Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes ☒ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Ex-change Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. On June 30th, 2021, the aggregate market value of the voting stock of Transact Energy Corp. held by non-affiliates of the registrant was $2,588,049.
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of December 31, 2021, we had issued and outstanding 61,630,907 shares common stock, $.001 par value.
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None
PART I
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this Annual Report on Form 10-K may not be historical facts and may be “forward-looking statements.” Such forward-looking statements can be identified by, among other things, the use of forward-looking terminology such as “believes,” “intends,” “plan” “expects,” “may,” “will,” “should,” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, and similar expressions are intended to identify forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements, or industry results, expressed or implied by such forward-looking statements. Such forward-looking statements appear in Item 1 - “Business” and Item 7 - “Management's Discussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Annual Report and include statements regarding the following: the expected development and potential benefits from our products to consumers, progress in our efforts to develop our facilities and our products and to achieve and maintain regulatory approvals, the potential market demand for our products, our expectations regarding our short- and long-term capital requirements, our outlook for the coming months and information with respect to any other plans and strategies for our business.
The factors discussed herein, including those risks described in Item 1, and expressed from time to time in our filings with the Securities and Exchange Commission could cause actual results and developments to be materially different from those expressed in or implied by such statements. The forward-looking statements are made only as of the date of this filing, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
INTRODUCTION
Unless otherwise specified or required by context, as used in this annual report, the terms “we,” “our,” “us” and the “Company” refer collectively to (i) TransAct Energy Corp., a Nevada corporation (“TransAct”).
The Company's current corporate structure results from the issuance of founding shares equal to nine million four hundred thousand (9,400,000), an initial public offering (IPO) of one million one hundred and two thousand shares (1,102,000) at twenty-five cents ($0.25), the acquisition of a technology asset of two million six hundred thousand shares (2,600,000) and forty-eight million five hundred and twenty-eight thousand, nine-hundred and seven (48,528,907) shares for operations (including consulting, management and debt settlement).
The Company was originally formed to manage energy related assets and has changed its scope to sustainable technology development. The Company incorporates new technologies to provide sustainable energy sources and products. It has now focused completely on an Industry 4.0 manufacturing facility producing commodities from municipal solid waste without emissions utilizing sustainable energy sources.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP) by management.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
Item 1. Business.
Our History and Business
Our business is to use sustainable technology to produce sustainable products. TransAct Energy Corp has transitioned from its original focus of developing raw energy resources to manufacturing using solid waste as an above ground resource/asset.
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We formed TransAct Energy Corp. as a Nevada corporation on March 15, 2006. Although our business plan called for the securing and managing of any energy leasehold, the Company focused on securing producing and non-producing oil and gas leases in Alberta, Canada. On September 7, 2006, we acquired a one hundred percent (100%) interest in a Petroleum and Natural Gas Lease, from the province of Alberta, Canada for twelve thousand and fifty-one dollars ($12,051), the MedHat Project. We did not develop this resource. We looked to expand our holdings in Alberta through acquisitions and joint ventures for the following two years. We have since allowed this lease to lapse and moved away from this focus.
In 2008, the Company was introduced to geothermal power projects in British Columbia, Canada. We worked with companies Aqua Terra Power and Aqua Terra Geothermal through the balance of 2009 on the two geothermal power projects in British Columbia. Other than lending Aqua Terra funds; no formal arrangement was entered pending them securing drill permits on the two projects. The licenses associated with these projects lapsed and were acquired by a different corporation. We entered discussions with this entity in the latter half of 2011 to form a Farm-in relationship. We have put these discussions on hold pending the completion of our first waste optimization plant although we are maintaining dialogue with its principals as it relates to utilizing Geothermal in the plants themselves.
TransAct in mid-2009 started introducing the concept of geothermal power to markets in Western and South Asia with the plan to enter joint venture relationships to develop geothermal power projects in these areas. To enter these markets as a power producer, the Company found it strategic to add the development of traditional carbon fueled power projects. After discussions with Spectrum Energy Project Investments (a UAE power company), we submitted applications to the Basra Investment Commission to develop/manage three natural gas power plants. These multi-billion-dollar projects came with long-term power purchase agreements (PPA) and sovereign guarantees and our application through Spectrum was shortlisted. We were unsuccessful in completing our acquisition of 50% of Spectrum and the initial offering lapsed.
On August 31, 2009, TransAct Energy completed and closed its initial public offering at twenty-five cents ($0.25) per share selling one million one hundred and two thousand shares (1,102,000) for a total capital raise of two-hundred and seventy-four thousand three hundred and ninety-eight dollars ($274,398 USD). Most of these funds were placed with Aqua Terra Power as convertible notes to secure and develop the four (4) geothermal licenses in British Columbia, Canada; the balance was used to pay the costs of the offering and a small amount went to working capital. The Company was approved for listing on the OTCBB in December 2009 and received the trading symbol “TEGY.”
Throughout 2010 we laid the groundwork for large power projects in South Europe, Asia and Africa, smaller projects for solar, waste to energy and hydrogen fuel cells specifically in India. We worked to secure markets for geothermal, new solar photo-voltaic, waste to energy and hydrogen fuel cell generators.
Joint development agreement negotiations took place in December 2010 clearing the way for Transact to enter one major project in Southeast Asia in 2011. The 2011 year was frustrated with the company’s inability to collect raised or earned funds into the company’s bank account. Thus projects, joint ventures and previous efforts were postponed or lost permanently. While we did maintain the company’s trading status, the year was taken up with collection efforts and supporting business relationships while in limbo. We did initiate discussions on new waste to energy technologies to leverage the work we had done previously in this sector.
The Company’s 2012 efforts were focused on building out a Waste Optimization division. We completed a Business Plan for this division and entered a Joint Development Agreement with the owners of a small scale, proprietary, zero emissions waste optimization plant (“ZEWOPtm”) that had been operating a 20 tonne per day plant for two years. We reconnected with clients in India and Brazil for future waste optimization opportunities. From the second quarter, through to the end of 2012 we worked to raise the necessary funds to build a municipal scale plant (1000+ tonnes per day) in Scotland.
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2013 continued as a building year for both the company and its Waste Optimization division. We completed the acquisition of the ZEWOPtm technology from the Scottish Inventor and brought him on as a long-term member of our team. We successfully negotiated a relationship with the international firm Fichtner Consulting Engineers to complete the certification of our plants going forward. We identified suppliers of feedstock for the proposed United Kingdom plants, initiated the relationships for the uptake of any Synthetic Gas and Electricity(neither are part of our product mix now) in the United Kingdom and tentatively sourced the capital required for the first plant in the United Kingdom. Globally we negotiated the intent to build a plant in Mexico that includes the required equity and feedstock. In Brazil, we initiated a relationship to create a green energy fund to grow both the market in Brazil and the other strategic areas of South America. Initial talks have taken place with potential development partners for a few of the major Brazil markets pending the success of the Mexico plant.
Throughout 2014 TransAct worked to finalize the engineering review and agreements necessary to develop the first ZEWOPtm in Puebla, Mexico. The plant under design is capable of processing 1320 metric tons per day of Municipal Solid Waste (“MSW”) and is estimated to cost approximately three hundred million dollars. In late November Fichtner Consulting Engineers reported they believed the ZEWOPtm could process the MSW 100% into useable products without emissions. The Fichtner report provided TransAct the opportunity to submit the Waste Supply Agreement to the Municipality of Puebla, prepare off-take agreements for interested buyers of the ZEWOPtm products and formalize the share purchase agreement with the Puebla Waste Consortium (“PWC”). PWC intended on providing 30% of the capital required to build the ZEWOPtm, while TransAct negotiates third party lenders for the remaining 70% of the cost through debt instruments.
The Company delivered the results of the Fichtner Report to the Puebla City Staff in December of 2014. The cost of the plant was more than originally discussed because it included MSW pre-processing and dewatering component. This affected the required equity and although it was never stated, appears to be cause of the PWC hesitation. We also found out subsequently that there was legal wrangling and back room negotiations between the existing MSW concession holders and the municipal/state government, affecting their ability to sign with us. After 6 months with no movement forward for the MSW feedstock from the City of Puebla, Management set out in 2015 to secure an alternate source of MSW. The agreement we had with the Puebla Waste Consortium was terminated, however, the sales efforts were all to National/International companies whose interest in our products will not change with a change in location.
Because of the specialized nature of many of the ZEWOPtm components, we initiated some of the equipment procurement; thus, we entered a design/supply agreement for our proprietary reactors with a specialized engineering firm.
