|   | OMB APPROVAL |
|--------|--------------|

OMB Number: 3235-0416 

Expires: March 31, 2007 

Estimated average burden 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

**FORM 10-QSB**

(Mark One)

 

**x****QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended December 31, 2005**

 

or

 

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from _________ to _________

 

**GENERAL METALS CORPORATION**

(Exact Name of Small Business Registrant as Specified in its Charter)

 

 

| **Delaware**                                   | **000-24189**             | **65-0488983**                    |
|------------------------------------------------|---------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation) | (Commission File  Number) | (IRS Employer Identification No.) |

 

| **3163 Kennedy Boulevard, Jersey City, New Jersey** |   | **07306**  |
|-----------------------------------------------------|--------|------------|
| (Address of principal executive offices)            |   | (Zip Code) |

 

(201) 217-4137

(Registrant's telephone number, including area code)

 

Check whether the issuer (1) has filed all documents and reports required to be filed by Sections 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 filings for the past 90 days.   **YES****x**     NO   o

 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.)  **x****Yes**o No

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

As of February 8, 2006, the number of the Company's shares of par value $.001 common stock outstanding was 49,217,021.

 

Transitional Small Business Disclosure format (check one):  Yes o**No****x**

 

|   | SEC 2334 (9-05)                                                                           | **Potential persons who are to respond to the collection of information contained in this form are not**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 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|   | **required  to  respond unless the  form displays a currently valid OMB control number.** |  
 

 

1

 

 

 

**RECOV ENERGY CORP.**

FORM 10-QSB

December 31, 2005

 

INDEX

 

 

Part I – Financial Information

 

 

 

Item 1.  Consolidated Financial Statements (Unaudited)

3

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and

15

Results of Operations

 

 

 

Item 3.  Controls and Procedures

16

 

 

Part II – Other Information

 

 

 

Item 1.  Legal Proceedings

16

 

 

Item 2.  Changes in Securities and Use of Proceeds

16

 

 

Item 3. Defaults Upon Senior Securities

17

 

 

Item 4. Submission of Matters to a Vote of Security Holders

17

 

 

Item 5. Other Information

17

 

 

Item 6. Exhibits

18

 

 

Signature Page

19

 

 

 

 

 

 

 

 

2

 

 

 

**PART I - FINANCIAL INFORMATION**

**Item 1 - Financial Statements**

 

**RECOV ENERGY CORP**

 

 

 

 

 

 

**FKA  INTERACTIVE MULTIMEDIA NETWORK, INC.**

**CONSOLIDATED BALANCE SHEET**

 

 

 

 

 

 

 

**ASSETS**

 

 

 

**December31,**

 

**March 31,**

 

 

 

**2005**

 

**2005**

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

$

30,000

$

38

 

Accounts Receivable 

 

10,000

 

-

TOTAL CURRENT ASSETS

 

40,000

 

38

 

 

 

 

 

 

OTHER ASSETS

 

 

 

 

 

Property and equipment, net

 

3,257

 

15,123

TOTAL OTHER ASSETS

 

3,257

 

15,123

 

 

 

 

 

 

TOTAL ASSETS

$

43,257

$

15,161

 

 

 

 

 

 

**LIABILITIES AND SHAREHOLDERS' DEFICIT**

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable and accrued liabilities

$

246,498

$

210,019

 

Notes payable and accrued interest (principally related parties)

 

365,956

 

396,992

TOTAL CURRENT LIABILITIES

 

612,454

 

607,011

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

-

 

-

 

 

 

 

 

 

SHAREHOLDERS' DEFICIT

 

 

 

 

 

Preferred stock, $.001 par value, 50,000,000 shares   authorized, none issued and outstanding

 

-

 

-

 

 

 

 

 

 

Common stock, $.001 par value, 25,000,000 shares   authorized, 7,669,521 issued and outstanding - December 31,   2005 and 668,026 issued and outstanding - March 31, 2005

 

7,669

 

668

 

 

 

 

 

 

Paid-in-capital

 

3,429,157

 

3,359,631

 

Accumulated deficit 

 

(4,006,022)

 

(3,952,149)

TOTAL SHAREHOLDERS' DEFICIT

 

(569,197)

 

(591,850)

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT

$

43,257

$

15,161

See accompanying notes to financial statements.

