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 Index to Financial Statements


UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
   þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2010ORo
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________
  Commission File No. 333-136583
  
 GREEN PLANET GROUP, INC.
 (Name of the small business issuer as specified in its charter)
 Nevada
41-2145716(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification Number)33747 N. Scottsdale Rd., Suite 130, Scottsdale, AZ
85266(Address of principal executive offices)
(Zip Code)
  Registrant’s telephone number, including area code:  (480) 222-6222
  Securities registered pursuant to Section 12(b) of the Act:  None
  Securities registered pursuant to section 12(g) of the Act:  Common Stock, $0.001 par value


Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Act). Yes  oNo þ




Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  oNo þ




Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þNo o





Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K    þ




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 Index to Financial Statements




Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:




Large Accelerated Filer    o
Accelerated Filer    o
Non-Accelerated Filer   o
Smaller Reporting Company    þ




Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  oNo þ




The aggregate market value of Common Stock, $.001 par value, held by non-affiliates of the registrant based on the closing sales price of the Common Stock on the OCT:BB on July 13, 2010, was $2,276,779.
 
 The number of shares of common stock outstanding as of July 13, 2010 was 150,674,739.
 
 Documents incorporated by reference: None.


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TABLE OF CONTENTS
 PageStatement Regarding Forward-Looking Statements
4Part I


5Item 1
Description of Business
5Item 1A
Risk Factors
13Item 1B
Unresolved Staff Comments
21Item 2
Description of Property
21Item 3
Legal Proceedings
22Item 4
Removed and Reserved
22Part II


23Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
23Item 6
Selected Financial Data
24Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
25Item 7A
Quantitative and Qualitative Disclosure About Market Risk
36Item 8
Financial Statements and Supplementary Data
37Item 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
37Item 9A(T)
Controls and Procedures
37Item 9B
Other Information
38Part III


39Item 10
Directors, Executive Officers and Corporate Governance
39Item 11
Executive Compensation
41Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
42Item 13
Certain Relationships and Related Transactions, and Director Independence
43Item 14
Principal Accountant Fees and Services
44Part IV


45Item 15
Exhibits, Financial Statement Schedules
45Signatures
46Exhibit Index
47Financial Statements
F-1
  EXHIBIT 21.1  List of SubsidiariesEXHIBIT 31.1  Officer’s Certificate Pursuant to Section 302EXHIBIT 31.2  Officer’s Certificate Pursuant to Section 302EXHIBIT 32.1  Certificate Pursuant to 18 U.S.C. Section 1350EXHIBIT 32.2  Certificate Pursuant to 18 U.S.C. Section 1350
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 STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 In addition to historical information, this Annual Report on Form 10-K (“Annual Report”) for Green Planet Group, Inc. (“Green Planet,” “GPG,” the “Company,” “we,” “our” or “us”) contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding the growth of product lines, optimism regarding the business, expanding sales and other statements. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of our products. In addition, actual results could vary materially based on changes or slower growth in the fuel additive products market or the staffing market; the potential inability to realize expected benefits from new products and products under development; domestic and international business and economic conditions; changes in the petroleum and staffing industries; unexpected difficulties in penetrating the commercial and industrial markets for our products; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufactured raw material and manufacturing capacity; future production variables impacting excess inventory and other risk factors listed in the section of this Annual Report entitled “Risk Factors” and from time to time in our Securities and Exchange Commission filings under “risk factors” and elsewhere.
  Each forward-looking statement should be read in context with, and with an understanding of, the various disclosures concerning our business made elsewhere in this Annual Report, as well as other public reports filed by us with the United States Securities and Exchange Commission. Readers should not place undue reliance on any forward-looking statement as a prediction of actual results of developments. Except as required by applicable law or regulation, we undertake no obligation to update or revise any forward-looking statement contained in this Annual Report.
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  PART I
 
 ITEM 1.
DESCRIPTION OF BUSINESS
  Introduction
  We are engaged in the research, development, manufacturing and distribution of a variety of products that improve overall energy efficiency with a specific concentration on petroleum based energy sources. We currently have four wholly owned operating subsidiaries, EMTA Corp, XenTx Lubricants, Inc., White Sands, L.L.C., and Lumea, Inc.
  EMTA Corp has developed a new type of lubricant (metal conditioner) that interacts with metal surfaces. It hardens and smoothes the metals’ surface which results in reduced friction and therefore improves efficiency. We market this unique product under the brand name XenTx Extreme Engine Treatment, to both commercial/industrial users and to the general public. Today XenTx is available at a variety of retail stores, as well as many smaller auto-parts chains throughout the U.S. The product is also available in Canada and, more recently, in Mexico. In addition to our core products, we utilize the same technology in three new products that are in the initial stages of distribution, including an all purpose spray lubricant (XenTx Extreme Lubricating Spray), friction reducing automatic transmission fluid (XenTx Extreme Transmission Treatment), and a gasoline system cleaner (XenTx Extreme Fuel System Treatment).
  XenTx Lubricants, Inc. (“XenTx Lube”) manufactures and sells automotive, industrial and racing performance oils and lubricants under the name Synergyn Racing or Synergyn Performance. The Synergyn products have been manufactured and distributed for the past 20 years and are sold throughout the U.S.
  White Sands’ core products are primarily designed to aid in the combustion of diesel fuel. It has developed two distinct diesel fuel additives, Clean Boost improves combustion efficiency and reduces pollution and particulate emissions significantly. In addition, Clean Boost Low-Emissions (“Clean Boost LE”) insures that diesel fuel users will be able to meet or exceed the new, more stringent emissions rules. This product was first certified by the EPA and the Texas Commission on Environmental Quality (“TCEQ”) on March 26, 2007.  In June 2008, the Company received an unconditional approval for the Clean Boost LE product from the TCEQ.
  Lumea, Inc. was formed for the purpose of implementing a roll-up strategy in the light industrial (green) staffing space. This type of staffing company provides unskilled and semi-skilled laborers to large industrial and commercial corporations that have significant fluctuations in manpower needs. The strategy of acquiring well established light industrial staffing companies provides access to major industrial/commercial customers that are targets for the Company’s energy efficiency and emission reducing technologies.
  Corporate History
  We were incorporated under the laws of Louisiana on June 5, 1978 under the name Forum Mortgage Corp. We were reincorporated under the laws of the State of Nevada in July 2004 under the name Omni Alliance Group, Inc.
  On March 31, 2006 we acquired EMTA Corp., Inc. (“EMTA”) in consideration for the issuance to EMTA’s shareholders of 30,828,989 shares of our common stock. At that time we also implemented a 233 for one reverse stock split and changed our name to EMTA Holdings, Inc. The acquisition of EMTA was accounted for as a reverse merger. As a result, the financial statements of EMTA Corp. became our financial statements.  On May 20, 2009, the Company merged with a wholly owned Nevada subsidiary and changed its name to Green Planet Group, Inc.
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 EMTA Corp. was incorporated in March 2002 under the laws of the State of Nevada under the name Wiltex A, Inc. On October 1, 2004, Wiltex acquired the assets of Alaco Corporation in exchange for approximately 94% of the common stock of Wiltex. On that same date, it changed its name to EMTA Corp. Inc.
  The Company acquired White Sands, L.L.C. (“White Sands”) for 897,487 shares of EMTA Holdings (“Holdings”) common stock as of March 31, 2006, at which time White Sands became a wholly-owned subsidiary of Green Planet Group, Inc.
  Effective January 1, 2007, the Company took control of XenTx Lubricants, Inc. for an aggregate purchase price of $2,100,000 which included cash, stock and warrants. An initial payment of $100,000 was made on January 9, 2007 and a second cash payment of $150,000 was made on July 5, 2007 with the balance of $254,240 due in October, 2010. On March 26, 2007, the Company issued the seller 1,400,000 shares of common stock and cashless warrants to acquire 1,400,000 shares of common stock at an exercise price of $0.75 per share. These warrants expired on March 26, 2010. In addition, the Company agreed to pay a royalty on all products sold that contain the Synergyn formulations.
  Three of Lumea, Inc.’s subsidiaries: Lumea Staffing, Inc., Lumea Staffing of California and Lumea Staffing of Illinois, Inc. were incorporated on February 26, 2009 under the laws of the State of Nevada. They were formed to acquire selected assets and liabilities from Easy Staffing Solutions, Inc. The effective date of the asset purchase was March 1, 2009. The Company acquired these assets for 21.7 million shares of GPG common stock valued at $1,084,983, of which 6.7 million shares were issued to consultants, and notes for $8,750,000. In addition, it agreed to assume $2,505,694 of Accounts Payable debt and issued 2,500,000 stock options valued at $124,075 exercisable over 8 years. In conjunction with litigation against the sellers the Company has ceased payments on the notes and has cancelled the outstanding stock options and will not honor any conversion.
  Our Products
  XenTx Extreme Engine Treatment
  Through our wholly-owned subsidiary, EMTA Corp., we market XenTx Extreme Engine Treatment, a 100% synthetic metal conditioner that provides benefits to automobile engines in that it prevents the build-up of engine metal particles in the walls of the engine. As an additive to standard engine oils, it attracts the loose particles of ferrous metals present in most oils and directs those particles to broken molecular chains that exist on the surface of the friction environment, in this case the engine walls. The product penetrates the carbon build up on the cylinder walls and attaches to the surface of the metal carrying wear metals molecules with it. The product continuously fills the pits, cracks, and slight imperfections present in all engine cylinders. In this way, it creates a dense protective surface that is highly resistant to scuffing and galling.
  The process has both a cleaning effect on the engine and a smoothing effect on the engine cylinder surface. This results in less friction, lower operating temperatures and less power loss due to frictions and heat. With less rotations per minute producing the same power, less fuel is consumed leading to greater fuel efficiency as well as a reduction in exhaust emissions.
  Clean Boost
  Through our wholly-owned subsidiary, White Sands, we market Clean BoostTM, a fuel oil additive that improves fuel and combustion efficiency by liberating more of the fuel’s chemical energy, in the flame zone of boilers, or during the power stroke of diesel engines. Soot formation is prevented and less fuel is wasted in the form of particulate emissions. Greenhouse gas and acid rain gases, soot (black smoke), carbon build-up and fouling, slagging and cold-end corrosion are all reduced, while engine and boiler performance improves. Turbochargers and exhaust gas boilers remain cleaner and require less maintenance and water washing.
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 Clean BoostTM reduces fuel consumption by 2 to 5% across a wide range of fossil fuels, from coal and heavy residual fuel oils to intermediate fuel oil blends, refined diesel fuels. It also lessens the emission of harmful gasses.
 