2014 saw the Company form subsidiary corporations in Ireland and Mexico. In Ireland we established the wholly owned subsidiary “TransAct Energy Global Limited”, this company will in turn wholly own each national subsidiary. The first national subsidiary of TransAct Global is “TransAct Energy Mexico S.DE R.L. DE C.V.” which will own a majority shareholding of each holding company that owns a ZEWOPtm like the Mexican corporation “Puebla ZEWOP 1, S. DE R.L. DE C.V.”.
At the beginning of 2015 we focused on finalizing the sale of the anticipated ZEWOPtm products. These efforts included getting signed letters of intent from qualified buyers and preparing formal legal agreements for the same. We now have letters of intent from multiple qualified buyers for all the expected product and agreements ready to be signed subject to us finalizing our feed-stock agreement (Waste Supply Agreement) for the first plant.
In summary 2015’s efforts focused on completing the due-diligence for the Mexican candidate feedstocks including matching equity partners and buyers of the resulting products. To that end, we now have several feedstock agreements to negotiate through to a final agreement or dismiss depending on the outcome of the negotiations. The potential equity partners have been identified subject to finalizing the feedstock agreement and pre-sales of the future products. The clients that signed letters of intent for the products have also been briefed on the potential feedstock cities to confirm their commitment. Every effort was made during the year to keep the candidate banks for debt financing informed of our progress and they appear to be continuing with their support.
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2016 we focused on finalizing contracts for the required MSW feedstock. The results were a signed memorandum of understanding (MOU) with a private contractor in Mexico City and a municipality outside of Asuncion, Paraguay; a letter of invitation from the Republic of Panama; and a formal proposal to a municipality in the State of Jalisco, Mexico now awaiting the formal request for proposal coming in 2017. The Mexico City MOU was followed in December 2016 with a Waste Supply Agreement. Each opportunity was negotiated to satisfy our need for thirteen-hundred and twenty metric tons per day of MSW feedstock per ZEWOPtm.
2017 was Transacts breakthrough year as it finally secured the required feedstock under long-term contract for its first ZEWOPtm to be in Mexico’s second largest city Guadalajara. We immediately secured a strategically located industrial site in El Salto and have proceeded to pre-sell the products from the future ZEWOPtm.
In 2018 we focused on completing the due diligence for the El Salto site, the pre-development capital required to pay for the building-site and the completion of all preliminary design work required to secure an EPC Contractor (Engineering, Procurement and Construction) through the tender process to build the ZEWOPtm. Due diligence was completed proving the site suitable for our proposed use and the landowners have so far continued to wait for us to close on the site.
The pre-development capital was committed to as a bridge-loan, but to date has not been received.
Figure 1: Concept Rendering of El Salto ZEWOPtm
Plant is estimated at 31,355 sq. meters. Using approximately 7.2 hectares.
2019 was dominated with closing the funds to build the El Salto ZEWOPtm and preparing the Company for operating status. This included continued meetings with members of the new Mexican government to forward our waste management approach in Mexico and renegotiating the purchase of the El Salto lands anticipating a closing. We started the process of acquiring a sustainable geothermal technology that will provide most of the energy required to operate the ZEWOPtm. Our incoming COO and CPO started working through the people requirements for Mexico.
We acquired another Irish corporation to hold our physical assets in Ireland as we start the search for facilities to house our global accounting, human resources, and research/development offices in Dublin. To that end Christina Kenny officially came on as our Chief People Officer starting the process of identifying our first hires for both the global administration and the El Salto ZEWOPtm.
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2020 had two focuses: We continued raising the predevelopment capital for El Salto, Mexico and new business development initiatives that could result in cash flow. Raising the pre-development capital for El Salto during COVID-19 Pandemic led to the loss of several funders, however, as companies adjusted it created new opportunities. We reduced our initial capital requirements by $10 Million through negotiating a lease/purchase agreement on the El Salto lands. Then after many single-family office contacts we negotiated the balance of the funds required. We have secured a $14 Million loan with an office that owns an EPC Contractor and we have agreed to their preferred vendor status, provided they are competitive through the tender process. In terms of business development, we contracted to develop a retail business using our core reactor technology. The retail opportunity is now in the business planning stage.
2021 efforts were focused on planning, team building and completing our funding in anticipation of starting the predevelopment phase of the El Salto ZEWOPtm. In that process we clearly identified our purpose “To Help humanity restore its balance with nature” and our Mission “To utilize latent energies and human off casts to create resources that enhance the Economy, the Environment and Communities we operate in.” All corporate activity undertaken will work towards our vision of “a world where all energy and resources used to sustain humanity, have no impact on the biosphere.” To that end we spent time examining our future risk and resilience strategies, examining our supply-mesh, and creating a detailed plan for the first ninety-days after launch. We continued to continued to manage four potential funding relationships, two of which have continued to mature through due diligence and negotiations. During this period, we also were able to raise some working capital and maintain relationships in Guadalajara, MX. We initiated feedstock (MSW) discussions in three states in the US northeast each is in its own process.
Business Strategy
TransAct Energy Corp. has elected to focus entirely on the global development and dissemination of its ZEWOPtm. The ZEWOPtm makes ecological, economic, cultural, and social sense. Becoming an engine that supports the circular economy in any community it enters, sustainably; Municipalities can now be paid instead of paying to manage their MSW. In the process, TransAct can incorporate many of the energy technologies it has worked on including, geothermal and solar.
It is our intent during the eighteen-months that it should take to construct the first municipal scale ZEWOPtm; to debug any mechanical/operational issues of the design. After the first building is complete (approximately one-year in), we will secure the second site in Guadalajara and start its construction as soon as the first plant is certified operational. We will complete the assembly of the second ZEWOPtm to perfect the project management process, creating a cookie cutter approach to ZEWOPtm erection.
The first two ZEWOPtm gives us the opportunity to recruit and train the project managers’ expertise to effectively work with our EPC contractors in the development of each new ZEWOPtm; with a focusing on streamlining the supply chain of required materials and equipment.
During the estimated twenty-four to 30 months it will take to get the first two ZEWOPtm underway, we intend on imbedding a team in Europe to secure feedstock and development sites for the next twenty ZEWOPtm. This approach will be continued around the globe, selecting major markets that are politically and economically ready to adopt our approach to sustainable manufacturing using solid waste. Upon receipt (in the first quarter of 2022) of the loan funds required for the predevelopment of the El Salto, ZEWOPtm; our pre-described timeline will start.
With a firm start date and location of the first ZEWOPtm TransAct Energy Mexico can proceed to finalize long-term offtake agreements. We will reengage Fichtner Consulting Engineers to prepare working drawings, that while being approved under permits and permissions will go to tender for a guaranteed procurement and construction contract (EPC). When these steps are completed, we intend on finalizing the tentative financing commitments we have in place with international investment banks.
TransAct intends on establishing the manufacturing of our proprietary reactors in Mexico in 2022. We have already initiated discussions for a joint venture agreement with an ISO 9001 and ASME capable manufacturer. Our facility would supply the demand for both Mexico, South America, Central America, Canada, and the USA.
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ZEWOPtm can demonstrate to Mexico and the World a municipal scale solution to manufacturing using solid waste without emissions. Although we have been approached to build in other North American cities, we feel the market is best approached when the first ZEWOPtm is fully operational to garner government agency support. Once we break ground, we will make sure major municipalities throughout the US and Canada are aware of our process, so we get on their technology review lists. This will ensure a smoother entry into North American markets,
Until the first revenues from operations come in, our corporate operations will continue to be funded by raising money through private placements or public offerings. We anticipate bringing on an expanded management team to oversee our operational growth throughout the upcoming year and plan to raise additional capital as required.
Markets and Customers
The markets that need to adopt a circular economy strategy, the complete processing of solid waste into useable products/commodities without emissions or landfilling are global. Countries around the world are adopting standards that will reduce green house gas emissions. They are promoting better use of resources, ultimately seeking freedom from new resource harvesting including foreign petroleum. The TransAct ZEWOPtm provides these markets with an emissions free solution utilizing their solid waste and turning it into products and fuels that can be used in these domestic markets.
We have had discussions and early contract negotiations with entities in Brazil, Canada, Europe, Mexico, and USA. Europe is the most advanced market with legislation in place that targets zero-landfills and zero-emissions within a few short years. The current ZEWOPtm design for mass production has a plant size processing capacity of approximately 1320 tonnes per day of raw municipal solid waste (based on 2 Kgs per day per person, approximately 660,000 people in North America slightly less in Europe).
Our target service customers are corporations or municipalities with municipal solid waste, plastic, tires, or medical waste as these are the most profitable waste streams. However, we can process any carbon-based waste stream including sewage and agricultural.