 

 

 

 

3

 

 

 

 

**RECOV ENERGY CORP.**

 

 

 

 

 

 

 

 

 

 

**FKA   INTERACTIVE MULTIMEDIA NETWORK,INC.**

**CONSOLIDATED INCOME STATEMENT**

**DECEMBER 31, 2005**

 

 

 

 

 

 

 

 

 

 

 

 

**THREE MONTHS DECEMBER 31**

 

 

**NINE MONTHS  DECEMBER 31**

 

 

 

 

 

 

 

 

 

**RESTATED**

 

 

**2005**

 

**2004**

 

 

**2005**

 

**2004**

REVENUE

$

-

$

-

 

$

-

$

1,052

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Selling, general and  administrative expenses

 

16,367

 

7,866

 

 

39,817

 

39,320

Rent

 

300

 

300

 

 

900

 

900

Marketing

 

1,645

 

-

 

 

1,645

 

-

Interest expense

 

12,137

 

2,317

 

 

11,511

 

6,842

TOTAL EXPENSES

 

30,449

 

10,483

 

 

53,873

 

47,062

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM  CONTINUED OPERATIONS

 

(30,449)

 

(10,483)

 

 

(53,873)

 

(46,010)

 

 

 

 

 

 

 

 

 

 

DISCONTINUED  OPERATIONS:

 

 

 

 

 

 

 

 

 

Gain on reduction of  debt of discontinued subsidiary

 

-

 

-

 

 

-

 

440,492

NET INCOME / (LOSS)

$

(30,449)

$

(10,483)

 

$

(53,873)

$

394,482

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER  SHARE:

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON  SHARES

 

 

 

 

 

 

 

 

 

OUTSTANDING

 

5,204,304

 

668,011

 

 

4,764,614

 

662,475

 

 

 

 

 

 

 

 

 

 

CONTINUING OPERATIONS  LOSS PER SHARE

$

(0.006)

$

(0.016)

 

$

(0.011)

$

(0.069)

BASIC AND DILUTED  EARNINGS (LOSS) PER SHARE

$

(0.006)

$

(0.016)

 

$

(0.011)

$

0.595

 

 

4

 

 

 

See accompanying notes to financial statements.

 

5

 

 

 

 

**FKA  INTERACTIVE MULTIMEDIA NETWORK, INC.**

**CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT**

**NINE MONTHS ENDED DECEMBER 31, 2005**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total  

 

Preferred Stock

 

Common Stock

 

Paid in 

 

Stock

 

Accumulated

 

 Shareholder's 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Options

 

Deficit

 

 Equity/(Deficit) 

Balance, beginning April 01, 2004

-

 

-

 

653,511 

$

653 

$

2,955,986 

 

-

$

(3,842,290)

$

(885,651)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock 

-

 

-

 

7,500

 

8 

 

9,992 

 

-

 

-

 

10,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

-

 

-

 

7,000 

 

7

 

13,993 

 

-

 

-

 

14,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed rent expense

-

 

-

 

-

 

-

 

1,200 

 

-

 

-

 

1,200 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disposal of wholly owned subsidiaries

-

 

-

 

 

 

 

 

(15,000)

 

-

 

31,953 

 

16,953 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional shares due to reverse stock split 

-

 

-

 

15 

 

 

 

 

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beneficial conversion feature

-

 

-

 

 

 

 

 

393,460 

 

-

 

-

 

393,460 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

-

 

-

 

-

 

-

 

(141,812)

 

(141,812)

Balance, ended March 31, 2005

-

 

-

 

668,026 

 

668 

 

3,359,631 

 

-

 

(3,952,149)

 

(591,850)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of notes payable into common stock

-

 

-

 

3,921,495 

 

3,921 

 

68,626 

 

-

 

-

 

72,547 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed rent expense

-

 

-

 

-

 

-

 

900 

 

-

 

-

 

900 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

-

 

-

 

9,100,000 

 

9,100 

 

208,571 

 

-

 

-

 

217,671 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return of common stock for services

-

 

-

 

(6,100,000)

 

(6,100)

 

(208,571)

 

-

 

-

 

(214,671)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for 100% interest of   SoySlim

-

 

-

 

80,000 

 

80 

 

0 

 

-

 

-

 

80 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

-

 

-

 

-

 

-

 

-

 

-

 

(53,873)

 

(53,873)

Balance, ended December 31, 2005

 

 

 

 

7,669,521 

$

7,669 

$

3,429,157 

 

 

$

(4,006,022)

$

(569,197)

 

 

6

 

 

 

See accompanying notes to financial statements.

 

7

 

 

 

 

**RECOV ENERGY, CORP.**

 

 

 

 

 

 

**FKA  INTERACTIVE MULTIMEDIA NETWORK, INC.**

**CONSOLIDATED STATEMENT OF CASH FLOWS**

**NINE MONTHS ENDED  DECEMBER 31,**

 

 

 

 

 

**RESTATED**

 

 

 

**2005**

 

**2004**

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net  income / (loss)

$

(53,873)

$

394,482

Adjustments to reconcile net income / (loss) to net cash

 

 

 

used in operating activities:

 

 

 

 

Depreciation and amortization

 

77

 

5,163

 

Issuance of stock for services

 

3,000

 

14,000

 

Loss on disposal of fixed assets

 

1,869

 

-

 

Accrued interest, shareholders loan

 

11,511

 

6,842

 