 Clean BoostTM is effective in industrial boilers and diesel engines of all sizes and is used in marine shipping, power generation, mining, construction, ground transportation and wherever high fuel prices or compliance with emissions or opacity regulations is a concern.
  Clean Boost when mixed with diesel fuel, reduces the exhaust gases from combustion to meet the most stringent requirements of both Texas and California. Clean Boost LETM was tested at a renowned test facility with both the TCEQ and EPA as observers. The test results were submitted to Texas and then to the EPA which subsequently certified that Clean Boost LETM met the goals of reducing diesel fuel emissions. The EPA Certification #201920002CB-LE and the TCEQ products #TXLED-A-00009 was issued in March of 2007.  In June 2008, the Company received an unconditional approval for the Clean Boost LE product from the TCEQ.
  These products are used in the automotive, oil and gas, shipping and mining sectors. We believe that both Clean BoostTM products help in the following ways in diesel applications in the automotive and other industries to:
  ●

Lower fuel consumption (i.e., better fuel efficiency)●

Reduce exhaust emissions●

Lower maintenance requirements●

Reduce soot (carbon particles) in lubricating oil●

Carbon deposits in the combustion chamber are reduced●

Provide easier starting in cold weather
  Synergyn
  Through our wholly-owned subsidiary, XenTx Lubricants, Inc. (formerly Dyson Properties), which was acquired effective January 1, 2007, we continue the sales and distribution of a 64 item product line known as Synergyn Racing, Synergyn Performance and Synergyn Lubricants. This product line was introduced over 20 years ago and has been improved as lubrication requirements have changed. With its focus on performance products, Synergyn sells many of its products to NASCAR, NHRA and similar racing organization participants.
  XenTx Lube also manufactures private label products for a number of customers on a long-term contractual basis. Although some customers have unique formulas which XenTx Lube manufactures to their specifications, most customers utilize Synergyn’s formulas and package and rebrand these products for their customers’ use.
  Lumea, Inc.
  Through our wholly owned subsidiary Lumea Staffing, Inc., that was formed for purposes of implementing a roll-up strategy in the industrial (green) staffing space. Lumea currently has 16 offices in 7 states and manages approximately 1,500 temporary employees. The company currently has four subsidiaries: Lumea Staffing, Inc., Lumea Staffing of California, Inc., Lumea Staffing of Illinois, Inc. and Lumea IT, Inc. The services available through Lumea Staffing include:
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 ●

Full service staffing with volume discounted rates●

Drug testing though our drug division, DOT Certified, Hair testing, DNA testing, Complete chain custody compliance, Certified results, multiple panel configurations available●

Human Resources services●

Full range of Risk Management services that include Site Safety Evaluations, Early Intervention Programs, Safety Training, OSHA Compliance, Workers Compensation Premium Review, Case Management, Claims Review, Preferred Provider Networks, Back to Work Programs and Accident Investigation●

A full set of financial services products that improve recruiting and employee retentions●

Flu shots and CPR training for our Illinois clients●

IT management and technology services
  Other Products
  We have commenced shipping small quantities of XenTx spray lubricant, which is used as a general multi-purpose lubricant, and a transmission fluid that is a variation of the XenTx Extreme Engine Treatment and is primarily used for automatic transmissions. We may from time to time introduce additional products.
  Sales and Marketing
  Our objective is to market, sell and distribute our products in the most efficient, cost effective manner possible with our distribution channel strategy providing the widest range of customer coverage possible. We believe sales to automotive retailers through independent sales representatives affords us the best overall chance to gain and hold customers and allows us to control and maximize the product value chain benefits for us and the end-user.
  We sell our products through retailers, auto parts suppliers, internet sales at our web sites: www.xentx.com, www.synergynracing.com and direct sales through sales representatives to commercial customers. We sell our retail and commercial product through our sales force of three and through independent sales representatives. Each sales representative tends to service one to a few retail outlets with which they have long term, strong relationships. Our compensation arrangement with these representatives is commission only.
  Our products are currently sold in retail outlets in the United States and Canada. During the year ended March 31, 2010, no retailers accounted for more than 10% of our sales volume.  These outlets include a variety of small independent retailers.
  During the last three years, we have devoted substantial efforts to developing our sales force and retail distribution channels not only as an avenue to our original product, XenTx Extreme Engine Treatment, but for other products some of which are just now beginning to enter the marketplace.
  We participate with retailers in advertising campaigns, marketing promotions and other direct and indirect marketing techniques to promote and sell the products. We expense the cost of these advertising efforts as incurred.
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 We also market our products directly to companies. These efforts include the sharing of laboratory and field trial test data, sponsorship of individual customer field trials, technical and non-technical communication through industry trade media with messages emphasizing fuel performance enhancement through technical innovation, fuel efficiency, maintenance cost savings, improved air quality and “no harm” to engine or environment product attributes.
  We sell our complete line of staffing services utilizing our in-house national sales team. Each potential customer’s needs are thoroughly evaluated and our sales person creates a customized proposal. We have been successful in that the majority of our customers establish long term relationships with us. Customers that have seasonal needs return year after year for us to fulfill their labor needs. In addition, our staffing company currently provides services to approximately 140 commercial/industrial customers and these are the same customers that we target to sell our high technology, fuel efficiency, emission reducing products. As a result we have completed our initial sales cross training and now have a total of 5 sales people on our national sales team.
  Intellectual Property
  The formula and composition of XenTx is proprietary to us and is safeguarded from disclosure through secrecy agreements with various parties. At least one of the components of the formula is covered by a patent that is owned by Dover Chemical Corporation (“Dover”). In addition, we have filed provisional patents on both diesel fuel additives as the first step in patenting both formulas.
  We have obtained trademark registration of our marks XenTx and Clean Boost. Generally, these trademarks do not expire if we continue to use the trademarks and file the required periodic forms with the United States Patent and Trademark Office. With the acquisition of XenTx Lube we acquired both the trademark for Synergyn and all of the related formulas. None of the Synergyn formulas are patented.
  Production and Manufacturing
  With the acquisition of XenTx Lube we acquired our own manufacturing facilities. With this acquisition, the Company now has the ability to manufacture, package and distribute its products. The plant consists of approximately 54,000 sq. ft. of office, manufacturing and product storage located on approximately 5.03 acres in Durant, Oklahoma. The majority of the manufacturing process is blending various raw materials into a finished product based upon a specific formula and a customer purchase order.
  The Company now manufactures and packages its own products, therefore we assume substantially all of the risks associated with environmental, hazardous materials, and transportation of the products from our plant through delivery to the retailers.
  We carry a product liability insurance policy for the losses customers might suffer as a result of proper use of our products. To date there have been no claims against this policy.
  Research and Development
  We continuously research new products and possible applications of our existing product and have a R&D consultant who devotes substantially all his time working on our projects.
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 Testing
  We utilize two primary methods of testing: laboratory bench tests and field trials. We utilize both testing methods to further develop the body of test data necessary to support marketing and sales efforts. As we have matured, we have become aware of the importance of developing and managing specific testing protocols for field-based testing and adhering to already developed, industry recognized testing standards when engaged in laboratory bench tests. Numerous variables exist in any testing protocol, and if not carefully managed, one change in one variable could skew the test results. To address this challenge, a standardized testing and trial evaluation protocol has been developed. The use of this protocol allows us to:
  ●

understand the size of the opportunity;●

help prioritize available resources;●

ensure approved testing is structured and conducted in a controlled way; and●

ensure we will have full access to all testing results conducted by third parties.
  In addition to extensive field-based customer trials completed or under way, we have funded extensive laboratory bench testing at a well-known independent testing laboratory, Southwest Research Institute in San Antonio, Texas. Test results have confirmed the effectiveness of Clean Boost. In particular, Clean Boost achieved an average percent reduction in fuel consumption of approximately 3%. It also showed improved combustion efficiency, reduced ash formation and the virtual elimination of unburned carbon in the exhaust system and bottom ash.
  The test was conducted using two identical tractors that hauled 48-foot flat beds with concrete ballast. Fuel consumption for each vehicle was measured during a baseline segment with commercially available #2 diesel fuel. Each of the test trucks vehicles accumulated 1,500 miles for conditioning prior to conducting of the test segment. Next, Clean Boost was added to the diesel fuel of the vehicles. This procedure resulted in measurable percentage differences in fuel consumption for each truck using fuel with the Clean Boost additive versus fuel without the additive as follows:
  % Improvement in Fuel EconomyDiesel Fuel