Our target ZEWOPtm product customers include airlines, shipping companies, bus companies, trucking companies or fuel retailers requiring direct blend green fuels to meet legislated targets. The EU 20/20 legislation started on January 1st of 2015, requires a 20% green fuel blend by 2020. This has created customers needing a green fuel that can blend with existing refined fuels. Since 2015, all airplanes or ships landing in the EU require 15% of their fuel to be green. We anticipate these sectors will adopt our fuels in this capacity upon EU certification. Our customers also include friction product manufacturers (brake pads, clutch plates, sanding disks) and wood product manufacturers (plywood, particle board, OSB etc.) that utilize phenol resins in their manufacturing process. We are targeting manufacturers of biodegradable plastics and pharmaceuticals for our Levoglucosan and tire/rubber manufacturers, lithographers and printers for our high-quality carbon black. Waxes for the cosmetic industry, paraffin waxes for a variety of other uses including candles, along with high grade lubricating oils are ZEWOPtm products. We produce fertilizers for the agricultural industry, a brick mix for the construction industry, a variety of reclaimed metals, and purified (distilled) water. Acetic acid and furfural are manufactured for industrial chemical manufacturers. We have a diverse mix of products and potential customers.
Employees
As of December 31, 2021, the Company has a combined CEO/CFO. The Company has identified persons for many of its required portfolios and intends to finalize employee agreements in March 2022. The focus will be on growing the human resource, development, accounting, supply chain, and sales teams first and then filling out the rest as we progress towards operations.
Our global offices covering human resources, accounting, research, and development will be based in Dublin, Ireland and will be staffed accordingly starting in the first quarter of 2022.
As the company ramps up the ZEWOPtm in Mexico, it anticipates bringing on 50 to 75 employees in its Mexican subsidiary.
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The Company did not experience any labour disputes or labour stoppages during the current fiscal year.
Principal Products
The Company’s principal products are carbon black, phenol resins and Levoglucosan making up approximately 71% of our proposed revenue. Waxes account for another 15%.
Sources and Availability of Raw Materials
The raw material for the ZEWOPtm is solid waste; better known as trash or garbage. Humanity currently produces over 11 Billion tonnes of waste per year. Just over 2 Billion tonnes is processed by use of landfills or incineration technologies; while the rest is dumped raw onto land/oceans. Garbage is readily available in every municipality on our planet.
Seasonality of Business
Waste from human activities is generated 365 days a year with slight seasonal variations occurring in MSW. Our facilities are designed to run every day of the year. The products we produce are in demand globally and used year-round.
Industry Practices/Needs for Working Capital
The Company is heavily involved in development operations; therefore, high levels of working capital will be committed directly or indirectly to the construction efforts. After a ZEWOPtm becomes commercially operational, the needs of working capital are expected to be low. The Company is expecting to be significantly involved in development activities for the next 20 years.
Dependence on Few Customers
While the waste supplied to each ZEWOPtm comes from millions of residences in a city; our contract is typically awarded by one customer. The Company’s dependency on one customer for the feedstock is mitigated by the long-term waste and operational guarantees in our agreement. In the future, we may be able to set up direct homeowner and business waste pickup agreements.
The market for our products is vast. However, the number of entities that can physically, logistically, and economically purchase large quantities of the commodity in our area of operations are limited. The Company’s primary revenues are projected to originate from carbon black (21 %+) and phenol resin (38 %+) sales. Currently, the Company has interest from three multi-national corporations for these and other ZEWOPtm products. Mitigating risk factors with customers will focus on their creditworthiness, a guaranteed long-term contract with no out, unless we do not perform. We can also build up a multitude of small order customers over time.
Competitive Conditions
The interest in both sustainable energy, manufacturing, and the waste to value sector have continued to grow as have the amounts of garbage. Every government on the planet is faced with growing amounts of solid waste and the mandate to use it as a resource rather than bury or burn it. The demand for sustainable energy continues to increase almost everywhere on the planet at the same time. Climate changes affect the demand for heating and cooling and the lack of rain in certain areas impacts on the ability to produce hydroelectricity. Political instability or the threat there of, in oil producing regions sends countries that have petroleum-based economies scrambling for alternatives. Economic instability impacts on many countries abilities to import energy; causing them to look within their own borders for energy that provides autonomy. The pressure is on all nations to look at and change the environmental impact of their solid waste.
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Each product we produce is made by reprocessing solid waste, resulting in “green” and cheaper products. Our production process has no emissions or environmental impact compared to competitive products that come from crude oil and natural gas. Because our raw material is garbage, we are not subjected to market fluctuations and can consistently maintain our cost of goods compared to our competitors. The finished products are produced at much lower costs than our competitors giving us a natural advantage going forward.
Any technology that can produce clean energy from waste in a cost-effective manner has a competitive advantage in the complex matrix of sustainable energy production. To date, there have been no emission free and cost-effective value from waste technologies to handle the ever-growing waste on our planet. Governments have settled for incineration with scrubbers that remove the pollutants to established levels. The new emission targets being established for waste going forward, limits the competition.
Availability of resources, upfront capital and customers willing to pay for the resulting products, determine the generation resource. The markets where they have resources but not the expertise or upfront capital, opens the competitive field for those able to build, own, and operate profitable facilities over the long-term.
The Company believes that our emission free technology, low operating costs and ability to process all waste streams into useable products with full carbon capture and a low “full life” cost will allow it to successfully compete for long-term waste processing and green product supply agreements globally.
Factors that can influence the overall market for our products include some of the following:
·number of market participants buying and selling green products including fuels;
·environmental regulations that impact us and our competitors;
·availability of production tax credits and other benefits allowed by tax law;
·relative ease or difficulty of developing and constructing new facilities; and
·credit worthiness and risk associated with buyers.
Environmental Compliance
The TransAct ZEWOPtm was designed and meets the European Union Environmental Protection Agency emission free standards. The plants do not incinerate so there are no flue gases and no ash. All waste delivered to the plant is converted to useable products.
The incoming waste is maintained indoors and under cover at three-day processing levels, to avoid any possible nuisance.
The storage systems for liquids produced on site pending shipment; meet or exceed regional standards for safety and environmental impact.
All known environmental issues in the ZEWOPtm have been identified and solutions obtained that will mitigate these issues beyond established compliance.
Available Information
We will be making available in the near term, through our Internet website at http://www.transactenergycorp.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Information on our website is not incorporated into this report and is not a part of this report.
All material press releases are disseminated through a North America wide news wire service, published on our website, LinkedIn and twitter (transactenergycorp@transactenergyc).
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Governmental Regulation
Although we intend to comply with all applicable laws and regulations, we cannot assure you that we comply or that we will be able to comply with all future laws and regulations. Additional national or regional legislation, or changes in regulatory implementation, may limit our activities in the future or significantly increase the cost of regulatory compliance. If we fail to comply with applicable laws and regulations, criminal sanctions, or civil remedies, including fines, injunctions, or seizures, could be imposed on us. This could have a material adverse effect on our operations.
The business of industrial plant development and operation is subject to substantial regulation under governmental laws relating to the development, upgrading, marketing, pricing, taxation, and distribution of our products and other matters. Amendments to current laws and regulations governing development and operations of industrial plants could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to our industry generally, will not be changed in a manner which may adversely affect our progress and cause delays, inability to develop or abandonment of these interests.
Permits, leases, licenses, and approvals are required from a variety of regulatory authorities at various stages of development and operation of industrial projects. There can be no assurance that the various government permits, leases, licenses, and approvals sought will be granted in respect of our activities or, if granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses, and approvals will not contain terms and provisions which may adversely affect our development and operating activities.
The development and operations of our proposed projects are or will be subject to stringent federal, state, provincial and local laws and regulations relating to improving or maintaining environmental quality. Environmental laws often require parties to pay for remedial action or to pay damages regardless of fault. Environmental laws also often impose liability with respect to divested or terminated operations, even if the operations were terminated or divested many years ago.
The development activities and operating programs on our proposed and future projects are or will be subject to extensive laws and regulations governing, development, production, imports, taxes, labor standards, occupational health, waste disposal, protection and remediation of the environment, protection of endangered and protected species, plant safety, toxic substances, and other matters. Power development and operations are also subject to risks and liabilities associated with pollution of the environment and disposal of waste products. Compliance with these laws and regulations will impose substantial costs on us and will subject us to significant potential liabilities.
Our business is subject to various federal, provincial, state and local laws and governmental regulations that may be changed from time to time in response to economic or political conditions. TransAct Energy Corp. in each jurisdiction is subject to regulation in respect of the production, sale and distribution of energy in the form of fuel or electricity.
TransAct will be required to obtain various government approvals for construction of future facilities.
For project development TransAct will hire consulting and engineering services for site development, design, air quality, cooling water reuse, permitting, environmental engineering and regulatory compliance.