Office rent applied to paid in capital

 

900

 

900

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(10,000)

 

7,874

 

Accounts payable and accrued liabilities

 

36,479

 

(441,565)

 

Notes payable and accrued interest

 

79

 

-

NET CASH USED IN OPERATING ACTIVITIES

(9,958)

 

(12,304)

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Sale of property and equipment

 

9,920

 

(2,150)

 

Minority interest paid in capital from subsidiary acquisition (net)

 

-

 

1,747

NET CASH PROVIDED BY INVESTING ACTIVITIES

 

9,920

 

(403)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from shareholder loans

 

-

 

4,129

 

Proceeds from  loans

 

30,000

 

-

 

Additional paid-in-capital

 

-

 

9,850

 

Issuance of common stock

 

-

 

150

NET CASH PROVIDED BY FINANCING ACTIVITIES

30,000

 

14,129

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH

29,962

 

1,422

CASH, BEGINNING OF PERIOD

38

 

536

CASH, END OF PERIOD

$

30,000

$

1,958

 

 

 

 

 

 

**SUPPLEMENTAL INFORMATION:**

 

 

 

Issuance of shares for 100% ownership of SoySlim

$

80

 

-

Issuance of shares in payment of services

$

3,000,000

$

14,000

 

 

8

 

 

 

See accompanying notes to financial statements.

 

9

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

 

RECOV Energy, Corp., f/k/a Interactive Multimedia Network, Inc. (the “Company”) was organized in the State of New Jersey on March 04, 1994 and reincorporated in the State of Delaware on September 13, 1995.  Effective March 29, 2005, the name of the Company changed to RECOV Energy, Corp.. The Company is a shell company that is actively seeking a potential merger or acquisition candidate. 

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-QSB of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, such interim statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented. The results of operations for these interim periods are not necessarily indicative of the results to be expected for the year ending March 31, 2006. These financial statements should be read in conjunction with the audited financial statements and footnotes included inthe Company's annual report on Form 10-KSB/3 for the year ended March 31, 2005 as filed on November 2, 2005

 

The Company had two subsidiaries:  AutoSmart USA, Inc., a Nevada corporation and AutoSmart USA Leasing, Inc., a Florida corporation, which operate in tandem the vehicle sales operations of the Company.  During the fiscal year ended March 31, 2002, these two subsidiaries ceased operations.

 

RECOV Energy, Corp. prepares its financial statements in accordance with generally accepted accounting principles.  This basis of accounting involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. Financial statement items are recorded at historical cost and may not necessarily represent current values.

 

The applicable opening balances in the stockholders' equity accounts were restated to reflect a reverse stock split which was effective March 15, 2005

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

*Principles of Consolidation*

 

The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation. 

 

*Use of Estimates*

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Certain amounts included in the financial statements are estimated based on currently available information and management’s judgment as to the outcome of future conditions and circumstances.  Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of financial statements and actual results could differ from the estimates and assumptions.  Every effort is made to ensure the integrity of such estimates.

 

 

10

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

*Fair value of Financial Instruments*

 

The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued expenses and other liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments.  

 

*Property and Equipment*

 

Property and equipment are stated at cost less accumulated depreciation.  Depreciation is computed using the straight-line method over the estimated useful lives when the property and equipment is placed in service. 

 

 

Estimate Useful Life

 
 

(In Years)  

      

 

 

Furniture and Fixtures

7

 

Equipment & Vehicles  

5

 

Computer Equipment & Software  

3

 

Leasehold improvements are amortized over their estimated useful lives or the estimated useful lives of the leasehold improvements, whichever is shorter.

 

The cost of fixed assets retired or sold, together with the related accumulated depreciation, are removed from the appropriate asset and depreciation accounts, and the resulting gain or loss is included in operations.  Maintenance and repairs are expensed as incurred. Repairs and maintenance are charged to operations as incurred, and expenditures for significant improvements are capitalized. 

 

*Revenue Recognition*

 

Revenues are principally from services and commissions from providing marketing plans, services related to the Internet marketing arena and sales from health related products.  Revenues from marketing and Internet related activity are recognized when the services are completed.  

 

In December 2003, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition,” which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC.  SAB 104 outlines the basic criteria that must be met to recognize revenue and provide guidance for disclosures related to revenue recognition policies.  Management believes that RECOV Energy, Corp.’s revenue recognition practices are in conformity with the guidelines of SAB 104.  

 

*Advertising*

 

The Company expenses advertising costs as incurred.  There was no advertising expense for the nine months ended December 31, 2005 and 2004.

 

 

11

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

 

*Earnings (Loss) per Share of Common Stock*

 

Earnings (Loss) per common share are calculated under the provisions of SFAS No. 128, “Earnings per Share,” which establishes standards for computing and presenting earnings (loss) per share.  SFAS No. 128 requires the Company to report both basic earnings (loss) per share, which is based on the weighted-average number of common shares outstanding during the period, and diluted earnings (loss) per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive common shares outstanding.  Options and warrants have not been considered in calculating diluted earnings (loss) per share since considering such items would have an anti-dilutive effect.