Test Truck A

Test Truck B

Average of two trucksTest Segment

Commercially available #2 diesel with Clean Boost

3.63%

2.49%

3.06%
  A second test was done by Southwest Research Institute regarding our low emission diesel fuel additive, Clean Boost-LE TM, with both Texas and EPA observers. The test required approximately 15 days of running on a certified diesel engine in a calibrated test cell. The results were then documented and presented to the Texas Low Emission Diesel Board which after review, submitted them to the EPA for their analysis. On March 26, 2007, the EPA certified that our product, Clean Boost LE TM, met the stringent emissions reduction requirements and the Company received its certification, #201920002CB-LE. In May 2008, the TCEQ reevaluated and implemented new standards and determined that our CB-LE met all of the requirements without restrictions or retesting and issued its unconditional approval.
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 Fuel Efficient/Emission Reducing Technologies
  Our business is a part of the wider industry that seeks to improve overall energy efficiency with a specific concentration on petroleum based energy sources. The industry is composed of a few relatively large companies and a large number of smaller, niche segment participants.
  Industry participants’ products center around improved engine cleanliness and efficiency (for example, detergency characteristics applicable to fuel injector nozzles), improved fuel flow (for example, mitigation of fuel problems caused by low ambient temperature) and fuel system protection (for example, improved lubricity). These are common focus areas for the full range of gasoline and distillate fuels. Additives designed to address specific problem areas in specific fuel applications (for example, Cetane improver in diesel fuel) and static electricity dissipation in turbine engines are also significant.
  There are many existing technologies that claim to have solved engine emissions problems from alternative fueled vehicles (electric cars, fuel cell vehicles, etc.) to engine magnets. Despite the vast amount of research that has been performed with the intention of solving emissions problems, we believe no single technology has yet to gain widespread acceptance from both the public (regulatory) and private sectors. The United States government and the governments of other countries have tried using economic incentives and tax breaks to promote the development of a variety of emissions reduction technologies. However, the base cost of many of these promotions, coupled with issues such as lack of appropriate infrastructure (for example, compressed natural gas storage and delivery systems) and technical limitations (for example, keeping alternative fuels emulsified, significant loss of power and fuel economy with current alternative fuels), currently makes market acceptance of many technologies and economic feasibility unlikely over the long term.
  Our direct competitors include major oil and chemical companies, many of which have financial, technical and marketing resources significantly greater than ours. It is possible that developments by others will render our products obsolete or noncompetitive, that we will not be able to keep pace with new developments and that our products will not be able to supplant established products.
  Some of our main competitors include the following:
  Z-Max :  a division of Speedway Motorsports, Inc. Z-Max is a widely recognized brand product has a retail shelf price of between $29.99 and $39.99. Speedway is a financially strong entity that markets Z-Max in a distinct package. In addition, Z-Max has significant signage at racetracks owned by Speedway.
  DuraLube : although the company is currently in bankruptcy, there has been talk that an investor group may revive the company and its products. DuraLube is a recognized brand that holds shelf placement in major stores, including Wal-Mart.
  Slick 50 :    is currently a Shell Lubricant Company product. The brand is owned by Shell Oil, a well capitalized company that has the ability to underwrite major advertising campaigns. Slick 50 is the leader in our product market that has significant shelf placement with all major retailers except Target.
  As energy costs increase, and businesses are looking for ways to make energy products more efficient, competition within this sector itself is growing, so we will encounter competition from existing firms that offer competitive solutions in this area. These competitive companies could develop products that are superior to, or have greater market acceptance, than the products being developed and marketed by our company. We will have to compete against other companies with greater market recognition and greater financial, marketing and other resources.
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 Staffing
  The light industrial staffing market is highly competitive with limited barriers to entry. We compete with several multi-national full-service companies, specialized temporary staffing companies, as well as local companies. The majority of temporary staffing companies serving the light industrial staffing market have local operations with fewer than five branches. In most geographic areas, no single company has a dominant share of the market. One or more of these competitors may decide at any time to enter or expand their existing activities in the temporary staffing market and provide new and increased competition to us. While entry to the market has limited barriers, lack of working capital frequently limits the growth of smaller competitors.
  We believe that the primary competitive factors in obtaining and retaining customers are:
  ●

The customer bill rates for temporary workers;●

The temporary employee pay rates;●

Attracting and retaining quality temporary workers;●

Deploying temporary employees on time and for the required duration; and●

The number and location of branches convenient to temporary employees and customer work sites.
  Competitive forces have historically limited our ability to raise our prices to immediately and fully offset increased costs of doing business, including increased labor costs, costs for workers’ compensation and state unemployment insurance. As a result of these forces, we have in the past faced pressure on our operating margins.
  Government Regulations and Supervision
  Government regulations across the globe regarding fuels are continually changing. Most regulation focuses on reducing fuel emissions. However, there is also growing concern about dependence on oil-based fuels. Fuels regulation exists at various levels of development and enforcement around the globe. In general, regulations to reduce harmful emissions and to reduce dependence on oil for fuel needs will only become more stringent. We believe this will be an advantage to us as our products’ benefits reduce fuel consumption and can peacefully co-exist with alternative fuel blends. As fuels regulatory compliance becomes more burdensome to fuel suppliers and users, we anticipate that demand for the benefits our products deliver will increase.
  Since we now manufacture, store, and ship all of our products, we are required to be in compliance regarding all applicable environmental rules and regulations that regulate these types of activities. In addition, only our Clean Boost product requires governmental license as this substance is used in interstate trucking. In order for Clean Boost to be used in the United States, registration with the Environmental Protection Agency, or EPA, is required. In Fiscal Year 2007, we received EPA registration for one of our products and an EPA certification for the other product both of which are used in base fuels and fuel blends. We are also subject to similar international laws and regulations in the countries in which we operate, such as Canada and Mexico.
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 Employees
  Our staff works for us on a consultant basis. Currently we have 5 such consultants, two of which are executives, one of which works in sales and two of which work in various administrative functions. At XenTx Lubricants there are 9 employees located in Durant, Oklahoma, which are divided into 2 management personnel, 3 administrators and 4 production personnel. These employees are paid on a weekly basis. The Lumea, Inc. group of companies involved in the industrial staffing business has approximately 44 direct and 1,456 temporary staff employees that work for the Company. None of our employees are represented by any labor union. Some of the temporary staff are covered by labor unions based on the relationship of our customers to the unions are their facilities.
 
 ITEM 1A.
RISK FACTORS
  We are subject to a number of risks that could have a significant impact on the Company, its shareholders and lenders. Some of these are detailed below.
 
 Change in Marketing and Sales Approach
  We may experience a reduction in sales and marketing activity in our fuel efficiency emissions reducing technologies due to the Company’s significant change in the performance of these functions. In the year ended 2008, the Company has reduced its in house sales staff and is transitioning to an outside sales representative and an independent distributor strategy. We continue to try to implement the representative and distributor program and have been constrained by the lack of marketing funds. There can be no assurance that this strategy will not damage customer relationships as well as have a negative impact on revenues.
  The loss of or a substantial reduction in, or change in the size or timing of, orders from distributors could harm our business.
  The Company’s sales strategy is to establish long term contracts with independent sales representatives and fuel and lubrications distributors. Our goal is to convince the sales rep/distributor to invest a substantial amount of their resources into selling the Company’s products to both current and future customers. Although we believe we have established good relationships with these sales organizations, there can be no assurances that this sales strategy will be successful and that we can maintain a long term relationship with these companies.
  Going-Concern
  These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The general business strategy of the Company is to develop products, operate its sales force and to acquire additional businesses.   The Company has negative working capital, has incurred operating losses and requires additional capital to fund development activities, meet its obligations and maintain its operations. These conditions raise doubt about the Company’s ability to continue as a going concern.  During the year ended March 31, 2010 the Company received $120,000 for the issuance of 4,380,000 shares of common stock. The Company is in negotiations to obtain additional necessary capital to complete its regulatory approvals, expand production and sales and generally meet its business objectives. The Company forecasts that the equity and additional borrowing capacity that it is working to obtain will provide sufficient funds to complete its primary development activities and achieve profitable operations although the Company can provide no assurance that additional equity or additional borrowing capacity will be obtained.  Accordingly, these financial statements do not include any adjustments that might result from this uncertainty.
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 Workmen’s Compensation Risk
  The Company carries workmen’s compensation insurance on all of its employees. Under that agreement, the Company has retained a maximum liability on each claim, should the Company experience a significant increase in claims and severity the Company could experience significantly greater claim obligations. Further, the Company is currently honoring workmen’s compensation claims for employees that were not previously covered by workmen’s compensation insurance. Should the severity of these claims increase, the Company could experience significantly greater claim obligations. Meeting these increased obligations could adversely affect the Company’s liquidity and operating results.
  Delinquent Payroll Taxes
  The staffing companies are delinquent in the payment of employment taxes and are attempting to negotiate a payment plan with the Internal Revenue Service and state and local municipalities. Should these efforts not be successful, the staffing companies could be subject to levy, lien or seizure, any of which would have the effect of terminating that business. Further, should the Company underestimate the penalties and interest owed for delinquent employment tax payments, this could adversely affect the Company’s operating results in future periods.
  Health Insurance Coverage
  The staffing companies will be subject to the new Federal healthcare requirements that phase in over the next few years. This will force the companies to raise their fees to customers, secure health insurance for employees, charge the employees a portion of the cost, and manage and report the results in conformity with the law.  If we are not able to recoup the costs, provide reasonable coverage, or in lieu thereof pay the respective fines we may have significant losses or be forced to terminate that line of business.
  We do not have long term commitments from our suppliers and manufacturers.
  We may experience shortages of supplies and inventory because we do not have long-term agreements with our suppliers or manufacturers. The success of our Company is dependent on our ability to provide our customers with our products. Although we manufacture most of our products, we purchase partially manufactured products from some manufacturers and we are dependent on our suppliers for component parts which are necessary for our manufacturing operations. In addition, certain of our present and future products and product components are (or will be) manufactured by third party manufacturers. Since we have no long-term contracts or other contractual assurances with these manufacturers for continued supply, pricing or access to component parts, no assurance can be given that such manufacturers will continue to supply us with adequate quantities of products at acceptable levels of quality and price. While we believe that we have good relationships with our suppliers and our manufacturers, if we are unable to extend or secure manufacturing services or to obtain component parts or finished products from one or more manufacturers on a timely basis and on acceptable terms, our results of operations could be adversely affected.
  We face intense competition, and many of our competitors have substantially greater resources than we do.
  We operate in a highly competitive environment. In addition, the competition in the market for fuel and engine enhancement additive products may intensify in the future as demands for greater efficiencies in vehicle mileage and pollutant reductions are demanded and legislated. There are numerous well-established companies and smaller entrepreneurial companies based in the United States with significant resources who are developing and marketing products and services that will compete with our products. In addition, many of our current and potential competitors have greater financial, operational and marketing resources. These resources may make it difficult for us to compete with them in the development and marketing of our products, which could harm our business.
 14
 Table of Contents
 Index to Financial Statements
 Our success will depend on our ability to update our technology to remain competitive.
  The engine and fuel additive industry is subject to technological change. As technological changes occur in the marketplace, we may have to modify our products in order to become or remain competitive. While we are continuing our research and development in new products in efforts to strengthen our competitive advantage, no assurances can be given that we will successfully implement technological improvements to our products on a timely basis, or at all. If we fail to anticipate or respond in a cost-effective and timely manner to government requirements, market trends or customer demands, or if there are any significant delays in product development or introduction, our revenues and profit margins may decline which could adversely affect our cash flows, liquidity and operating results.
 