Environmental Credits
As a future “green” product producer, environmental-related credits, such as renewable energy credits or carbon credits, may become available for sale to power companies (to allow them to meet their “green” power requirements) or to businesses which produce carbon-based pollution. If available, these credits will belong exclusively to us or our joint venture and may provide an additional source of revenue.
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Item 1A. Risk Factors.
General Business Risks
We are a new business with limited operating history and making an investment in TransAct is risky. If we are unable to successfully identify and secure waste optimization projects, then we will not be successful as a business. It will be difficult for you to evaluate an investment in our stock since our operating history is limited to developing our business plan, and bidding on multiple waste-optimization projects globally. As a young Company, we are especially vulnerable to any problems, delays, expenses, and difficulties we may encounter while implementing our business plan. We have not proven the essential elements of profitable operations, and you will bear the risk of complete loss of your investment if we are not successful.
Our future performance may depend on our ability to establish that a particular energy technology is economically sustainable. Sustainable manufacturing technology development and operations involve a high degree of risk. The execution of our business plan is generally, dependent upon the existence of economically usable solid waste and the sale of our proposed product matrix. Expansion of the production of products from our technology is not certain and depends on successful production in quantities and containing enough marketable quality economically for future plants.
We have a need for substantial additional financing and will have to significantly delay, curtail or cease operations if we are unable to secure such financing. The Company requires substantial additional financing to fund the cost of acquiring and developing ZEWOPtm. The Company also requires funds for other operating activities, and to finance the growth of our business, including the construction and commissioning of ZEWOPtm. We may not be able to obtain the needed funds on terms acceptable to us or at all. Further, if additional funds are raised by issuing equity securities, significant dilution to our current shareholders may occur and new investors may get rights that are preferential to current shareholders. Alternatively, we may have to bring in joint venture partners to fund further development work, which would result in reducing our interests in the projects.
We may be unable to obtain the financing we need to pursue our growth strategy for ZEWOPtm, which may adversely affect our ability to expand our operations. When we identify a manufacturing project that we may seek to acquire or to develop, a substantial capital investment will be required. Our continued access to capital, through project financing or through a partnership or other arrangements with acceptable terms, is necessary for the success of our growth strategy. Our attempts to secure the necessary capital may not be successful on favorable terms, or at all.
Market conditions and other factors may not permit future project and acquisition financings on terms favorable to us. Our ability to arrange for financing on favorable terms, and the costs of such financing, are dependent on numerous factors, including general economic and capital market conditions, investor confidence, the continued success of current projects, the credit quality of the projects being financed, the political situation in the jurisdiction in which the project is located and the continued existence of tax laws which are conducive to raising capital. If we are unable to secure capital through partnership or other arrangements, we may have to finance the projects using equity financing which will have a dilutive effect on our common stock. Also, in the absence of favorable financing or other capital options, we may decide not to build new plants or acquire facilities from third parties. Any of these alternatives could have a material adverse effect on our growth prospects and financial condition.
It is very costly to place ZEWOPtm into commercial production. Before the sale of any products can occur, it will be necessary to construct a ZEWOPtm, a delivery system, and considerable administrative costs would be incurred. To fund expenditures of this magnitude, we may have to find a joint venture participant with substantial financial resources. There can be no assurance that a participant can be found and, if found, it would result in us having to substantially reduce our interest in the project.
12
We may be unable to realize our strategy of utilizing the tax and other incentives available for developing ZEWOPtm to attract strategic alliance partners, which may adversely affect our ability to complete these projects. Part of our business strategy is to utilize tax and other incentives available to developers of ZEWOPtm to attract strategic alliance partners with the capital sufficient to complete these projects. Many of the incentives available for these projects are new and highly complex. There can be no assurance that we will be successful in structuring agreements that are attractive to potential strategic alliance partners. If we are unable to do so, we may be unable to complete the development of our energy projects and our business could be harmed.
We may not be able to manage our growth due to the commencement of operations which could negatively impact our operations and financial condition. Significant growth in our operations will place demands on our operational, administrative and financial resources, and the increased scope of our operations will present challenges to us due to increased management time and resources required and our existing limited staff. Our future performance and profitability will depend in part on our ability to successfully integrate the operational, financial and administrative functions of our projects and other acquired properties into our operations, to hire additional personnel and to implement necessary enhancements to our management systems to respond to changes in our business. There can be no assurance that we will be successful in these efforts. Our inability to manage the increased scope of operations, to integrate acquired properties, to hire additional personnel or to enhance our management systems could have a material adverse effect on our results of operations.
If we incur material debt to fund our business, we could face significant risks associated with such debt levels. We will need to procure significant additional financing to construct, commission and operate our plants to generate and sell products. If this financing includes the issuance of material amounts of debt, this will expose the Company to risks including, among others, the following:
·a portion of our cash flow from operations would be used for the payment of principal and interest on such indebtedness and would not be available for financing capital expenditures or other purposes;
·a significant level of indebtedness and the covenants governing such indebtedness could limit our flexibility in planning for, or reacting to, changes in our business because certain activities or financing options may be limited or prohibited under the terms of agreements relating to such indebtedness;
·a significant level of indebtedness may make us more vulnerable to defaults by the purchasers of our products or in the event of a downturn in our business because of fixed debt service obligations; and
·the terms of agreements may require us to make interest and principal payments and to remain in compliance with stated financial covenants and ratios. If the requirements of such agreements were not satisfied, the lenders could be entitled to accelerate the payment of all outstanding indebtedness and foreclose on the collateral securing payment of that indebtedness, which would likely include our interest in the project.
In such event, we cannot assure you that we would have sufficient funds available or could obtain the financing required to meet our obligations, including the repayment of outstanding principal and interest on such indebtedness.
We may not be able to successfully integrate companies that we may acquire in the future, which could materially and adversely affect our business, financial condition, future results and cash flow. Our strategy is to continue to expand in the future, including through acquisitions. Integrating acquisitions is often costly, and we may not be able to successfully integrate our acquired companies with our existing operations without substantial costs, delays or other adverse operational or financial consequences. Integrating our acquired companies involves several risks that could materially and adversely affect our business, including:
·failure of the acquired companies to achieve the results we expect;
·inability to retain key personnel of the acquired companies;
·risks associated with unanticipated events or liabilities; and
·the difficulty of establishing and maintaining uniform standards, controls, procedures, and policies, including accounting controls and procedures.
13
If any of our acquired companies suffer performance problems, the same could adversely affect the reputation of our group of companies and could materially and adversely affect our business, financial condition, future results, and cash flow.
The success of our business relies on retaining our key personnel. We are dependent upon the services of our President and Chief Executive Officer, Roderick C. Bartlett, our Chief Financial Officer, Rod Bartlett, our Director and future COO Joe F. Dickson our Director and future CPO, Christina Kenny, our Director and Finance person Karie Elsasser, our Director and CMO, Tina Vanderheyden, our CR&RO, Doug Scott. The loss of any of their services could have a material adverse effect upon us. As of the date of this report, the Company has negotiated compensation agreements with some of these persons but does not hold key-man insurance on any of them.
The impact of governmental regulation could adversely affect our business by increasing costs for financing or development of energy plants. Our business is subject to certain jurisdictional laws and regulations, including laws and regulations on taxation, the exploration for and development, production and distribution of petroleum products, and environmental and safety matters.
Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers, and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.
Because of these jurisdictional regulations, we could incur liability to governments or third parties for any unlawful discharge of pollutants into the air, soil, or water, including responsibility for remediation costs. We could potentially discharge such materials into the environment via:
·leakage of fluids or airborne pollutants from gathering systems, pipelines, plant and storage tanks;
·damage resulting from accidents during normal operations; and
·explosions.
Because the requirements imposed by such laws and regulations are frequently changed, we cannot assure you that laws and regulations enacted in the future, including changes to existing laws and regulations, will not adversely affect our business by increasing cost and the time required to explore and develop geothermal projects.
Industry competition may impede our growth and ability to enter into energy purchase agreements on terms favorable to us, or at all, which would negatively impact our revenue. The manufacturing industry is highly competitive, petroleum product industry is highly volatile, and we may not be able to compete successfully or grow our business. We compete in areas of pricing, access, and markets. The industry in many jurisdictions is complex as it is composed of public service districts, cooperatives, and investor-owned waste to energy companies. Many of the participants produce and distribute electricity and fuels. Their willingness to purchase petroleum or fuel from an independent producer may be based on several factors and not solely on pricing and surety of supply. If we cannot enter into offtake agreements on terms favorable to us, or at all, it would negatively impact our revenue and our decisions regarding development of additional plants.
Actual costs of construction or operation of a plant may exceed estimates used in negotiation of purchase and financing agreements. If the actual costs of construction or operations exceed the model costs, the Company may not be able to build the contemplated plants, or if constructed, may not be able to operate profitably. The Company’s financing agreements will typically provide for a priority payback to our partner. If the actual costs of construction or operations exceed the model costs, we may not be able to operate profitably or receive the planned share of cash flow and proceeds from the project.