 

*Statement of Cash Flows*

 

For purposes of the statement of cash flows, as applicable, the Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. 

 

*Recent Accounting Pronouncements:*

 

The Statement of Financial Accounting Standards Board (SFAS) No. 141, “Business Combinations,” was issued by the Financial Accounting Standards Board (FASB) in July 2001.  This Statement establishes standards for accounting and reporting for business combinations.  This statement requires the purchase method of accounting to be used for all business combinations, and prohibits the pooling-of-interests method of accounting.  This Statement is effective for all business combinations initiated after September 30, 2001 and supersedes APB Opinion No. 16, “Business Combinations” as well as Financial Accounting Standards Board Statement of Financial Accounting Standards No. 38, “Accounting for Preacquisition Contingencies of Purchased Enterprises.”  The adoption of this statement by the Company did not have a material impact on its financial condition or results of operations.

 

The Statement of Financial Accounting Standards Board (SFAS) No. 142, “Goodwill and Other Intangible Assets,” was issued by the Financial Accounting Standards Board (FASB) in July 2001.  This Statement addresses how intangible assets that are acquired individually or with a group of other assets should be accounted for in financial statements upon their acquisition.  This statement requires goodwill amortization to cease and for goodwill to be periodically reviewed for impairment, for fiscal years beginning after October 31, 2001.  SFAS No. 142 supersedes APB Opinion No. 17, “Intangible Assets.” The adoption of this statement by the Company did not have a material impact on its financial condition or results of operations.

 

The Statement of Financial Accounting Standards Board (SFAS) No. 143, “Accounting for Asset Retirement Obligation,” was issued by the Financial Accounting Standards Board (FASB) in August 2001.  This Statement requires companies to record a liability for asset retirement obligations in the period in which they are incurred, which typically could be upon completion or shortly thereafter.  The FASB decided to limit the scope to legal obligation and the liability will be recorded at fair value.  The adoption of this statement by the Company did not have a material impact on its financial condition or results of operations.

 

The Statement of Financial Accounting Standards Board (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” was issued by the Financial Accounting Standards Board (FASB) in October 2001.  This Statement provides a single accounting model for long-lived assets to be disposed of and replaces SFAS No. 121 “Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of.”  This Statement is effective for fiscal years beginning after December 15, 2001. The adoption of this statement by the Company did not have a material impact on its financial condition or results of operations.

 

12

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

NOTE 3 – PROPERTY, EQUIPMENT AND ACCUMULATED DEPRECIATION

 

 

 

 

 

Property and equipment, net, at December 31, 2005 and March 31,  2005 consists of the following:

 

 

 

 

 

Dec. 31, 2005

March 31, 2005

Furniture & Fixtures

 

4,770

4,770

Equipment

 

5,137

5,137

Computer Equipment

 

-

27,254

Software

 

-

1,626

Website

 

-

10,000

 

 

9,907

48,787

Less:  Accumulated depreciation and amortization

6,650

33.664

Property and equipment, net 

3,257

15,123

 

The Company sold its Computer Equipment, Software and Website to its former subsidiary, Best Health, Inc.

 

NOTE 4 – COMMITMENTS AND CONTINGENCIES - LITIGATION

 

In October 2001, the Company’s wholly owned subsidiaries, AutoSmart USA, Inc. and AutoSmart Leasing USA, Inc. ceased operations.  AutoSmart Leasing USA, Inc. et. al. are currently the defendants in one lawsuit in which the total amount being requested for recovery is approximately $175,000, plus legal fees and interest.  The Plaintiff in this matter has been granted a motion to enjoin the Company as a co-defendant in this matter.  The Company has filed for Summary Judgment in this matter.  Management and its counsel believe that the Plaintiff’s motion against the Company is without merit and will be favorably resolved. 

 

AutoSmart Leasing USA, Inc has no assets and the corporation was administratively dissolved pursuant to Florida law on October 4, 2002.  To the best of management's knowledge and belief, should the plaintiff in this lawsuit prevail against AutoSmart Leasing USA, Inc. or the other named defendants, the ultimate outcome of this matter would have no effect on the Company.

 

Further due to the dissolution of both of these subsidiaries, pursuant to applicable state law, the Company has been advised by counsel that it has no liability for any unpaid obligations of either company. 

 

NOTE 5 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has sustained continuing operating losses and has net working capital and shareholders’ equity deficits at December 31, 2005.  Currently the Company has no operating business or source of revenue.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management anticipates that additional investments will be needed to develop an effective sales and marketing program before the organization will generate sufficient cash flow from operations to meet current operating expenses and 

 

13

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

Note 5 – GOING CONCERN – (continued)

 

overhead. Management has continued to develop a strategic plan to develop a management team, maintain reporting compliance and seek new expansive areas in marketing through multiple media channels. Management intends to seek new capital from new equity security issuances that will provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. There is no assurance that management will be successful in these endeavors.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.   