 We depend on market acceptance and recognition of the products of our customers. If our products do not gain market acceptance, our ability to compete will be adversely affected.
  The fuel additive and engine additive industry is noted for manufacturing products that are ineffective and have no economic value. Although the Company has developed unique products that have been tested by independent testing and research facilities to verify the Company’s claims, there can be no assurance that these tests and related marketing materials will gain acceptance in the marketplace. If we cannot convince new customers to purchase our products, our revenues will be negatively affected.
  Failure to meet customers’ expectations or deliver expected performance of our products could result in losses and negative publicity, which will harm our business.
  If our products fail to perform in the manner expected by our customers, then our revenues may be delayed or lost due to adverse customer reaction, negative publicity about us and our products, which could adversely affect our ability to attract or retain customers. Furthermore, disappointed customers may initiate claims for substantial damages against us, regardless of our responsibility for such failure.
  We may have difficulty managing our growth.
  We have been experiencing significant growth in the scope of our operations and the number of our employees. This growth has placed significant demands on our management as well as our financial and operational resources. In order to achieve our business objectives, we anticipate that we will need to continue to grow. If this growth occurs, it will continue to place additional significant demands on our management and our financial and operational resources, and will require that we continue to develop and improve our operational, financial and other internal controls. Further, to date our business has been primarily in the United State, Canada and Mexico and were we to launch sales and distribution in other countries outside North America, we would further increase the challenges involved in implementing appropriate operational and financial systems, expanding manufacturing capacity and scaling up production, expanding our sales and marketing infrastructure and capabilities and providing adequate training and supervision to maintain high quality standards. The main challenge associated with our growth has been, and we believe will continue to be, product recognition, and effective marketing and advertising campaigns. Our inability to scale our business appropriately or otherwise adapt to growth would cause our business, financial condition and results of operations to suffer.
 15
 Table of Contents
 Index to Financial Statements
 If we are unable to protect our intellectual property rights or our intellectual property rights are inadequate, our competitive position could be harmed or we could be required to incur expenses to enforce our rights.
  Our future success will depend, in part, on our ability to obtain and maintain patent protection for our products and technology, to preserve our trade secrets and to operate without infringing the intellectual property of others. In part, we rely on patents to establish and maintain proprietary rights in our technology and products. While we hold licenses to a number of issued patents and have other patent applications pending on our products and technology, we cannot assure you that any additional patents will be issued, that the scope of any patent protection will be effective in helping us address our competition or that any of our patents will be held valid if subsequently challenged. Other companies also may independently develop similar products, duplicate our products or design products that circumvent our patents.
  In addition, if our intellectual property rights are inadequate, we may be exposed to third-party infringement claims against us. Although we have not been a party to any infringement claims and are currently not aware of any anticipated infringement claim, we cannot predict whether third parties will assert claims of infringement against us, or whether any future claims will prevent us from operating our business as planned. If we are forced to defend against third-party infringement claims, whether they are with or without merit or are determined in our favor, we could face expensive and time-consuming litigation. If an infringement claim is determined against us, we may be required to pay monetary damages or ongoing royalties. In addition, if a third party successfully asserts an infringement claim against us and we are unable to develop suitable non-infringing alternatives or license the infringed or similar intellectual property on reasonable terms on a timely basis, then our business could suffer.
  If we are required to further write down goodwill or identifiable intangible assets, the related charge could materially impact our reported net income or loss for the period in which it occurs.
  We have recorded goodwill and intangibles in conjunction with the acquisition of the staffing business. We perform annual reviews of each of these items for impairment. We did not record any such charges in 2009, the year of acquisition. As part of the analysis of goodwill impairment, ASC 350 requires the Company’s management to estimate the fair value of the reporting units on at least an annual basis. At March 31, 2010, we performed our annual goodwill and indefinite lived intangible assets impairment test and concluded that there was an impairment of goodwill in the amount of $4,355,151 and no other further impairment of goodwill or intangible assets. Therefore, we continue to have approximately $4,624,671 in goodwill on our balance sheet at March 31, 2010, as well as $3.2 million in identifiable intangible assets. In addition, at March 31, 2010, we determined that there were no other events or changes in circumstances that indicated that the carrying values of other identifiable intangible assets subject to amortization may not be recoverable. Although a future impairment of goodwill and identifiable intangible assets would not affect our cash flow, it would negatively impact our operating results.
  If we are unable to meet customer demand or comply with quality regulations, our sales will suffer.
  We own our own manufacturing, production and bottling plant in Durant, Oklahoma. We manufacture and blend many of our products at this facility. In order to achieve our business objectives, we will need to significantly expand our capabilities to produce the quantities necessary to meet demand. We may encounter difficulties in scaling-up production of our products, including problems involving production capacity and yields, quality control and assurance, component supply and shortages of qualified personnel. In addition, our manufacturing facilities are subject to periodic inspections by governmental regulatory agencies. Our success will depend in part upon our ability to manufacture our products in compliance with regulatory requirements. Our business will suffer if we do not succeed in manufacturing our products on a timely basis and with acceptable manufacturing costs while at the same time maintaining good quality control and complying with applicable regulatory requirements.
 16
 Table of Contents
 Index to Financial Statements
 Substantially all of our assets are secured under credit facilities with lenders and in the event of default under the credit facilities we may lose all of our assets.
  The Company has entered into four separate financing arrangements whereby these lenders have collateralized their loans with substantially all of our assets. The Company’s manufacturing operations are pledged as collateral for a loan. If the Company were to have a future default and lose the property by foreclosure it would be forced to move its operations and to find additional third party manufacturing, if possible, that would agree to produce our products at our current prices. Our business would suffer and our ability to raise any additional funds would be negatively impacted, both of which would impact our ability to continue in business.
  We may not be able to secure additional financing to meet our future capital needs.
  We anticipate needing significant capital to manufacture product, carry adequate inventory levels and continue or further develop our existing products and introduce new products, increase awareness of our brand names and expand our operating and management infrastructure as we grow sales. We may use capital more rapidly than currently anticipated. Additionally, we may incur higher operating expenses and generate lower revenue than currently expected, and we may be required to depend on external financing to satisfy our operating and capital needs. We may be unable to secure additional debt or equity financing on terms acceptable to us, or at all, at the time when we need such funding. If we do raise funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders would be reduced, and the securities that we issue may have rights, preferences or privileges senior to those of the holders of our common stock or may be issued at a discount to the market price of our common stock which would result in dilution to our existing stockholders. If we raise additional funds by issuing debt, we may be subject to debt covenants, such as the debt covenants under our secured credit facility, which could place limitations on our operations including our ability to declare and pay dividends. Our inability to raise additional funds on a timely basis would make it difficult for us to achieve our business objectives and would have a negative impact on our business, financial condition and results of operations.
  If we cannot build and maintain strong brand loyalty our business may suffer.
  We believe that the importance of brand recognition will increase as more companies produce competing products. Development and awareness of our brands will depend largely on our ability to advertise and market successfully. If we are unsuccessful, our brands may not be able to gain widespread acceptance among consumers. Our failure to develop our brands sufficiently would have a material adverse effect on our business, results of operations and financial condition.
  Economic conditions may cause reduced demand for staffing services.
  The current recession has negatively affected our customers and our business, and could continue to negatively affect our customers and materially adversely affect our results of operations and liquidity.
  The current recession is having a significant negative impact on businesses around the world. The full impact of this recession on our customers, especially our customers engaged in construction, cannot be predicted and may be quite severe. These and other economic factors, such as consumer demand, unemployment, inflation levels and the availability of credit could have a material adverse effect on demand for our services and on our financial condition and operating results. We sell our services to a large number of small and mid-sized businesses and these businesses have been and are more likely to be impacted by unfavorable general economic and market conditions than larger and better capitalized companies. If our customers cannot access credit to support increased demand for their product or if demand for their products declines, they will have less need for our services.
 17
 Table of Contents
 Index to Financial Statements
 Competition for customers in the staffing markets we serve is intense, and if we are not able to effectively compete, our financial results could be harmed and the price of our securities could decline.
  The temporary services industry is highly competitive, with limited barriers to entry. Several very large and mid-sized full-service and specialized temporary labor companies, as well as small local operations, compete with us in the staffing industry. Competition in the markets we serve is intense and these competitive forces limit our ability to raise prices to our customers. For example, competitive forces have historically limited our ability to raise our prices to immediately and fully offset increased costs of doing business, including increased labor costs, costs for workers’ compensation and state unemployment insurance. As a result of these forces, we have in the past faced pressure on our operating margins. Pressure on our margins remains intense, and we cannot assure you that it will not continue. If we are not able to effectively compete in the staffing markets we serve, our operating margins and other financial results will be harmed and the price of our securities could decline.