There are some risks for which we do not or cannot carry insurance. Because our current operations are limited in scope, the Company carries property and public liability insurance coverage as needed but does not currently insure against any other risks.
14
As its operations progress, the Company will acquire additional coverage consistent with its operational needs, but the Company may become subject to liability for pollution or other hazards against which it cannot insure or cannot insure at sufficient levels or against which it may elect not to insure because of high premium costs or other reasons. Coverage is not available for environmental liability or earthquake damage.
Our officers and directors may have conflicts of interests arising out of their relationships with other companies. Several of our directors and officers serve (or may agree to serve) as directors or officers of other companies or have significant shareholdings in other companies. To the extent that such other companies may participate in ventures in which the Company may participate, the directors may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. From time to time, several companies may participate in the acquisition and development of properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment.
Risks Relating To the Market for Our Securities
A significant number of shares of our common stock are eligible for public resale. If a significant number of shares are resold on the public market, the share price could be reduced and could adversely affect our ability to raise needed capital. The market price for our common stock could decrease significantly and our ability to raise capital through the issuance of additional equity could be adversely affected by the availability and resale of many shares in a short period of time. If we cannot raise additional capital on terms favorable to us, or at all, it may delay our exploration or development of existing properties or limit our ability to acquire new properties, which would be detrimental to our business.
Because the public market for shares of our common stock is limited, investors may be unable to resell their shares of common stock. There is currently only a limited public market for our common stock on the OTCBB in the United States, and investors may be unable to resell their shares of common stock. The development of an active public trading market depends upon the existence of willing buyers and sellers that can sell their shares and market makers that are willing to make a market in the shares. Under these circumstances, the market bid and ask prices for the shares may be significantly influenced by the decisions of the market makers to buy or sell the shares for their own account, which may be critical for the establishment and maintenance of a liquid public market in our common stock. We cannot give you any assurance that an active public trading market for the shares will develop or be sustained.
The price of our common stock is volatile, which may cause investment losses for our shareholders. The market for our common stock although newly initiated is assumed to be highly volatile. The trading price of our common stock on the OTCBB is subject to wide fluctuations in response to, among other things, quarterly variations in operating and financial results, and general economic and market conditions. In addition, statements or changes in opinions, ratings, or earnings estimates made by brokerage firms or industry analysts relating to our market or relating to our Company could result in an immediate and adverse effect on the market price of our common stock. The highly volatile nature of our stock price may cause investment losses for our shareholders.
We do not intend to pay any cash dividends in the foreseeable future. We intend to reinvest any earnings in the development of our projects. Payments of future dividends, if any, will be at the discretion of our board of directors after considering various factors, including our business, operating results and financial condition, current and anticipated cash.
Our stock is subject to the Penny Stock rules, which impose significant restrictions on broker-dealers and may affect the resale of our stock. A penny stock is generally a stock that:
·is not listed on a national securities exchange or NASDAQ,
·is listed in the “pink sheets” or on the NASD OTC Bulletin Board,
·has a price per share of less than $5.00
·is issued by a company with net tangible assets less than $5 million.
15
The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in common stock and other equity securities, including:
·determination of the purchaser's investment suitability,
·delivery of certain information and disclosures to the purchaser, and
·receipt of a specific purchase agreement before effecting the purchase transaction.
Many broker-dealers will not affect transactions in penny stocks, except on an unsolicited basis, to avoid compliance with the penny stock trading rules. In the event our common stock becomes subject to the penny stock trading rules,
·such rules may materially limit or restrict the ability to resell our common stock, and
·the liquidity typically associated with other publicly traded equity securities may not exist.
Because of the significant restrictions on trading penny stocks, a public market may never emerge for our securities. If this happens, you may never be able to publicly sell your shares.
Item 2. Properties.
Our principal mailing address is 1225 E Sunset Dr, STE 145 - 367 Bellingham, WA 98226 United States. Our telephone number is 210-888-0785.
Item 3. Legal Proceedings.
Our Company is not a party to any bankruptcy, receivership, or other legal proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
16
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - TransAct Energy Corp. (“the Company”) was organized under the laws of the State of Nevada on March 15, 2006. The Company is in the business of developing and managing zero emission waste to value plants globally. The Company has generated nominal revenues and is considered a development stage company as defined in Accounting Standards Codification (“ASC”) Topic No. 915. The Company has, now, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.
Cash and Cash Equivalents - The Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.
Software and related amortization - Software is recorded at cost and the Company provides for amortization using the straight-line method over one year.
Income Taxes - The Company accounts for income taxes in accordance with ASC Topic No. 740, “Accounting for Income Taxes.” The Company adopted the provisions of ASC Topic No. 740, on January 1, 2007. As a result of the implementation of ASC Topic No. 740, the Company recognized approximately no increase in the liability for unrecognized tax benefits.
The Company has no tax positions on December 31, 2021 and 2020 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended December 31, 2021, and 2020, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at December 31, 2021 and 2020.
Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with ASC Topic No. 260, “Earnings Per Share” [See Note 10].
Accounting 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 assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management.
Recently Enacted Accounting Standards - In September 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2011-8 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.
F-5
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
Investment in Leases - All costs such as bid fees and lease rental payments related to the acquisition of energy leases are deferred and amortized on a straight-line basis over the term of the lease.
Foreign Currency Translation - The Financial statements are presented in United States dollars. In accordance with ASC 830 “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rate of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operation.
Stock Offering Costs - Costs incurred in connection with stock offerings will be deferred and offset against the proceeds of the stock offering. Costs incurred in connection with unsuccessful offerings will be expensed.
Reclassification - Certain prior year amounts have been reclassified to conform with current year presentation.
NOTE 2 - LOANS RECEIVABLE - RELATED PARTY
The $12,000, $5,000, $7,000, $212,000 and $12,520 loans receivable from a company whose sole shareholder holds less than 10% in TransAct, are secured and were due on November 1, November 10, November 29, December 6 and December 6, 2010, respectively. The loans are secured by certain assets and equipment of the company and bear interest at rates between 15% and 18% per annum for the terms of the loans.
On June 30, 2011 and December 31, 2010 interest receivable was $50,954. These notes have not been granted an extension, are in default and management has formally demanded payment of the outstanding principal and interest and may pursue legal action if the cost of said action can be justified. At December 31, 2010 the Company recorded a total allowance of $299,475 charged to operations including principal of $248,521 and interest of $50,954.
NOTE 3 - SOFTWARE
|
|
|
|
Net Book Value
|
|
|
Cost
|
Accumulated
Amortization
|
September 30,
2021
|
December 31,
2020
|
|
|
|
|
|
|
|
Software
|
$3,812
|
$3,812
|
$ -
|
$166
|
NOTE 4 - NOTES PAYABLE
The $10,000 convertible promissory note payable to a company whose shareholders hold less than 10% in TransAct is unsecured, bears interest at 10% per annum and was due and payable on March 31, 2010. The payee had the option to convert the entire principal amount on or before April 29, 2009 into common shares of the Company based on a conversion rate of $.00345 per share. No interest was payable if the principal was converted to shares of the Company. The payee did not exercise its conversion option. The note is currently outstanding and in October 2010 the Company issued a check in the amount of $11,876 as payment in full of principal and interest which was returned un-cashed by the payee. On December 31, 2021, accrued interest was $13,190.
The $17,500 promissory note payable to a company whose shareholders hold less than 10% in TransAct is unsecured, bears interest at 10% per annum and is due on demand. This note is currently in default. On December 31, 2021, accrued interest was $22,332.
The $25,000 and $15,243.90 ($20,000 CAD) promissory notes payable dated April 22, 2011 and March 31, 2011 respectively are unsecured and bear interest at 60% per annum or $2,500 and $1,445 ($2,000 CAD) respectively whichever is greater. The notes are due on demand and may be prepaid in whole or part without penalty. Accrued interest was $258,530 on December 31, 2021.
F-6
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
The $ 3,811 ($5,000 CAD) promissory note payable dated September 12, 2011 is unsecured and bears interest at $361 up to September 16, 2011 and $36 per diem until all principal and interest is repaid. The note is due on demand and may be prepaid in whole or part without penalty. Accrued interest was $139,028 on December 31, 2021.
The $100,000 promissory note payable dated September 30, 2013 is unsecured and is non-interest bearing.
A $22,030 promissory note payable dated February 24, 2011, to a former officer bears interest of $6,000 and was due on March 4, 2011. This note is accruing interest at $360 per day for every day after March 4, 2011 until the note is repaid in full. On December 31, 2021, accrued interest was $1,430,393.
