$ 1,247,155

The Company is a Defendant in a pending litigation with Harvey Blonder, Gary Goldstein, and Robin Bailey v. Freedom Environmental Services, Inc., and Michael Borish, individually. This case is pending in the Circuit Court of the Ninth Judicial Circuit, in and for Orange County, Florida, Case No. 2010-CA-026477-0 related to the acquisition of Brownies Waste Water Solutions in July 17, 2010. The Original Complaint was dismissed on a Motion to Dismiss Failure to State a Claim and the Court allowed the Plaintiffs to file an Amended Complaint. The Amended Complaint was filed on June 3, 2011 which alleges – Declaratory Relief, Fraudulent Inducement to Enter a Contract, Negligent Misrepresentation, Breach of Contract Warranties, Accounting, and Rescission of Purchase Agreement. The Company considered this litigation frivolous and vehemently denies all allegations. The case in pending in State Court and the Company is vigorously litigating this case.

On January 1, 2011 the Company entered into a one year yellow grease purchase agreement with Delta Integrated Industries LLC ("Delta"). In that agreement the Company agreed to sell fifty thousand gallons of yellow grease per month to Delta. This agreement was voided as Delta submitted a check for $67,000 that was drawn on an account with insufficient funds. Delta has filed a Complaint related to this voided agreement but has never served the summons on the Company which makes the Complaint invalid and the Company believes it will ultimately be dismissed by the Court for lack of service."

http://www.secinfo.com/d1C3V5.q4d.htm#c3h1