  If we are not able to obtain or maintain insurance on commercially reasonable terms, our financial condition or results of operations could suffer.
  We maintain various types of insurance coverage to help offset the costs associated with certain risks to which we are exposed. We have previously experienced, and could again experience, changes in the insurance markets that result in significantly increased insurance costs and higher deductibles. For example, we are required to pay workers’ compensation benefits for our temporary and permanent employees. While we have secured coverage for occurrences during the period from March 2009 to March 2010, our insurance policies must be renewed annually, and we cannot guarantee that we will be able to successfully renew such policies for any period after the date of this filing. In the event we are not able to obtain workers’ compensation insurance, or any of our other insurance coverages, on commercially reasonable terms, our ability to operate our business would be significantly impacted and our financial condition and results of operations could suffer. If our financial results deteriorate, our insurance carrier may accelerate our premium payments or require all premiums to be paid in one initial payment. Such a change in our insurance payment terms could impact our available cash, and our financial condition or operations could suffer.
  Our reserves for workers’ compensation claims, other liabilities, and our allowance for doubtful accounts may be inadequate, and we may incur additional charges if the actual amounts exceed the estimated amounts.
  We incur and process workers’ compensation claims for those claims for small or routine injuries and our risk management and medical staff process these claims. For more complex or extensive injuries the claims are immediately turned over to the insurance carrier.  We will evaluate losses and coverage regularly throughout the year and make adjustments accordingly.  If actual losses under our workers’ compensation policy exceed anticipated losses the Company may be subject to increased premiums or cancelation of the policy.  We have established an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.  Although we continually review the financial strength and credit worthiness of our customers and make necessary adjustments when indicated, if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, we may incur additional losses.
  Our operations expose us to the risk of litigation which could lead to significant potential liability and costs that could harm our business, financial condition or results of operations.
  We are in the business of employing people and placing them in the workplaces of other businesses. As a result, we are subject to a large number of federal and state laws and regulations relating to employment. This creates a risk of potential claims that we have violated laws related to discrimination and harassment, health and safety, wage and hour laws, criminal activity, personal injury and other claims. We are also subject to other types of claims in the ordinary course of our business. Some or all of these claims may give rise to litigation, which could be time-consuming for our management team, costly and harmful to our business.
 18
 Table of Contents
 Index to Financial Statements
 We are continually subject to the risk of new regulation, which could harm our business.
  Each year a number of bills are introduced to Federal, State, and local governments, any one of which, if enacted, could impose conditions which could harm our business. This proposed legislation has included provisions such as a requirement that temporary employees receive equal pay and benefits as permanent employees, requirements regarding employee health care, and a requirement that our customers provide workers’ compensation insurance for our temporary employees. We actively oppose proposed legislation adverse to our business and inform policy makers of the social and economic benefits of our business. However, we cannot guarantee that any of this legislation will not be enacted, in which event demand for our service may suffer.
  The cost of compliance with government laws and regulations is significant and could harm our operating results.
  We incur significant costs to comply with complex federal, state, and local laws and regulations relating to employment, including occupational safety and health provisions, wage and hour requirements (including minimum wages), workers’ compensation unemployment insurance, and immigration. In addition, from time to time we are subject to audit by various state and governmental authorities to determine our compliance with a variety of these laws and regulations. We may, from time to time, incur fines and other losses or negative publicity with respect to any such allegations. If we incur additional costs to comply with these laws and regulations or as a result of fines or other losses and we are not able to increase the rates we charge our customers to fully cover any such increase, our margins and operating results may be harmed.
  Our credit facility requires that we meet certain levels of financial performance. In the event we fail either to meet these requirements or have them waived, we may be subject to penalties and we could be forced to seek additional financing.
  We have a revolving credit agreement with certain unaffiliated financial institutions (the “Credit Facility”) that expires in March 2010. The Credit Facility requires that we comply with certain financial covenants. Among other things, these covenants require us to maintain certain leverage and coverage ratios. Deterioration of our financial results would make it harder for us to comply with these financial covenants. We cannot be assured that our lenders would consent to any modifications on commercially reasonable terms in the future. In the event that we do not comply with the covenants and the lenders do not waive such non-compliance, then we will be in default of the Credit Facility, which could subject us to penalty rates of interest and accelerate the maturity of the outstanding balances. Accordingly, in the event of a default under the Credit Facility, we could be required to seek additional sources of capital to satisfy our liquidity needs. These additional sources of financing may not be available on commercially reasonable terms, or at all.
  We have significant working capital requirements.
  We require significant working capital in order to operate our business. We may experience periods of negative cash flow from operations and investment activities, especially during seasonal peaks in revenue experienced in the second and third quarter of the year. We invest significant cash into the opening and operations of new branches until they begin to generate revenue sufficient to cover their operating costs. We also pay our temporary employees before customers pay us for the services provided. As a result, we must maintain cash reserves to pay our temporary employees prior to receiving payment from our customers. Our collateral requirements may increase in future periods, which would decrease amounts available for working capital purposes. If our available cash balances and borrowing base under our existing credit facility do not grow commensurate with the growth in our working capital requirements, or if our banking partners experience cash shortages or are unwilling to provide us with necessary cash, we could be required to explore alternative sources of financing to satisfy our liquidity needs.
 19
 Table of Contents
 Index to Financial Statements
 Our management information and computer processing systems are critical to the operations of our business and any failure, interruption in service, or security failure could harm our ability to effectively operate our business.
  The efficient operation of our business is dependent on our management information systems. We rely heavily on our management information systems to manage our order entry, order fulfillment, pricing, and point-of-sale processes. The failure of our management information systems to perform as we anticipate could disrupt our business and could result in decreased revenue, increased overhead costs and could require that we commit significant additional capital and management resources to resolve the issue, causing our business and results of operations to suffer materially. Failure to protect the integrity and security of our customers’ and employees’ information could expose us to litigation and materially damage our standing with our customers.
  Our business would suffer if we could not attract enough temporary employees or skilled trade workers.
  We compete with other temporary personnel companies to meet our customer needs and we must continually attract reliable temporary employees to fill positions. In certain geographic areas of the United States the predecessor has experienced short-term worker shortages and we may continue to experience such shortages in the future. If we are unable to find temporary employees or skilled trade workers to fulfill the needs of our customers over an extended period of time, we could lose customers and our business could suffer.
  Failure in our pursuit or execution of new business ventures, strategic alliances and acquisitions could have a material adverse impact on our business.
  Our long-term growth strategy includes expansion via new business ventures and acquisitions. While we employ several different valuation methodologies to assess a potential growth opportunity, we can give no assurance that new business ventures and strategic acquisitions will positively affect our financial performance. Acquisitions may result in the diversion of our capital and our management’s attention from other business issues and opportunities. Unsuccessful acquisition efforts may result in significant additional expenses that would not otherwise be incurred. We may not be able to assimilate or integrate successfully companies that we acquire, including their personnel, financial systems, distribution, operations and general operating procedures. If we fail to assimilate or integrate acquired companies successfully, our business could suffer materially. In addition, we may not realize the revenues and cost savings that we expect to achieve or that would justify the acquisition investment, and we may incur costs in excess of what we anticipate. We may also encounter challenges in achieving appropriate internal control over financial reporting in connection with the integration of an acquired company. In addition, the integration of any acquired company, and its financial results, into ours may have a material adverse effect on our operating results.
  We are highly dependent on the cash flows and net earnings we generate during our second and third fiscal quarters.
  A majority of our cash flow from operating activities is generated during the 2 nd and 3 rd quarters which include the summer months. Unexpected events or developments such as natural disasters, manmade disasters and adverse economic conditions in our second and third quarter could have a material adverse effect on our operating cash flows.
 20
 Table of Contents
 Index to Financial Statements
 Risks Relating To Our Common Stock
  There is a limited public trading market for our common stock.
  Our Common Stock presently trades on the Over the Counter Bulletin Board under the symbol “GNPG:OB.” We cannot assure you, however, that such market will continue or that you will be able to liquidate your shares acquired at the price you paid or otherwise. We also cannot assure you that any other market will be established in the future. The price of our common stock may be highly volatile and your liquidity may be adversely affected in the future.
  We have a substantial number of shares authorized but not yet issued.
  Our Articles of Incorporation authorize the issuance of up to 250,000,000 shares of common stock and 1,000,000 preferred capital shares. Our Board of Directors has the authority to issue additional shares of common stock and to issue options and warrants to purchase shares of our common stock without stockholder approval. Future issuance of common stock and preferred stock could be at values substantially below current market prices and therefore could represent further substantial dilution to our stockholders. In addition, the Board could issue large blocks of voting stock to fend off unwanted tender offers or hostile takeovers without further shareholder approval.
 