A $46,660 promissory note payable dated April 22, 2011 to a former officer (more than 1 year ago) bears interest at 1% per diem. A beneficial conversion feature of $2,750 was recorded as a discount to the notes with the offset to Additional Paid in Capital. In May 2011 the holder of the note converted $10,000 of principal into 750,000 shares of common stock and the discount was expensed to interest. The remaining balance of $36,660 is due on demand. On December 31, 2021, accrued interest was $1,440,981.
A $3,000 convertible promissory note payable to a former officer is secured by certain assets and equipment of the Company and bore interest at 8% per annum through the due date in November 2010 and is currently in default and bearing interest at 60%. A beneficial conversion feature of $3,000 has been recorded as a discount to the note with an offset to additional paid in capital. The discount was fully amortized in 2010. On December 31, 2021, accrued interest was $21,215.
A $9,980 short-term loan dated January 23, 2018, is unsecured and bears fixed interest of $3000 and was due March 5th, 2018.This note is currently in default. Interest at the option of the Lender may be paid in stock at a 75% discount to market. On December 31, 2021, we accrued interest of $100,934.
A $4,980 short-term loan dated February 26, 2018 is unsecured and bears fixed interest of $1500 and was due in March 2018.This note is currently in default. Interest at the option of the Lender may be paid in stock at a 75% discount to market. On December 31, 2021 we accrued $50,464 in interest.
A $4,980 short-term loan dated May 29, 2018 is unsecured and bears interest of $35.71 per day and was due in June 30, 2018.This note is currently in default. On December 31, 2021, we accrued $46,857 in interest.
A $60,000 short-term loan dated June 6, 2018 is unsecured and bears interest of $3,000 per day. On December 31, 2021 we accrued $3,912,000 in interest.
A $3,980 short-term loan dated July 25, 2018 is unsecured and bears interest of $28.49 per day and was due in Aug 31, 2018.This note is currently in default. On December 31, 2021, we accrued $35,755 in interest.
A $5,000 short-term loan dated January 25, 2019 is unsecured and bears interest of $28.49 per day and was due February 25, 2019.This note is currently in default. On December 31, 2021, we accrued $38,250 in interest.
A $5,000 short-term loan dated February 28, 2019 is unsecured and bears interest of $28.49 per day and was due March 23, 2019.This note is currently in default. On December 31, 2021, we accrued $37,036 in interest.
A $10,000 short-term loan dated April 26, 2019, is unsecured and bears interest of 71.4257 per day. This note is currently in default. On December 31, 2021, we accrued $70,005 in interest.
A $15,000 convertible note dated May 9, 2019 is unsecured and bears interest of 12% per annum. The note was due May 5, 2020 unless converted to common stock. On Feb 4, 2021, the note and accrued $2,969 in interest were converted to restricted common stock. (note 6)
F-7
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
A $10,000 convertible note dated July 25, 2019 is unsecured and bears interest of 12% per annum. The note was due July 24, 2020 unless converted to common stock. On Feb 4, 2021, the note and accrued $1,726 in interest were converted to restricted common stock. (note 6)
A $5,000 short-term loan dated August 26, 2019 is unsecured and bears interest of 35.7143 per day. This note is currently in default. On December 31, 2021, we accrued $30,643 in interest.
A $4,995 short-term loan dated November 21, 2019 is unsecured and bears interest of 35.7143 per day August 26, 2019. This note is currently in default. On December 31, 2021, we accrued $27,535.73 in interest.
A $4,995 short-term loan dated December 20, 2019 is unsecured and bears interest of 35.7143 per day. On December 31, 2021, we accrued $26,500 in interest.
A $3,980 short-term loan dated March 20, 2020 is unsecured and bears interest of 28.57144 per day. On December 31, 2021, we accrued $18,600 in interest.
A $2,500 convertible note dated April 22, 2020 is unsecured and bears interest of 12% per annum. The note is due April 21, 2021 unless converted to common stock. On Feb 4, 2021, the note and accrued $208 in interest were converted to restricted common stock. (note 6)
A $5,000 convertible note dated December 1, 2020 is unsecured and bears interest of 12% per annum. The note is due November 01, 2021 unless converted to common stock. On December 31, 2021, we had accrued $649 in interest.
A $15,000 convertible note date February 5th, 2021 is unsecured and bears interest of 12% per annum. The note is due February 3rd, 2022 unless converted to common stock. On February 8th, 2021, the note was converted (note 6).
A $5,000 convertible note dated June 4, 2021, is unsecured and bears interest of 12% per annum. The note is due June 3, 2022, unless converted to common stock. On December 31, 2021, we had accrued $345 in interest.
A $5,000 convertible note dated August 24, 2021, is unsecured and bears interest of 12% per annum. The note is due August 23, 2022, unless converted to common stock. On December 31, 2021, we had accrued $210 in interest.
A $5,000 convertible note dated August 24, 2021, is unsecured and bears interest of 12% per annum. The note is due August 23, 2022, unless converted to common stock. On December 31, 2021, we had accrued $210 in interest.
A $5,000 convertible note dated August 24, 2021, is unsecured and bears interest of 12% per annum. The note is due August 23, 2022, unless converted to common stock. On December 31, 2021, we had accrued $210 in interest.
A $12,000 convertible note dates December 23, 2021, is unsecured and bears interest of 12% per annum. The note is due December 22, 2022, unless converted to common stock. On December 31, 2021, we had accrued $32 in interest.
NOTE 5 - NOTES PAYABLE - RELATED PARTIES
There are no notes payable to related parties on December 31, 2021.
Accrued interest and late fees for the notes at December 31, 2021 and December 31, 2020 was $1,570,638 and $1,571,015 respectively.
F-8
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
NOTE 6 - CAPITAL STOCK
Preferred Stock - The Company has authorized 10,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares are issued and outstanding on September 30, 2021.
Common Stock - The Company has authorized 100,000,000 shares of common stock, $.001 par value, with such rights, preferences, and designations and to be issued in such series as determined by the Board of Directors.
In December 2010 proceeds were received for 200,000 common shares at $.15 per share and 50,000 common shares at $.20 per share for a total of $ 40,000. These shares were issued in June 2011.
In January 2011 the Company issued 588,235 common shares at $.17 per share for total proceeds received of $100,000.
In February 2011 the Company issued 404,040 common shares pursuant to a convertible option of a note payable totaling $12,000 at $.0297 per share.
In June 2011 the Company issued 200,000 common shares for compensation services at a value of $.015 per share.
In June 2011 the Company issued 750,000 common shares pursuant to a convertible option of a note payable totaling $10,000 at $.013 per share.
In June 2011, the Company issued 175,739 common shares at a value of $.015 per share in exchange for consulting services accrued as a liability at December 31, 2010 in the amount of $ 37,500. The difference of $34,864 has been recorded as a gain on debt settlement.
In May 2012, the Company issued 3,316,500 common shares for consulting services at a value of $.035 per share (see Note 10).
In May 2012, the Company issued 275,000 common shares as a fee related to financing services at a value of $.0182 per share.
In May 2012 the Company issued 625,000 common shares for compensation services at a value of $.05 per share.
In May 2012 the Company issued 119,783 common shares for compensation services at a value of $.045 per share.
In May 2013 the Company issued 2,600,000 common shares as payment related to a technology purchase agreement at a value of $.0502 per share.
In May 2013 the Company issued 500,000 common shares for compensation services at a value of $.0501 per share.
At June 30, 2013 the Company caused the cancellation of 250,000 shares that had been issued for compensation services 125,000 shares at a value of $.0501 and 125,000 shares at $.05.
In August 2013 the Company issued 555,556 common shares pursuant to a convertible option of notes payable totaling $20,000 at $.036 per share.
In March 2014 the Company authorized the issuance of 450,000 common shares for compensation services at a value of $.041 per share.
F-9
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
In March 2014, the Company authorized the issuance of 14,210,235 common shares for $397,887 of compensation payable.
In April 2014, the Company authorized the issuance of 200,000 common shares for compensation services at a value of $.05 per share.
In April 2014 the Company authorized the issuance of 474,360 common shares pursuant to a convertible option of notes payable totaling $23,718 at $.05 per share.
In August 2014, the Company authorized the issuance of 221,778 common shares pursuant to a convertible option of notes payable totaling $9,980 at $.045 per share.
In August 2014 the Company authorized the issuance of 300,000 common shares pursuant to a convertible option of notes payable totaling $18,000 at $.06 per share.
In September 2014 the Company authorized the issuance of 665,750 common shares pursuant to a convertible option of notes payable totaling $39,975 at $.06 per share.
In September 2014, the Company authorized the issuance of 641,715 common shares pursuant to a convertible option of notes payable totaling $44,920 at $.07 per share.