 

NOTE 6 –  SUBSIDIARY RELATED TRANSACTIONS

 

In October 2001 the Company ceased operations of its wholly-owned subsidiaries, Auto Smart USA, Inc. (a Nevada corp.) and AutoSmart Leasing USA, Inc. (a Florida corp.)  After not receiving a timely annual report for the corporation, the state of Nevada revoked the corporate charter of Auto Smart USA, Inc. in December of 1999.  This revoked status subsequently became permanent.  On October 4, 2002, AutoSmart USA Leasing, Inc. was administratively dissolved pursuant to Florida law, for failure to file an annual report.  

 

The Company’s legal counsel has advised the Company that the shareholders of an administratively dissolved Florida corporation are not responsible for the debts of that corporation.  Management has applied this same premise to the Nevada corporation and considers the effect of the administrative dissolutions to be the equivalent of legal releases.  The Company did not initially de-recognize these liabilities, consisting of various third party trade payables and certain other accruals, from its consolidated balance sheet due to the possibility that the trade creditors of the two subsidiaries might attempt to pierce their corporate veils and proceed against the Company or its corporate predecessor.  

 

During the first quarter of our fiscal year ended March 31, 2005, management determined that this contingency was removed with respect to $882,812 of the liabilities of these two subsidiaries and the Company de-recognized aggregate liabilities in this amount. 

 

Management’s determination was based on: (i) the settlement of two outstanding lawsuits; in one the Company was a named party and in the other, the applicable debt was guaranteed by an officer of the Company, whose guarantee had been given in furtherance of the subsidiary’s business while it was operating, (ii) there then being no other matters naming the Company with respect to either subsidiary then pending, and (iii) no claims had been brought against the Company with respect to the trade liabilities of either company.  Accordingly management determined that the likelihood of a trade or other creditor coming forward at that date and then successfully piercing either corporate veil was remote.

 

During the quarter ended March 31, 2005 it was determined that $221,160 of debt principal and accrued interest included in the first quarter write-off should not have been de-recognized and the gain originally taken in the first quarter was reduced by that amount.  The net credit arising from the elimination of these liabilities from the Company’s consolidated balance sheet is reported as a gain on the statement of operations due to the fact that the release of the liabilities is based on Florida and Nevada statutes and that none of the liabilities involved were due to related parties. 

 

On February 17, 2005, the Company’s Board of Directors voted to divest itself of Best Health, Inc. and SoySlim. This was effectuated by declaring and issuing a stock dividend on March 28, 2005 to all shareholders of record on 

 

 

14

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

NOTE 6 –  SUBSIDIARY RELATED TRANSACTIONS – (continued)

 

February 17, 2005. To accomplish this divestiture, the shares owned by the Company were returned to its subsidiaries.  Concurrently Best Health, Inc. and SoySlim, Corp. each issued one share of its own common stock to each shareholder of the Company on a one to one basis. The Company incurred a net loss of $10,841 on the divestiture of these two subsidiaries.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

The Company has been involved in periodic transactions, whereby money has been loaned to the former President of the Company and the former President of the Company has loaned money to the Company.  There were no loans to this party during the six month period ended December 31, 2005 and the year ended March 31, 2005.  The Company was obligated to the former President for notes payable and accrued interest of $259,182 and $255,935 as of December 31, 2005 and March 31, 2005 respectively. 

 

Legal services to RECOV Energy Corp. have been performed by Verdiramo & Verdiramo, P.A.  This professional association is owned by Vincent L. Verdiramo, the former President of RECOV Energy Corp. and his son Vincent S. Verdiramo.  The cost of legal services billed to the Company was $ -0- and $20,264 for December 31, 2005 and December 31, 2004. The amount outstanding to this professional association was $110,784 and $105,784 as of December 31, 2005 and March 31, 2005 and is included in Accounts Payable and Accrued Liabilities.

 

Verdiramo & Verdiramo, P.A. is providing limited use of office space to RECOV Energy Corp.  Although Verdiramo & Verdiramo, P.A. has agreed not to charge rent and is not expecting payment from the Company for the office use, an amount has been reflected in the financial statements as rent expense with an offset to paid-in capital in the amount of $600 in both periods ended December 31, 2005 and 2004, respectively. 

 

The Company has received loans and advances from stockholders and related parties. These transactions are in the form of unsecured convertible demand loans bearing interest of 6% to 15% per annum.  The total balance due was $338,618 and $396,992 as of December 31, 2005 and March 31, 2005, respectively. This includes approximately $146,069 and $170,099 of accrued interest as of December 31, 2005 and March 31, 2005, respectively.  Effective February 9, 2005, the rate of conversion for these notes was reduced from $0.10 per common share to $0.0185 per common share. As of March 31, 2005, the Company recognized a beneficial conversion feature attributable to the reduction in the conversion price of these convertible demand notes, the effect of which has been to record imputed interest expense in the amount of $393,460.