 We have historically not paid dividends and do not intend to pay dividends.
  We have historically not paid dividends to our stockholders and management does not anticipate paying any cash dividends on our common stock to our stockholders for the foreseeable future. The Company intends to retain future earnings, if any, for use in the operation and expansion of our business.
 
 ITEM 1B.
UNRESOLVED STAFF COMMENTS
 
 Smaller reporting companies are not required to provide the information required by this item.
  ITEM 2.
DESCRIPTION OF PROPERTY
  The Company owns its operating plant and facilities in Durant, Oklahoma. This property consists of 5.03 acres of land with three buildings totaling 53,459 square feet of industrial and office space. The property is subject to a first mortgage loan of approximately $790,683. This facility is the Company’s blending, bottling and distribution center for its XenTx and Synergyn products. The staffing company also leases office space of 3,100 square feet, also located in Scottsdale, Arizona at an annual rate of $87,670.  In addition, the company also leases 16 small offices throughout the U.S. at an annual cost of approximately $156,886.
 21
 Table of Contents
 Index to Financial Statements
 ITEM 3.
LEGAL PROCEEDINGS
 None.
 ITEM 4.
REMOVED AND RESERVED
  Not applicable.
 22
 Table of Contents
 Index to Financial Statements
 PART II
 
 ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  Market Information
  Our common stock has been traded on the Over the Counter Bulletin Board under the symbol EMHD since February 9, 2007. Since April 8, 2006, our stock has been trading on the Pink Sheets. On July 12, 2010, our stock symbol was changed to GNPG.
  The following is the range of high and low bid prices for our common stock for the periods indicated:
 
 Bid PricesHigh

LowQuarter ended June 30, 2008

$
0.45


$
0.16Quarter ended September 30, 2008

$
0.25


$
0.06Quarter ended December 31, 2008

$
0.09


$
0.02Quarter ended March 31, 2009

$
0.09


$
0.02Quarter ended June 30, 2009

$
0.10


$
0.03Quarter ended September 30, 2009

$
0.16


$
0.04Quarter ended December 31, 2009

$
0.12


$
0.04Quarter ended March 31, 2010

$
0.08


$
0.02
  Bid quotations represent interdealer prices without adjustment for retail markup, markdown and/or commissions and may not necessarily represent actual transactions.
  Stockholders
  As of July 12, 2010, the number of stockholders of record was approximately 1,400.
 
 Dividends
  We have not paid any dividends on our common stock, and we do not anticipate paying any dividends in the foreseeable future. Our Board of Directors intends to follow a policy of retaining earnings, if any, to finance the growth of the Company. The declaration and payment of dividends in the future will be determined by our Board of Directors in light of conditions then existing, including the Company’s earnings, financial condition, capital requirements and other factors.
 23
 Table of Contents
 Index to Financial Statements
 Securities Authorized for Issuance under Equity Compensation Plans
  In March 2008, the Company issued 5,415,000 stock options to employees, directors and consultants. One third of which each become vested on October 1, 2008, April 1, 2009 and October 1, 2009 provided the participant’s continue service to the Company. The options are exercisable for three years from the grant date at a price of $0.20 per share. At March 31, 2010, 450,000 of the original options had been forfeited and no options have been exercised.
 
 Equity Compensation Plan Information
  Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a)(a)

(b)

(c)Equity compensation plans

approved by security holders

0

0

0Equity compensation plans not

approved by security holders

4,965,000

$0.20

0Total

4,965,000

$0.20

0
 ____________
 (1)
The options were issued pursuant to a Registration Statement on Form S-8 filed by the Company.
  Recent Sales of Unregistered Securities.
  None.
 
 ITEM 6.
SELECTED FINANCIAL DATA
  Smaller reporting companies are not required to provide the information required by this item.
 24
 Table of Contents
 Index to Financial Statements
 ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  In addition to historical information, this section contains “forward-looking” statements, including statements regarding the growth of product lines, optimism regarding the business, expanding sales and other statements. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of our products. In addition, actual results could vary materially based on changes or slower growth in the fuel additive products market or the staffing market; the potential inability to realize expected benefits from new products and products under development; domestic and international business and economic conditions; changes in the petroleum and staffing industries; unexpected difficulties in penetrating the commercial and industrial markets for our products; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufactured raw material and manufacturing capacity; future production variables impacting excess inventory and other risk factors listed in the section of this Annual Report entitled “Risk Factors” and from time to time in our Securities and Exchange Commission filings under “risk factors” and elsewhere.
  Each forward-looking statement should be read in context with, and with an understanding of, the various disclosures concerning our business made elsewhere in this Annual Report, as well as other public reports filed by us with the Securities and Exchange Commission. Readers should not place undue reliance on any forward-looking statement as a prediction of actual results of developments. Except as required by applicable law or regulation, we undertake no obligation to update or revise any forward-looking statement contained in this Annual Report. This section should be read in conjunction with our consolidated financial statements.
 
 RESULTS OF OPERATIONS
  The following table sets forth our results of operations for the years ended March 31, 2010 and 2009 as a percentage of net sales:
 
 2010

2009NET SALES


100.0
%

100.0
%COST OF SALES


87.6
%

76.7
%GROSS PROFIT


12.4
%

23.3
%OPERATING EXPENSESSelling, general and administrative


24.1
%

41.4
%Depreciation and amortization


1.9
%

3.4
%Allowance for bad debts


2.6
%

10.6
%Impairment of goodwill


7.6
%

-
%Research and development


0.0
%

0.0
%TOTAL OPERATING EXPENSES


36.1
%

55.4
%
 (Continued)
 25
 Table of Contents
 Index to Financial Statements
  2009

2008LOSS FROM OPERATIONS


(23.8)
%

(32.0)
%Other income (expense)


0.0
%

0.0
%Interest expense


(3.6)
%

2.6
%LOSS BEFORE INCOME TAXES


(27.3)
%

(29.4)
%Income tax benefit


0.0
%

0.0
%NET INCOME (LOSS)


(27.3)
%

(29.4)
%
  Year ended March 31, 2010 as compared to year ended March 31, 2009
  Net Sales: Net Sales increased from $9,170,794 in 2009 to $57,380,667 in 2010 or an increase of $48,209,873. This represents an increase of 526% over the prior year. This increase was due to a full year of revenue from the staffing business acquired on March 1, 2009 and a decline in the additive business sales. Also, the company reduced its emphasis on retail sales and concentrated on the commercial/industrial market, particularly with long haul trucking fleets and large earth moving equipment companies.
  Gross Margin: Gross Margin decreased to 12.4% from 23.3% or a decrease of 10.9%. This was due to the lower margins from the staffing companies.
  Selling, General and Administrative Expenses: The Company increased its SG&A from $3,798,290 to $13,820,537, or an increase of $10,022,247. This was due to the increase in revenue from the staffing companies and the management, administration and operating costs of that line of business. In addition our consulting costs and sales and promotional expenses also increased.
  Research and Development: The expense for research and development was increased from $0 to $13,743 or an increase of $13,743. This was due to minor testing of our products. All major development and testing has been delayed until the cash flow is sufficient to adequately complete new products and projects.
  IMPACT OF INFLATION
  Inflation has not had a material effect on our results of operations.  We expect the cost of petroleum base products to track the increase and decrease in the worldwide oil prices. We also expect that the cost of labor in our staffing business will allow for inflation as it occurs. Should inflation and associated costs become unmanageable we may suffer loss of business when our customers are unable to absorb the increased costs.
 SEASONALITY
  The seasons of the year have no material impact on the Company’s fuel efficiency/emission reducing products or services but it does have an impact on both revenues and margin of our staffing companies. Revenues are lowest in the first calendar quarter and largest in the third calendar quarter.
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 Table of Contents
 Index to Financial Statements
 FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
  We have experienced net losses and negative cash flows from operations and investing activities for the fiscal years 2010 and 2009. The aggregate net losses for the last two fiscal years aggregated $15,687,606 and $2,696,277, respectively, resulting in an increased loss in the current year of $12,991,329.  As a result, the Company’s independent registered public accounting firm has issued a going concern opinion on the Company’s consolidated financial statements for the year ended March 31, 2010.  Contributing factors to the 2010 results of operations was a full year of operations of the staffing business which resulted in a loss for the year of $10,745,049 compared to the partial year in 2009 which had a loss of $396,912. In the staffing loss were non-cash adjustments for an impairment write-down of goodwill in the amount of $4,355,151, depreciation and amortization of $710,197 and allowance for doubtful accounts of $724,524. The additive business also recognized $261,501 and $758,726 for depreciation and amortization and allowance for doubtful account, respectively. The Company sold stock for a total of $120,000 during the year and did not add any other equity of debt during the period. We were able to issue some stock for services, interest and acquisitions that allowed us to conserve some cash proceeds. Accounts payable and accrued liabilities increased during 2010 by approximately $9,958,279 which was used to fund operations during the year. The Company has negative working capital of $27,148,597 at year end.  The Company is working to renegotiate or replace certain debt and find new sources of equity and debt financing in the coming months.
 
 Substantially all of the Company’s assets are pledged as collateral for our debt obligations at March 31,2010.
 
 The Company was in default on $1,574,555 under the Purchase Note Payable, litigation has commencedand the parties are in negotiations to settle this obligation for a reduced amount payable over the nextseveral years. Subsequent to the end of the year, the Company has commenced litigation against thesellers of the staffing business to the Company in March, 2009. The litigation seeks to rescind thepurchase and other equitable relief and the Company has stopped making scheduled payments on thePurchase note 1 ($4,805,568) and Purchase note 2 ($2,025,367) and does not intend to make futurepayments on these notes. The Company has included the Purchase note 1 note in the due within one yearpursuant to generally accepted accounting principles (GAAP). The Company has received a garnishment from the ACE with respect to the payments on the Purchase note 1 seeking payment of the amounts due under the note for obligations of the seller.  The Company has resisted these claims and is pursuing its rights through the courts.  Substantially all of Purchase note 2represents potential payments to third party taxing authorities under the successor liability statutes ofvarious states and the Company may be forced to make these payments thereon to maintain its licenses inthose states. The litigation is seeking restitution of any such amounts paid under these obligations. Othernotes have been modified during the year changing the maturity date and restructuring the paymentstructure.
 At March 31, 2010, the Company does not have any significant commitments for capital expenditures.  The Company is discussing with potential customers the manufacturing and delivery logistics and depending on the results of such negotiations, the Company may be required to expand its manufacturing capabilities.  We have no special purpose entities or off balance sheet financing arrangements, commitments, or guarantees other than certain long-term operating lease arrangements for our corporate facilities and short-term purchase order commitments to our suppliers.
  At March 31, 2010, the Company’s aggregate of accounts payable, accrued liabilities and notes due within one year has increased to $26,800,121 from $12,676,920.  These obligations together with operation costs will have to be funded from operations and additional funding from debt and equity offerings.
  The Company’s cost of raw materials is highly dependent on the cost of petroleum products and synthetic materials.  To the extent that such prices fluctuate significantly the Company may be unable to adjust sales prices to reflect cost increased and secondarily price increases may negatively influence sales.
  OFF BALANCE SHEET ARRANGEMENTS
  Not applicable.
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 Index to Financial Statements
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Consolidation - The consolidated financial statements include the accounts of Green Planet Group, Inc. and its consolidated subsidiaries and wholly-owned limited liability company. The financial statements for the year ended March 31, 2009 only include the operations of Lumea, Inc. and its subsidiaries since March 1, 2009.  All significant intercompany transactions and profits have been eliminated.
 
