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Planet Resource Recovery, Inc.
(A Development Stage Company)
Balance Sheet
As of March 31, 2007 and December 31, 2006
As of As of
March 31, December 31,
2007 2006
Assets
Current assets
Cash & marketable securities 55,932 -
Inventory 8,198 -
Total current assets 64,129 -
Property & equipment 231,903 -
Goodwill 71,179 -
Total assets $ 367,211 $ -
Liabilities
Current liabilities
Accounts payable $ 48,755 $ -
Non-current liabilities
Note payable - shareholders 619,242 364,708
Note payable - other 38,340 0
Total non-current liabilities 657,582 364,708
Total liabilities $ 706,337 $ 364,708
Shareholders' Equity
Preferred Stock, 10% Cumulative, Non-voting, $ - $ -
10,000,000 Shares auhtorized and none issued
Common stock 450,000,000 shares authorized at No Par Value, $ 173,394 $ 98,808
78,945,259 issued and outstanding at March 31, 2007;
150,292,274 issued and outstanding at December 31, 2006
Additional paid in capital 1,479,618 1,434,635
Retained earnings/(deficit) (1,992,138) (1,898,151)
Total stockholders' equity $ (339,126) $ (364,708)
Total Liabilities & Stockholders' Equity $ 367,211 $ -
(See Accountant's Compilation Report)
Planet Resource Recovery, Inc.
(A Development Stage Company)
Statement of Operations
For the Quarter Ended March 31, 2007, and
the Year Ended December 31, 2006
Quarter Ended Year Ended
March 31, December 31,
2007 2006
Revenue
Licensing fees $ 20,000 $ -
Expenses
Advertising 7,030
Automobile 339
Consulting fees 1,145 250,000
Contract labor 65,044
Dues & subscriptions 857
Licenses & permits 1,779
Meals & entertainment 363
Miscellaneous 79
Postage & delivery 830
Professional fees 3,515 29,782
Rent 8,689
Repairs & maintenance 88
Supplies 595
Telephone 1,278
Travel 3,495
Transfer agent fees 12,629
Utilities 2,308
Interest 3,924 8,900
Total Expenses $ 113,987 $ 288,682
Net income/(loss) $ (93,987) $ (288,682)
(See Accountant's Compilation Report)
Planet Resource Recovery, Inc.
(A Development Stage Company)
Statement of Shareholders' Equity
From January 1, 2006 to March 31, 2007
Total
Preferred Stock Common Stock Additional Accumulated Stockholder's
Shares Amount Shares Amount Paid-in Capital Deficit Equity/(Deficit)
Ending (Deficit) Balance January 1, 2006 - $ - 69,026,384 $ 69,026 $ 1,434,635 $ (1,609,469) $ (105,808)
Reverse (1 share for 50) Split, January 3, 2006 1,380,930 $ -
Adjusted for fractional shares
Issuance of Common Stock for Services 5,000,000 $ 1,000 $ 1,000
Issuance of Common to Officers & Directors
for services rendered 143,911,344 $ 28,782 $ 28,782
Net loss for Period $ (288,682) $ (288,682)
Balance - December 31, 2006 - $ - 150,292,274 $ 98,808 $ 1,434,635 $ (1,898,151) $ (364,708)
Issuance of Common Stock to Shareholders of 74,469,102 $ 74,469 $ 74,469
Planet Resource Recovery Corporation
Cancellation of shares previously issued (142,911,344)
to Officers & Directors
Common shares purchased 117,000 $ 117 $ 44,983 $ 45,100
Net loss for Period $ (93,987) $ (93,987)
Balance - March 31, 2007 - $ - 81,967,032 $ 173,394 $ 1,479,618 $ (1,992,138) $ (339,126)
(See Accountant's Compilation Report)
Planet Resource Recovery, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Quarter Ended March 31, 2007, and
the Year Ended December 31, 2006
Quarter Ended Year Ended
March 31, December 31,
2007 2006
Cash flows from Operating Activities
Net loss $ (93,987) $ (288,682)
Adjustments to reconcile net income to
net cash provided by operating activities
(Increase) in Inventory (8,198)
Increase in accounts payable 48,755
Increase in note payable to shareholder 258,900
Net Cash Used by Operating Activities (53,430) (29,782)
Cash Flows From Investing Activities
Acquisition of equipment (231,903)
Net Cash Used by Investing Activities (231,903) 0
Cash flows from Financing Activities
Capital contributions 48,390 29,782
Proceeds from notes due to Shareholders 254,534
Proceeds from notes due to Others 38,340
Net Cash Used by Financing Activities 341,264 29,782
Net Increase/(Decrease) In Cash 55,932 0
Cash at Beginning of Period 0 0
Cash at End of Period 55,932 0
(See Accountant's Compilation Report)
Planet Resource Recovery, Inc. and subsidiary
(a development stage company)
Notes to Consolidated Interim Financial Statements
1. Summary of Significant Accounting Policies
Basis of Presentation
Planet Resource Recovery, Inc. (the Company) formerly named American Biodiesel Fuels Corp.,
a Nevada corporation, was formed on September 19, 1996. The accompanying financial
statements and related footnotes of the Company are presented in U.S. dollars and have been
prepared in accordance with accounting principles generally accepted in the United States of
America. The Company is in the development stage and, to date, the Company's principal
activities have included raising capital through common stock issuances and debt financing to fund
research and development activities and construction of its production facility. The Company's
fiscal year-end is December 31.