In October 2014, the Company authorized the issuance of 229,750 common shares pursuant to a restricted securities agreement totaling $50,545 at $0.22 per share.
In December 2014, the Company authorized the issuance of 140,000 common shares for compensation services of $26,600 at $0.19 per share.
In December 2014, the Company authorized the issuance of 233,921 common shares for $33,333.68 of compensation payable at $0.1425.
In March 2015, the Company authorized the issuance of 99,750 common shares pursuant to a convertible option of notes payable totaling $9,975 at $.10 per share.
In March 2015, the Company authorized the issuance of 166,834 common shares pursuant to a convertible option of notes payable totaling $20,020 at $.12 per share.
In March 2015, the Company authorized the issuance of 66,667 common shares pursuant to a convertible option of notes payable totaling $7,000 at $.1050 per share.
In October 2015, the Company authorized the issuance of 124,750 common shares pursuant to a convertible option of notes payable totaling $4,990 at $.04 per share.
In November 2015, the Company authorized the issuance of 147,725 common shares pursuant to a convertible option of notes payable totaling $5,909 at $.04 per share.
In November 2015, the Company authorized the issuance of 73,563 common shares pursuant to a convertible option of notes payable totaling $5,885 at $.08 per share.
In December 2015, the Company authorized the issuance of 536,000 common shares for compensation payable totaling $27,336 at $.051 per share.
F-10
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
In April 2016, the Company authorized the issuance of 104,688 common shares pursuant to a convertible option of notes payable totaling $8,375 at $.08 per share.
In June 2016, the Company authorized the issuance of 2,050,000 common shares pursuant to a convertible option of notes payable totaling $102,500 at $.05 per share.
In August 2016, the Company authorized the issuance of 142,857 common shares pursuant to a convertible option of a note payable totaling $10,000 at $.07per share. In the same period the Company authorized the issuance of 305,522 common shares pursuant to a convertible option a of note payable totaling $19,975 at $.06538 per share.
In September 2016, the Company authorized the issuance of 142,643 common shares pursuant to a convertible option of notes payable totaling $9,985 at $.07 per share.
In December 2016, the company authorized the issuance of 185,249 common shares pursuant to convertible option of notes payable totaling $14,819.95 at a value of $.08 per share.
In the same period the Company authorized the issuance of 645,000 common shares for compensation services totaling $38,700 at a value of $0.06 per share.
In January 2017, the Company authorized the issuance of 89,864 common shares pursuant to a convertible option of notes payable totaling $2,489 at $.0646per share and $2500 @ $0.0487 per share.
In February 2017, the Company authorized the issuance of 200,000 common shares pursuant to a convertible option of notes payable totaling $10,000 at $.05 per share.
In May 2017, the Company authorized the issuance of 377,207 common shares pursuant to convertible option of notes payable totaling $13,500 at $0.0487 per share and $5,000 at $0.5 per share.
In July 2017, the Company authorized the issuance of 160,000 common shares pursuant to convertible option of a note payable totaling $8,000 at $0.05 per share.
In September 2017, the Company authorized the issuance of 1,703,882 common shares pursuant to convertible option of notes payable totaling $111,990 at $0.07 per share, $5,000 at $0.0782 and $5,261 at $0.13125 per share.
In October 2017, the Company authorized the issuance of 327,895 common shares pursuant to convertible option of notes payable totaling $20,435 at $0.12 per share, $20,000 at $0.1269 per share.
In December 2017, the Company authorized the issuance of 27,297 common shares pursuant to convertible option of a note payable of $6,006 at $0.22 per share. In the same period the
Company authorized the issuance of 257,027 common shares for compensation services totaling $59,836 at a value of $0.2328 per share.
In April 2018, the Company authorized the issuance of 190,476 common shares pursuant to convertible option of notes payable totaling $10,000 at $0.0525 per share.
In May 2018, the Company authorized the issuance of 1,000,000 common shares pursuant to a partial payment for a land acquisition agreement in the amount of $90,000 at $0.09 per share and 250,000 common shares pursuant to a compensation agreement at $0.09 per share.
In July 2018, the Company authorized the issuance of 47,421 common shares pursuant to convertible option of notes payable totaling $4,965 at $0.1047 per share.
F-11
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
In November 2018, the Company authorized the issuance of 459,627 common shares pursuant to convertible option of notes payable totaling $10,000 at $0.0575 and $20,000 at $0.07 per share respectively.
In December 2018, the Company authorized the issuance of 131,355 common shares pursuant to convertible option of a note and interest payable totaling $13,135.51 at $0.10 per share. In the same period the Company authorized the issuance of 723,552 common shares for compensation services totaling $57,884 at a value of $0.08 per share.
In January 2019, the Company authorized the issuance of 106,985 common shares pursuant to convertible option of notes payable totaling $7,275 at $0.068 per share, respectively.
In June 2019, The Company authorized the issuance of 200,000 common shares pursuant to a convertible option of a note payable totaling $10,000 at $0.05 per share, respectively.
In July 2019, The Company authorized the issuance of 200,000 common shares pursuant to a convertible option of a note payable totaling $10,000 at $0.05 per share respectively.
In September 2019, The Company authorized the issuance of 222,222 common shares pursuant to a convertible option of a note payable totaling $10,000 at $0.045 per share respectively.
In April 2020, the Company authorized the issuance of 839,286 common shares pursuant to convertible option of a note $10,000 at $0.08 per share and $10,000 at $0.014 per share. In the same period the Company authorized the issuance of 556,471 common shares for 2019 director compensation services totaling $55,647 at a value of $0.10 per share.
In February 2021, the Company authorized the issuance of 901,995 common shares pursuant to convertible option of notes $15,000 at $0.10, $10,000 at $0.04, $2,500 at $0.05 and $15,000 at $0.04 per share.
NOTE 7 - INCOME TAXES
The Company accounts for income taxes in accordance with ASC Topic No. 740, “Income Taxes.” This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carry forwards.
The Company adopted the provisions of ASC Topic 740, “Accounting for Uncertainty in Income Taxes”, on January 1, 2007. As result of the implementation of ASC Topic 740, the Company recognized approximately no increase in the liability for unrecognized tax benefits.
The Company has no tax provisions on December 31, 2021, and 2020, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the periods ended December 31, 2021, and 2020, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties on December 31, 2021, and December 31, 2020.
F-12
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss (NOL). Tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Net deferred tax assets (liabilities) consist of the following components as of December 31, 2021, and 2020:
|
|
2021
|
|
2020
|
|
Deferred tax assets:
|
|
|
|
|
|
|
NOL Carryover
|
$
|
1,955,393
|
|
$
|
1,855,071
|
|
Related Party Accrual
|
|
-
|
|
|
-
|
|
Valuation Allowance
|
|
(1,955,393)
|
|
|
(1,855,071)
|
|
Net deferred tax asset
|
$
|
-
|
|
$
|
-
|
The income tax provision differs from the amount of estimated income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the periods ended December 31, 2021, and 2020 due to the following:
|
|
2021
|
|
2020
|
|
Book Loss (20% statutory rate)
|
$
|
(391,079)
|
|
$
|
(371,014)
|
|
Valuation allowance
|
|
391,079
|
|
|
371,014
|
|
Tax at effective rate
|
$
|
-
|
|
$
|
-
|
At December 31, 2021, the Company had net operating loss carry forwards of approximately $ 14,809,269 that may be offset against future taxable income from the year 2022 through 2032. No tax benefit has been reported in the December 31, 2021, or 2020 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
NOTE 8 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has a working capital deficit and has incurred losses since its inception. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans and/or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
F-13
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
NOTE 9 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has accrued executive compensation of $3,020,493 to the CEO and President of the Company from inception to the period ended December 31, 2021 (See Note 10).
The Company has accrued executive compensation of $229,866 to the Chief People Officer of the Company to the period ended December 31, 2020 (See Note 10).
The Company has accrued executive compensation of $115,601 to the SVP Technology of the Company to the period ended April 1, 2016 (See Note 10).
The Company has accrued executive compensation of $181,700 to the SVP of Real Estate and Project Development of the Company after entering a Release and Settlement terminating their Employment Contract to the period ended December 31, 2020 (See Note 10)
The Company has accrued executive compensation of $130,619 to the Directors of the Company and its subsidiaries to the period ended December 31, 2020 (See Note 10)
NOTE 10 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share for the periods presented:
|
|
Year Ended December 31,
|
|
|
2021
|
|
2020
|
|
Loss from operations available to common shareholders
(numerator)
|
$
|
(1,955,393)
|
|
$
|
(1,855,071)
|
|
Weighted average number of common shares
outstanding during the period used in loss per share
(denominator)
|
|
61,534,529
|
|
|
60,290,354
|
Dilutive loss per share was not presented as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
Compensation agreement - The President and Chief Executive Officer agreement pays an annual base salary of $303,277, with a cash bonus annually based on 5% of EBITDA and a stock bonus formulated around the return on invested capital where the issued and outstanding stock of the Company times the rate of return divided by ten will equate to the stock issued.