 Use of Estimates - The preparation of financial statements in conformity with United States generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The more significant estimates relate to revenue recognition, contractual allowances and uncollectible accounts, intangible assets, accrued liabilities, derivative liabilities, income taxes, litigation and contingencies. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates.
  Cash Equivalents - The Company invests its excess cash in short-term investments with various banks and financial institutions. Short-term investments are cash equivalents, as they are part of the cash management activities of the company and are comprised of investments having maturities of three months or less when purchased.
  Allowance for Doubtful Accounts - The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. The allowance for doubtful accounts was $2,034,760 and $806,846 at March 31, 2010 and 2009, respectively.
  Inventories - Inventories are stated at the lower of cost or market value. Cost of inventories is determined by the first-in, first-out (FIFO) method. Obsolete or abandoned inventories are charged to operations in the period that it is determined that the items are no longer viable sales products.
  Property, Plant, and Equipment - Plant and equipment are carried at cost. Repair and maintenance costs are charged against operations while renewals and betterments are capitalized as additions to the related assets. The Company depreciates its plant and equipment and computers on a straight line basis. Estimated useful life of the plant is 31 years and the equipment ranges from 3 to 10 years.
 
 Intangible Assets - Intangible assets consist of patents, trademarks, government approvals and customer relationships (including client contracts). For financial statement purposes, identifiable intangible assets with a defined life are being amortized using the straight-line method over the estimated useful lives of seven years for the EPA license and 5 years for the customer relationships. Costs incurred by the Company in connection with patent, trademark applications and approvals from governmental agencies such as the Environmental Protection Agency, including legal fees, patent and trademark fees and specific testing costs, are expensed as incurred. Purchased intangible costs of completed developments are capitalized and amortized over an estimated economic life of the asset, generally seven years, commencing on the acquisition date. Costs subsequent to the acquisition date are expensed as incurred.
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 Index to Financial Statements
 Goodwill - Goodwill represents the excess of the purchase price over the fair value of the net assets acquired by Lumea. Goodwill and other intangible assets having an indefinite useful life are not amortized for financial statement purposes. The Company performs an annual impairment test each year and in the event that facts and circumstances indicate that goodwill and other identifiable intangible assets may be impaired, an interim impairment test would be required. The Company’s testing approach will utilize a discounted cash flow analysis to determine the fair value of its reporting units for comparison to their corresponding book values.  If the book value exceeds the estimated fair value for a reporting unit, a potential impairment is indicated. ASC 350-10 and ASC 360-10 prescribes the approach for determining the impairment amount, if any.
 
 Impairment of Long-Lived Assets - In accordance with ASC 360-10 (formerly the Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,”) the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the sum of the expected future cash flows of an asset is less than its carrying value, an impairment measurement is required. Impairment charges are recorded to the extent that an asset’s carrying value exceeds fair value. Accordingly, actual results could vary significantly from such estimates. During the year ended March 31, 2010 the Company recognized an impairment loss of $4,355,151 in conjunction with goodwill valuation for the period. There were no impairment charges during the year ended March 31, 2009.
 
 Fair Value Disclosures - The carrying values of cash, accounts receivable, deposits, prepaid expenses, accounts payable and accrued expenses generally approximate the respective fair values of these instruments due to their current nature.
  The fair values of debt instruments for disclosure purposes only are estimated based upon the present value of the estimated cash flows at interest rates applicable to similar instruments.
  The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features that are indexed to the Company’s common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within the control of the Company. In such instances, net-cash settlement is assumed for financial accounting and reporting, even when the terms of the underlying contracts do not provide for net-cash settlement. Such financial instruments are initially recorded at fair value and subsequently adjusted to fair value at the close of each reporting period.
 
 Derivative Financial Instruments - The Company accounts for derivative instruments and debt instruments in accordance with the interpretative guidance of ASC 815 which codified SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”), EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” APB No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants,” EITF 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” (“EITF 98-5”), and EITF 00-27, “Application of Issue No. 98-5 to Certain Convertible Instruments” (“EITF 00-27”), and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features. It is necessary for the Company to make certain assumptions and estimates to value derivatives and debt instruments.
 
 Revenue Recognition - Revenues are recognized at the time of shipment of products to customers, or at the time of transfer of title, if later, and when collection is reasonably assured. All amounts in a sales transaction billed to a customer related to shipping and handling are reported as revenues.  Staffing revenue is recognized at the completion of each billing cycle to the customer after completion of the work.  The billing cycle is generally weekly.
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 Index to Financial Statements
 Provisions for sales discounts and rebates to customers are recorded, based upon the terms of sales contracts, in the same period the related sales are recorded, as a deduction to the sale. Sales discounts and rebates are offered to certain customers to promote customer loyalty and encourage greater product sales.  As a general rule, the Company does not charge interest on its accounts receivables.
 
 Components of Cost of Sales - Cost of sales is comprised of raw material costs including freight and duty, inbound handling costs associated with the receipt of raw materials, contract manufacturing costs, third party bottling and packaging, maintenance and storage costs, plant and engineering overhead allocation, terminals and other warehousing costs, and handling costs. The components of cost of sales of the staffing business are primarily the personnel costs of labor, payroll taxes, and other direct costs of maintaining employees.
 
 Selling Expenses - Included in selling and general administrative expenses are the commission expenses for both employees and outside sales representatives ranging from 1.5% to 11.5% per dollar of sales. Our staffing sales representatives are paid a commission on new sales.  The Company expends significant amounts to advertise and distinguish its products from those of its competitors through the use of in-store advertising, printed media, internet and broadcast media. Advertising expenses for 2010 and 2009 were $16,402 and $66,967, respectively.
  Research, Testing and Development - Research, testing and development costs are expensed as incurred. Research and development expenses, including testing, were $13,743 and $0 for the years ended March 31, 2010 and 2009, respectively. Costs to acquire in-process research and development (IPR&D) projects that have no alternative future use and that have not yet reached technological feasibility at the date of acquisition are expensed upon acquisition.
 
 Income Taxes - We provide for income taxes in accordance with ASC 740-10 (formerly SFAS No. 109, “Accounting for Income Taxes.”) that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of the assets and liabilities.
  The recording of a net deferred tax asset assumes the realization of such asset in the future; otherwise a valuation allowance must be recorded to reduce this asset to its net realizable value. The Company considers future pretax income and, if necessary, ongoing prudent and feasible tax planning strategies in assessing the need for such a valuation allowance. In the event that the Company determines that it may not be able to realize all or part of the net deferred tax asset in the future, a valuation allowance for the deferred tax asset is charged against income in the period such determination is made. The Company has recorded full valuation allowances as of March 31, 2010 and 2009.
  Concentrations of Credit Risks - Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Although the amount of credit exposure to any one institution may exceed federally insured amounts, the Company limits its cash investments to high-quality financial institutions in order to minimize its credit risk. With respect to accounts receivable, such receivables are primarily from customers located in the United States. The Company extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is dependent on each customer’s financial condition.  At March 31, 2010 and 2009, the amounts due from foreign distributors were $1,363,756 and $1,363,756, which represent 0% and 15.7% of net accounts receivable, respectively, after the Company recognized an allowance for doubtful accounts at March 31, 2010 and 2009 of $1,363,756 and $681,000, respectively. The staffing business had three customers that accounted for approximately 13%, 13%, and 11% of gross sales. We have collected all amounts due from these customers but we no longer provide services to the 11% customer. In the staffing business, customer volume fluctuates with the seasons, the customers’ lines of business and other factors.
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 Index to Financial Statements
 Stock-Based Compensation
  We account for stock-based awards to employees and non-employees using the accounting provisions of ASC 718-10 (formerly the Statement of Financial Accounting Standards (“SFAS”) No. 123 — Accounting for Stock-Based Compensation and SFAS No. 123(R which revised SFAS No. 123) which provides for the use of the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Shares of common issued in connection with acquisitions are also recorded at their estimated fair values based on the Hull-White enhanced US ASC 718-10 standard. The standard establishes the accounting of transactions in which an entity exchanges its equity instruments for goods or services, particularly transactions in which an entity obtains employee services in share-based payment transactions. The statement also requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which the employee is required to provide service in exchange for the award.
 
 Loss per share
  Basic loss per share is calculated using the weighted average number of shares outstanding during the year. The Company has adopted ASC 260-10, Earnings per Share - Overall, and uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method, the dilutive effect on loss per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. As the Company has incurred net losses since its inception, the stock options and warrants as disclosed in note 15 were not included in the computation of loss per share as their inclusion would be anti-dilutive.
 