On February 15, 2007, the Company, as American Biodiesel Fuels Corp. issued 74,469,102 shares
in exchange for the assets and liabilities of Planet Resource Recovery, Inc., a private Nevada
corporation. The accompanying financial statements do not reflect the operations of the
subsidiary company through December 31, 2006. They do reflect the operations of the subsidiary
company for the three months ended March 31, 2007. Subsequent to the issuance of stock in
exchange for the assets and liabilities of the private company, American Biodiesel Fuels Corp.
changed its name to Planet Resource Recovery, Inc.
These interim consolidated financial statements have been prepared for the quarter ended March
31, 2007 and the year ended December 31, 2006, based upon the principles of Accounting
Principles Board (APB) #28, "Interim Financial Reporting". The interim period financial
information presented in these financial statements are unaudited and include all known accruals
and adjustments that, in the opinion of management, are necessary for a fair presentation of the
financial position of the Company and its results of operations and cash flows for such periods. All
such adjustments are of a normal and recurring nature. Results of operation for the interim periods
presented are not necessarily indicative of operating results for the full year or any future periods.
Use of Certain Significant Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of certain assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the related reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.
Management believes that its estimates are reasonable.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents. Cash and cash equivalents include cash on hand, demand
deposits with banks, and all highly liquid investments with original maturities of three months or
less. The Company's cash, cash equivalents, and short-term investments are subject to potential
credit risk. The Company's cash management and investment policies restrict investments to
low-risk, highly liquid securities.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash equivalents, receivables, payables,
and debt. The Company believes that the carrying values of cash and cash equivalents, receivables
and payables on the accompanying consolidated balance sheet approximate their fair values due to
the short-term maturity of these financial instruments.
Property and Equipment
Property and equipment are valued at historical cost. Additions and improvements to the assets
under construction are capitalized. Property and equipment consist primarily of the production
facility. Since the production facility has not produced significant commercial quantities, no
depreciation is being applied to the equipment as of March 31, 2007. Equipment and facilities will
be depreciated using the straight-line method over the estimated remaining useful lives as of the
in-service date or date of materially significant quantities of the product. Estimated useful lives of
the Company's equipment are expected to range from three five years.
Scheduled maintenance of equipment and overhauls will be performed on the basis of number of
hours operated in accordance with the Company's preventative maintenance program. Repair and
maintenance costs will generally be charged to expense as incurred; however, overhauls related to
large-scale maintenance projects will be deferred when incurred and amortized over the estimated
useful life.
Impairment of Long-Lived Assets
In compliance with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets, the recoverability of the carrying values of
property and equipment will be assessed at a minimum annually or whenever, in management's
judgment, events or changes in circumstances indicate that the carrying value of such assets may
not be recoverable based on estimated future cash flows. If this assessment indicates that the
carrying value will not be recoverable, as determined based on undiscounted cash flows over the
remaining useful lives, an impairment loss will be recognized. The impairment loss will equal the
excess of the carrying value over the fair value of the asset. The fair value of the asset will be based
on prices of similar assets, if available, or discounted cash flows.
Income Taxes
The Company follows the liability method of accounting for income taxes in accordance with
SFAS No. 109, Accounting for Income Taxes. Under this method, deferred income taxes are
recorded based upon the differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be in effect when the
underlying assets or liabilities are recovered or settled. Due to the nature of the operations to date,
the Company has recognized no deferred tax asset or liability.
Receivables and Concentration of Credit Risk, Concentration of Suppliers
Based on the nature of its potential customer base, the Company does not believe that it will have
any significant concentrations of credit risk other than its concentration in the oil and gas industry.
The Company will evaluate the creditworthiness of its customers' financial condition.
Allowances for Doubtful Accounts
The Company will maintain allowances for doubtful accounts for estimated losses resulting from
the inability of the Company's customers to make required payments. If a trade receivable is
deemed to be uncollectible, such receivable will be charged off against the allowance for doubtful
accounts. The Company will consider the following factors when determining if collection of
revenue is reasonably assured: customer creditworthiness, past transaction history with the
customer, current economic industry trends, and changes in customer payment terms. If the
Company has no previous experience with the customer, the Company will typically obtain reports
from various credit organizations to ensure that the customer has a history of paying its creditors.
The Company may also request financial information, including financial statements or other
documents, to ensure that the customer has the means of making payment. If these factors do not
indicate collection is reasonably assured, the Company would require a prepayment or other
arrangement to support revenue recognition and recording of a trade receivable.
Insurance
Prepaid insurance is amortized over the terms of the Company's insurance policies.
2. Commitments and Contingencies
Rental expense for the Company's office lease was $5,000, for the year ended December 31, 2006
and $7,500 for the three months ended March 31, 2007. Minimum annual lease payments under
this lease for the years ending 2007, 2008 and 2009 are $30,000 per year.
3. Restricted Stock
Outstanding shares include restricted stock issued and outstanding. Restricted stock issuances are
registered with the Company's stock registrar and these shares include voting and dividend rights.
4. Related Party Transaction
The Chief Executive Officer of the company has made cash contributions to the Company in
exchange for a note payable at a fixed interest rate of 7.5%. The balance due on the note was
$619,242 and $364,708 as of March 31, 2007, and December 31, 2006 respectively.
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