 

During the nine months ended December 31, 2005, the Company issued 3,921,495 shares of common stock, in conversion of $72,548 of convertible notes payable.  The conversion price was $0.0185 per share.  The Company received an opinion from counsel that the shares issued in these transactions were free trading.

 

On December 23, 2005, the Company signed a promissory note to General Gold Corporation in the amount of $30,000.  The note bears nominal interest and is payable by March 30, 2006 if the Company’s acquisition of General Gold does not close by that date. 

 

15

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

NOTE 8 – STOCKHOLDER’S EQUITY

 

*Preferred Stock*

 

Effective March 29, 2005 the Company increased its authorization of preferred stock from 5,000,000 shares with a par value of $0.001 to 50,000,000 shares with a par value of $0.001.  To date no preferred shares have been issued.  The preferred stock contains no voting privileges and is not entitled to accrue dividends or convert into shares of the Company’s common stock.

 

*Common Stock*

 

Effective March 29, 2005 the Company increased its authorization of common stock from 25,000,000 shares to 200,000,000 shares, with no change in the par value of $0.001. 

 

Effective on the close of business on March 28, 2005 the Company implemented a reverse split of the common stock on the basis of twenty shares pre-split for one share post-split. The number of common shares outstanding at the close of business March 28, 2005 was 13,360,211. The number of common shares outstanding was 7,669,521 and 668,011 as of December 31, 2005 and March 31, 2005, respectively.

 

*Paid in Capital*

 

The Company recognized an increase in paid-in capital for the amount of imputed interest expense related to the beneficial conversion feature of its convertible demand notes and the value of rent contributed by Verdiramo and Verdiramo, P.A.

 

NOTE 9 – INCOME TAXES

 

The Company did not provide any current or deferred federal or state income tax provision or benefit for the periods ended December 31, 2005 and 2004, due to operating losses incurred since inception. The Company has provided a full valuation allowance on the deferred tax asset, consisting primarily of net operating loss carryforwards, because of the uncertainty regarding its realizability.

 

NOTE 10 – COMMITMENTS AND CONTINGENCIES - OTHER

 

The Company had acquired two products from another entity. Under the terms governing these purchases, the Company had to fund the development of these products. The Company has not been able to meet its obligations so it returned all rights title and interest in these products to the other entity. In exchange, the entity has agreed to absorb and meet any and all financial obligations associated with these two products.

 

NOTE 11 – SUBSEQUENT EVENTS

 

On January 26, 2006 the Company changed its name to General Metals Corporation.  It is now traded on the Over-the-Counter Bulletin Board under the ticker symbol “GNLM”.

 

On January 25, 2006 the Company acquired General Gold Corporation in a stock transaction.  The Company issued 36,097,500 shares of restricted common stock to the shareholders of General Gold Corporation as payment under the terms of the Acquisition Agreement. These shares are to be held in escrow pending the Final Closing which will occur once the following conditions are met:

 

16

 

 

 

**RECOV ENERGY CORP.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER 31, 2005**

 

Conditions to the Final Closing of the Acquisition Agreement:

The closing of the Acquisition Agreement is subject to the satisfaction of conditions to closing as set forth in the Acquisition Agreement including but not limited to the following:

 

**•**

the Company and General Gold will receive duly executed copies of all consents and approvals contemplated by the Acquisition Agreement:

 

**•**

the Company and General Gold  will receive a duly executed copy of a legal opinion from each other as contemplated by the Acquisition Agreement;

 

**•**

no material adverse effect will occur with the business or assets of the company or General Gold  since the effective date of the Acquisition Agreement

 

**•**

no suit, action or proceeding will be pending or threatened which would (i) prevent the consummation of any of the transactions contemplated by the Acquisition Agreement; or (ii) cause the transaction to be rescinded following consummation; and,

 

**•**

General Gold will receive a resignation from one of the directors of the company.

Due to conditions to closing, including those set out above, and the risk that the conditions precedent will not be satisfied, there is no assurance that the Company will complete the share exchange as contemplated in the Acquisition Agreement. In the event that all closing conditions for the Acquisition Agreement are not satisfied or waived, the shares that have been issued in escrow for the General Gold shareholders will be canceled.