Compensation agreement - The Senior Vice President of Technology agreement pays an annual base salary of $100,000 Starting June 2013, with a cash bonus annually based on 0.25% of EBITDA and a stock bonus formulated around the return on invested capital where the issued and outstanding stock of the Company times the rate of return divided by forty will equate to the stock issued. This contract was terminated effective April 1, 2016.
Consulting Agreement - On May 3, 2012, the company entered into an agreement whereby 3,015,000 free trading shares are to be issued in exchange for a $20,000 advance to the Company and the settlement of any and all obligations given to the parties of the agreement. These shares are intended to be sold to cover their costs including the advances and any balance of these shares not used in settlement would be used to raise capital and split evenly between the parties.
F-14
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
To facilitate the terms of this agreement the Company by way of special resolution identified certain shareholders of the Company that had enough unrestricted common shares and agreed to replace the unrestricted shares with restricted common shares plus an incentive of an additional 10% of bonus shares. In May 30, 2012 the Company issued 3,316,500 common shares, including 301,500 bonus shares, valued at $.036 per share. In June 2014, the company returned the original $20,000, the shares remain outstanding.
Loan Agreement - Pursuant to an Agreement on June 28th, 2012, that was extended to August 31, 2012 and then on Aug 30th, 2012 to November 15th, 2012 and was extended to May 15, 2014; where originally on May 11, 2012 the Company arranged for 3,005,000 free trading shares to be placed as additional security for a $100,000 loan as a retainer for a financing of 100 million dollars. The Company had a Memorandum of Understanding to receive one third or 30 million dollars of this financing. The financing was not completed.
If these shares are used to repay the loan the Company will have to issue the shares used plus 10% additional shares to the contributing shareholders and expense whatever shares used as financing costs. The shares remain outstanding.
Share-purchase Agreement - On January 30, 2014, the Company entered a share-purchase agreement for shares in a proposed subsidiary that would own and operate a zero-emissions waste optimization plant (ZEWOPtm) in Puebla, Mexico. The Purchaser advanced $300,000 of the proposed 30% of CAPEX to the Company. The Company formed the subsidiary in question Puebla ZEWOP 1. The Puebla ZEWOP 1 share purchase agreement was not updated, and the terms of the original agreement have not been fulfilled by the consortium resulting in the termination of the same. The Company has a receivable due from the subsidiary at March 31, 2016 of $96,755.
Consulting Agreement - On August 20th, 2014, the company entered into an Engineering Services Agreement to facilitate the design/build of the proprietary reactors for the Zero Emissions Waste Optimization Plant. The estimated cost of the contract is $450,000 over 12 months, out of pocket reimbursements, cost plus 10% on all material and outside labor and a stock bonus of 250,000 common shares upon completion of the scope of work. This agreement will be amended to reflect the new location of the plant. All amounts under the agreement are current.
Subscription Agreement - Pursuant to an Agreement on September 27th, 2014 the company agreed to sell restricted securities of the Company in the form of common stock upon receipt of three tranches of capital equaling $1,200,000 each. The common stock was to be sold for $0.50 for the first tranche of 2,400,000 shares and was due in the week of September 28, 2014, $1.00 for the second tranche of 1,200,000 shares and was due in the week of March 1, 2015, $1.50 for the third tranche of 800,000 shares due on August 2nd, 2015. February 2015 the subscribers of $3.6 Million dollars of our common stock advised us they would be unable to fulfill their commitment under the restricted securities agreement. We have received the same in writing and agreed to a settlement with the parties involved where they purchase 526,316 common shares @ $0.19. To date $12,440 has been received of the agreed $100,000. Under the terms of the agreement the funds received up to December 2015 were treated as forfeited and the settlement agreement terminated.
Consulting Agreement - On June 1, 2017, the Company through its subsidiary Transact Energy Mexico S de R.L. de C. V. contracted with a private consultant to secure a binding Waste Management Agreement with the Municipality of Zapopan. The agreement pays $30 Million pesos (approximately $1.47 Million USD) as a success fee only. This group is responsible for helping us secure the September 13, 2017 waste supply agreement in Guadalajara. Once this plant is approved the fee is due.
Waste Supply and Disposal Agreement - On September 13, 2017 the Company through its subsidiary Puebla Z.E.W.O.P. 1, S.de R.L. de C.V. contracted with Hasars, S.A. de C.V. to purchase four-hundred and eighty-one thousand, eight hundred (481,800) metric tons (MT) per year at a cost of $180 Mexican Pesos per MT or approximately $2 Million USD per annum. The contract is for a ten-year period initially and conditional on us producing a certified operational ZEWOPtm.
F-15
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
Land Purchase Agreement - On October 25th, 2017 the Company through its subsidiary Puebla Z.E.W.O.P. 1, S.de R.L. de C.V. entered into a land purchase agreement for 18.42 hectares of industrial use land in El Salto, Jalisco, Mexico. In May 2019 we renewed negotiations through TransAct Energy Mexico for the lands revised at 19.57 hectares and a price of approximately $10,423,75. The deal is pending title insurance and the title preparation. The $90,000 deposit paid with stock may be reclaimed and settled with cash. On January 7th, 2021, the Company through its subsidiary TransAct Energy Mexico S. de R.L. de C.V. modified the agreement to a Lease Purchase Agreement for the 19.57-hectare lands in El Salto, Jalisco, Mexico at 403,000 Mexican Pesos (Approx. $20,000) per month for up to 2 years with all payments contributing to the purchase starting March 1st, 2021. At December 31, 2021, this agreement is lapsed.
Consulting Agreement - On November 27, 2017, the Company agreed to engage the services of Ericho Communications Ltd for a one-year term starting February 1, 2018. The company is obligated to a monthly fee of $20,000 USD during the term. The Company with Ericho agreed to postpone the agreement temporarily, currently the Company has accrued $60,000 in fees under this agreement to the end of December 31, 2018.
Consulting Agreement - On December 1, 2017, the Company contracted with a private consultant to secure a binding Waste Management Agreement within the State of Rio de Janeiro. The agreement pays $4,875,000 Reais (approximately $1.53 Million USD) as a success fee only.
Consulting Agreement - On February 1, 2018 the Company through its subsidiary Puebla Z.E.W.O.P. 1, S.de R.L. de C.V. contracted with an Engineering firm to review the El Salto lands described above. The agreement pays the equivalent of $5,000 dollars as a fee. The Company provided 1/3 as a deposit the balance is outstanding at December 31, 2021.
Compensation agreement - On April 1, 2018 the Company contracted for a Senior Vice President of Real Estate and Project Development. The Agreement pays an annual base salary of $185,000 with a COLI. Starting April 2018, with a performance bonus annually of up to 50% of their salary based on delivering ZEWOPtm projects undertaken on time, budget and of expected quality as per set formulas. The contract has now been settled and both parties released pending receipt of long term financing.
Appraisal Engagement - On June 13th, 2018, the Company engaged on behalf of TransAct Mexico CBRE S.A. de C.V. to appraise the 18.42-hectare industrial site in El Salto, Mexico. The $8,500 fee is outstanding at December 31, 2021.
Sale of ZEWOPtm Technology - On December 31, 2018, as part of its long-term global tax strategy Transact Energy Corp sold all rights to its Zero Emissions Waste Optimization Plant technology to its wholly owned subsidiary TransAct Energy Global Limited for the sum of $20 Million USD. The Company will receive an initial payment of $2 Million USD on or before April 11th, 2019, and then $6 Million each over the years 2019, 2020 and 2021. TransAct Energy Global Limited will be responsible for disseminating the technology globally. No payments to date.
Compensation agreement - On September 1, 2018 the Company contracted for a Chief People Officer. The Agreement pays an annual base salary of $275,838 (250K Euro) starting September 2019, with bonus provisions if performance expectations met. Suspended June 2020.
Preferred Vendor Agreement - On December 31, 2020, the Company entered a Preferred Supplier Agreement with Covarrubia Engineering. The Agreement provides for them to be awarded the engineering, procurement, and construction (EPC) contract for the Companies intended manufacturing facilities planned over the next five years provided they are competitive in the tender process. They in turn agreed to lend the Company $14 Million for two years at 2.65% on or before April 30th, 2021. This remains outstanding is now null and void.
F-16
TRANSACT ENERGY CORP.
[A Development Stage Company]
__________________________
NOTES TO FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
December 31, 2021
NOTE 11 - SUBSEQUENT EVENTS
None
F-17