 

17

 

 

 

**Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.**

 

During the nine month period ended December 31, 2005, the Company continued its search for an acquisition candidate and management widened its search for target companies beyond the energy reclamation industry, especially the mining and exploration industry.  Subsequent to December 31, 2005, we entered into an acquisition agreement with General Gold Corporation (www.generalgold.com).  We have filed Forms 8K related to this acquisition on February 2 and February 8, 2006.  When the terms of the acquisition are complete a Form 8K with more detailed information will be filed.  See the Financial Statements, and Part II Items 2 and 5 for additional subsequent event discussion.  As of January 26, 2006, Recov Energy Corp was renamed General Metals Corporation by an action of majority shareholders.

 

**Results of Operations**

 

*Three month and Nine Month Periods Ended December 31, 2005 and 2004*

 

During the three month period ending December 31, 2005, the Company incurred net loss from operations of $30,449 compared to a net loss of $10,483 for the same period ended December 31, 2004.  The main component contributing to this increase was an increase in Selling, General and Administrative expenses and Interest expenses. 

 

During the nine month period ending December 31, 2005, the Company incurred a loss from operations of $53,873 compared to a loss of $46,010 for the same period ended December 31, 2004.  The main component contributing to the decrease in the loss was an increase in interest expenses for the period.

 

Additionally, during the nine month period ended December 31, 2004, the Company recognized a gain on the reduction of debt of a discontinued subsidiary of $440,492. This was an extraordinary item associated with the Company’s former AutoSmart subsidiaries.

 

Revenues

 

During the three month period ending December 31, 2005, the Company’s revenues from operations $-0- compared to $-0- for the same period ended December 31, 2004.  The Company currently had no business activities as of the period ended December 31, 2005. 

 

During the nine month period ending December 31, 2005, the Company’s revenues from operations $-0- compared to $1,052 for the same period ended December 31, 2004.  This decrease was the result of the Company having spun off its two subsidiaries as a stock dividend to its shareholders effective March 28, 2005. Revenues for the period ended December 31, 2004 were from the provision of marketing services which are recognized when the services are completed.  

 

Operating Expenses

 

During the three months ended December 31, 2005, the Company incurred $30,449 in operating expenses from operations as compared to $10,483 in the same period in 2004. This increase was due to an increase in Selling, General and Administrative expenses and Interest expenses 

 

During the nine months ended December 31, 2005, the Company incurred $53,873 in operating expenses from operations as compared to $46,010 in the same period in 2004. This increase was due to an increase in interest expenses of $4,669 during the nine month period ended December 31, 2005 compared to the same period ended December 31, 2004. 

 

Material changes in financial condition, liquidity and capital resources

 

At December 31, 2005, the Company had $30,000 in cash and cash equivalents compared to $38 in cash at March 31, 2005, this increase was the result of a short term loan. The Company had a negative working capital of approximately $572,454 at December 31, 2005.  The Company currently has no revenue producing operations.  The Company has reviewed all non-essential activities and expenditures and has aggressively curtailed these items to assist in reducing the cash used in operating activities. 

 

18

 

 

 

 

 

**Item 3.**

**Controls and Procedures**

 

**Evaluation of Disclosure Controls and Procedures**

 

The Registrant’s President and Principal Accounting Officer have evaluated the Registrant’s disclosure controls and procedures within 90 days of the original filing date of this quarterly report.  Based upon this evaluation, the Registrant’s President and Principal Accounting Officer then concluded that the Registrant’s disclosure controls and procedures were effective in ensuring that material information required to be disclosed is included in the reports that it files with the Securities and Exchange Commission.

 

During the period covered by this report the Company has added a CFO to its management team. The Company’s certifying officer now concludes that its system of disclosure controls and procedures is effective in ensuring that material information required to be disclosed is included in the reports that it files with the SEC.  

 

There were no other significant changes in the Registrant’s internal controls or, to the knowledge of the management of the Registrant, in other factors that could significantly affect these controls subsequent to the evaluation date.

 

**PART II - OTHER INFORMATION**

 

**Item 1.  Legal Proceedings.**

 

The Company's discontinued subsidiary AutoSmart Leasing USA, Inc., is a party to in one lawsuit:  SunTrust Bank v. AutoSmart Leasing USA, Inc., William Auletta, et al., Case No. 02-6512 (08) Complaint over $15,000, 17th Judicial Circuit, Broward County.  This case is open and pending.  The total prayer for relief is $175,000 plus legal fees and interest.  This case relates to certain automotive sales related transactions between AutoSmart Leasing USA, Inc. and certain automotive dealerships and lenders. The Plaintiff in this matter has been granted a motion to enjoin the Company as a co-defendant in this matter.  The Company has filed for Summary Judgment in this matter.  Management and its counsel believe that the Plaintiff’s motion against the Company is without merit and will be favorably resolved. 

 

AutoSmart Leasing USA, Inc has no assets and the corporation was administratively dissolved pursuant to Florida law on October 4, 2002.  To the best of management's knowledge and belief, should the plaintiff in this lawsuit prevail against AutoSmart Leasing USA, Inc. or the other named defendants, the ultimate outcome of this matter would have no effect on the Company.

 

Further due to the dissolution of both of these subsidiaries, pursuant to applicable state law, the Company has been advised by counsel that it has no liability for any unpaid obligations of either company.

 

**Item 2.  Changes in Securities.**

 

During the period ended December 31, 2005, the Company issued 800,000 shares of common stock, in conversion of $14,800 of convertible notes payable.  The conversion price was $0.0185 per share.  

 

During the period ended December 31, 2005, the Company issued 3,000,000 restricted shares pursuant to an exemption under Section 4(2) to members of management for services rendered and as a signing bonus to its newly hired COO. 

 

Subsequent events:

 

On February 2, 2006, the Company filed an 8K announcing the issuance of 36,097,500 shares of restricted common stock on January 25, 2006 to the shareholders of General Gold Corporation as payment under the terms of the Acquisition Agreement which was signed on that same date.  These shares are to be held in escrow pending the Final Closing which will occur once the following conditions are met:

 

*Conditions* *to the Final Closing of the Acquisition Agreement:*

 

The closing of the Acquisition Agreement is subject to the satisfaction of conditions to closing as set forth in the Acquisition Agreement including but not limited to the following:

 

 

**•**

our company and General Gold will receive duly executed copies of all consents and approvals contemplated by the Acquisition Agreement ;

 

**•**

our company and General Gold  will receive a duly executed copy of a legal opinion from each other as contemplated by the Acquisition Agreement ;

 

**•**

no material adverse effect will occur with the business or assets of our company or General Gold  since the effective date of the Acquisition Agreement ;

 

**•**

no suit, action or proceeding will be pending or threatened which would (i) prevent the consummation of any of the transactions contemplated by the Acquisition Agreement; or (ii) cause the transaction to be rescinded following consummation; and
**•**General Gold  will receive a resignation from one of the directors of our company.
 

Due to conditions to closing, including those set out above, and the risk that the conditions precedent will not be satisfied, there is no assurance that our Company will complete the share exchange as contemplated in the Acquisition Agreement. In the event that all closing conditions for the Acquisition Agreement are not satisfied or waived, the shares that have been issued in escrow for the General Gold shareholders will be canceled.

 

Upon conclusion of this closing process, an 8-K containing more detailed information regarding the Company’s acquisition of General Gold Corporation will be filed.

 

The Company issued 4,950,000 shares of its common stock on January 25, 2006.  These shares were issued in partial conversion of the convertible demand notes payable.  In this action the Company decreased its note payable debt by $91,575.

 

Additionally, on February 8, 2006 the Company issued 500,000 shares of common stock to David Salari as a signing bonus for joining the Company’s board of directors.

 

**Item 3.  Defaults Upon Senior Securities.**

 

NONE

 

**Item 4.  Submission of Matters to a Vote of Security-Holders.**

 

On December 30, 2005 a PRE 14 C was filed giving notice of an action of majority shareholders to change the name of the Company from RECOV Energy, Corp. to General Metals Corporation.   This name change became effective on January 26, 2006.

 

**Item 5.  Other Information.**

 

On December 20, 2005, the Company filed a Form 8K disclosing a change of control.  On November 30, 2005, the Company issued 2,000,000 shares of restricted common stock to Mr. Stephen Parent as a signing bonus to induce him to join the Company and to lead the movement of the Company into the mining and exploration sector.  Effective with this issuance coupled with shares he purchased in the open market, Mr. Parent owns 2,150,000 shares of the Company’s common stock which represents 34.29% of the outstanding shares of common stock.  The former and current control groups agreed that the management and board of the Company would remain the same, except for the resignation of Mr. Robert J. Gilbert who resigned from his position as COO in favor of Mr. Parent so as to more thoroughly focus on the business operations of the Company’s former subsidiary, Best Health, Inc.

 

Subsequent events:

 

On February 8, 2006, the Company filed an 8K announcing that it has appointed David J. Salari P.Eng. to its board of directors.  

 

See the Financial Statements, Management’s Discussion and Analysis, and Part II, Item 2 for further discussion of subsequent events.

 

**Item 6.  Exhibits.**

 

Exhibit 31.1 – Certification required by Rule 13a-14(a) or Rule 15d-14(a). Verdiramo

Exhibit 31.2 – Certification required by Rule 13a-14(a) or Rule 15d-14(a). Porter

 

Exhibit 32.1 – Certification required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Verdiramo

Exhibit 32.2 – Certification required by Rule 13a-14(b) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Porter

 

**SIGNATURES**

 

In accordance with the requirements of the Security Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, duly authorized.

 

**GENERAL GOLD CORPORATION**

Date:  February 20, 2006

 

By: /s/ Richard J. Verdiramo

----------------------------------------------------------

Richard J. Verdiramo, President

 

By:  /s/ L. James Porter

----------------------------------------------------------

L. James Porter, Chief Financial Officer

 

 

19

 

 

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