 On April 1, 2009, the Company adopted ASC 260-10-45, Earnings per Share - Overall - Other Presentation Matters, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and affects entities that accrue cash dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the awards.  ASC 260-10-45 states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method.  The adoption of ASC 260-10-45 does not have a material impact on the Company’s financial statements.
  Segment Information
  We operate in two industry segments, the development, manufacture and sale of private and commercial vehicle energy efficient enhancement products and employee staffing services. The enhancement products are designed to extend engine life, promote fuel efficiency and reduce emissions. These products are being marketed by the Company and sales were predominantly in the United States of America, Canada, Mexico and Nigeria.  The staffing segment was added on March 1, 2009 and provides staffing services primarily to the light industrial segment of the economy.  During the year ended March 31, 2010, the states of AZ, CA, FL and IL accounted for 80% of gross sales.
  Litigation - The Company is and may become a party in routine legal actions or proceedings in the ordinary course of its business. Management does not believe that the outcome of these routine matters will have a material adverse effect on the Company’s consolidated financial position or results of operations.
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 Index to Financial Statements
 Environmental - The Company’s enhancement products and related operations are subject to extensive federal, state and local laws, regulations and ordinances in the United States relating to the generation, storage, handling, emission, transportation and discharge of certain materials, substances and waste into the environment, and various other health and safety matters. Governmental authorities have the power to enforce compliance with their regulations, and violators may be subject to fines, injunctions or both. The Company must devote substantial financial resources to ensure compliance, and it believes that it is in substantial compliance with all the applicable laws and regulations.
 
 New accounting pronouncements:
 
 GAAP Hierarchy
  In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 amends AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The new accounting standard was effective for financial statements issued for interim and annual periods ending after September 15, 2009. The implementation of this standard during the quarter ended September 30, 2009 and subsequent periods did not have a material impact on our statements of operations or financial position.
 Contingencies in Business Combinations
  In April 2009, the FASB further amended ASC 805-10 by the issuance of FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. This amendment requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. If fair value cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with ASC 450-10 and ASC 450-20. Further, the FASB removed the subsequent accounting guidance for assets and liabilities arising from contingencies from ASC 805-10. The requirements of this amendment carry forward without significant revision the other guidance on contingencies of ASC 805-10, which was superseded by SFAS No. 141(R). The amendment also eliminates the requirement to disclose an estimate of the range of possible outcomes of recognized contingencies at the acquisition date. For unrecognized contingencies, the FASB requires that entities include only the disclosures required by ASC 450-10. This amendment was adopted effective April 1, 2009. There was no impact upon adoption, and its effects on future periods will depend on the nature and significance of business combinations subject to this statement.
  Disclosures about Derivative Instruments and Hedging Activities
  In March 2008, the FASB amended ASC 815-10 by issuing SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This amendment changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under ASC 815-10 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted this amendment on April 1, 2009, the beginning of the Company’s first fiscal 2010 quarter and its adoption did not have a material effect on the results of operations or statement of position in the subsequent periods.
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 Index to Financial Statements
 Convertible Debt
  In May 2008, the FASB issued a new accounting standard which provides guidance relating to accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement). This new standard requires recognition of both the liability and equity components of convertible debt instruments with cash settlement features. The debt component is required to be recognized at the fair value of a similar instrument that does not have an associated equity component. The equity component is recognized as the difference between the proceeds from the issuance of the note and the fair value of the liability. The standard also requires an accretion of the resulting debt discount over the expected life of the debt. Retrospective application to all periods presented is required and a cumulative-effect adjustment is recognized as of the beginning of the first period presented. This standard was effective for us in the first quarter of fiscal year 2010. The adoption of this standard did not have a material impact on our financial statements.
  Other Than Temporary Impairments
  In April 2009, the FASB issued FASB Staff Position (FSP) No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” amending ASC 320-10 to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. ASC 320-10 improves the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The effective date for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted.  The adoption of this amendment did not have an impact on the Company’s financial statements.
 Interim disclosures about fair value
  In April 2009, the FASB issued an amendment to an existing standard which provides guidance relating to interim disclosures about fair value of financial instruments. This new standard requires the disclosure of the carrying amount and the fair value of all financial instruments for interim reporting periods and annual financial statements of publicly traded companies (even if the financial instrument is not recognized in the balance sheet), including the methods and significant assumptions used to estimate the fair values and any changes in such methods and assumptions. This new standard is effective for interim reporting periods ending after June 15, 2009. We adopted this pronouncement during the quarter ended June 30, 2009 without material impact to our financial statements.
  Subsequent Events
  In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” which amends ASC 855-10 and requires entities to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. The statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855-10 as amended is effective for interim or annual financial periods ending after June 15, 2009, and shall be applied prospectively. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements.
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 Index to Financial Statements
 Transfers of Financial Assets
  In June 2009, the FASB amended ASC 860-10 by the codification of SFAS No. 166, “Accounting for Transfers of Financial Assets,” which was codified on December 23, 2009 in ASU No. 2009-16.  This requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. This amendment will improve the relevance, representation faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets. It will also take into account the effects of a transfer on its financial position, financial performance, and cash flows, and a transferor’s continuing involvement. ASC 860-10 is effective for annual periods beginning after November 15, 2009.  This statement is effective for the Company beginning April 1, 2010 and is not expected to have a material impact on the financial statements.
  Amendments to FASB interpretation No. 46(R)
  Also in June 2009, the FASB amended ASC 810-10 by the codification of SFAS No. 167, “Amendments to FASB interpretation No. 46(R),” on December 23, 2009 in ASU No. 2009-17. It establishes how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated. This statement improves financial reporting by enterprises involved with variable interest entities, which addresses the effects on certain provisions of ASC 810-10 as a result of the elimination of the qualifying special-purpose entity concept. ASC 810-10 was effective after November 15, 2009. This statement is effective for the Company beginning January 1, 2010 and had no material impact on the financial statements.
 Amendments to Fair Value Measurement
  In August 2009, the FASB issued Accounting Standard Update (“ASU”) No. 2009-05, Fair Value Measure and Disclosure Topic 820 – Measuring Liabilities at Fair Value, which provides amendments to ASC 820-10, Fair Value Measurement and Disclosures – Overall, for the fair measure of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques:  1. a valuation technique that uses: a. the quoted price of the identical when traded as an asset, b. quoted prices of similar liabilities or similar liabilities when traded as assets, 2. another valuation technique that is consistent with the principles of ASC 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this ASC update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendment also clarifies that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
  Amendment of Earnings Per Share Computations
  In September 2009, the FASB issued ASU No. 2009-08, Earnings Per Share – Amendments to ASC 260-10-S99, which represents technical corrections to ASC 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock . The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
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 Index to Financial Statements
 Amendment to Investments-Equity Method, Joint Ventures and Accounting for Equity Based Payments
  In September 2009, the FASB issued ASU No. 2009-09, Accounting for Investments-Equity Method and Joint Ventures and Accounting for Equity Based Payments to Non-Employees.  This Update represents a correction to ASC 323-10-S99-4, Accounting by an Investor for Stock Based Compensation Granted to Employees of an Equity Method Investee. Additionally, it adds observer comment Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees to the Codification. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
  Amendments to Fair Value Measurement that Calculate Net Asset Value Per Share
  In September 2009, the FASB issued ASU No. 2009-12, Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent), which provides amendments to ASC 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendment permits, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of these amendments on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of ASC 946 as of the reporting entity’s measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with ASC 820. These amendments also require disclosures by major category of investment about the attributes of investments within the scope of these amendments such as the nature of any restrictions on the investor’s ability to redeem its investments at the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be made by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments regardless of the method of fair value measurement used. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
 Amendment of the Treatment of Own-Share Lending Arrangements
  On October 13, 2009, the FASB issued ASU No. 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing.  The amendments to ASC 470-70, Debt with Conversion or Other Options, require companies to mark stock loan arrangements at fair value and recognize the cost of the arrangements by reducing the amount of additional paid-in capital on their financial statements. The requirement applies to offerings of convertible debt that are accompanied by a simultaneous share-lending agreement that is intended to help the underwriters and the purchasers of the bonds hedge their investments. In addition, the ASU also amends several other paragraphs of ASC 470-20. The changes will be effective for fiscal years that start on or after December 15, 2009. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
 
 Improving Disclosures About Fair Value Measurements
  In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures (ASC 820): Improving Disclosures about Fair Value Measurements.”  This update will require (1) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers; and (2) information about purchases, sales, issuances and settlements to be presented separately (i.e., present the activity on a gross basis rather than net) in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs).  This guidance clarifies existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs.
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 Index to Financial Statements
 The new disclosures and clarifications of existing disclosure are effective for fiscal years beginning after December 15, 2009, except for the disclosure requirements related to the purchases, sales, issuances and settlements in the roll forward activity of Level 3 fair value measurements.  Those disclosure requirements are effective for fiscal years ending after December 31, 2010.  The Company is still assessing the impact of this guidance and do not believe the adoption of this guidance will have a material impact on our financial statements.
  Subsequent Events
  In February 2010, the FASB issued new accounting guidance, under ASC 855 on Subsequent Events, which requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirements that an SEC filer disclose the date through which subsequent events have been evaluated. The guidance was effective upon issuance. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.
  Consolidation
  In February 2010, the FASB issued Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (ASC 810).” The amendments to the consolidation requirements of ASC 810 resulting from the issuance of Statement 167 are deferred for a reporting entity’s interest in an entity (1) that has all the attributes of an investment company or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies. An entity that qualifies for the deferral will continue to be assessed under the overall guidance on the consolidation of variable interest entities in Subtopic 810-10 (before the Statement 167 amendments) or other applicable consolidation guidance, such as the guidance for the consolidation of partnerships in Subtopic 810-20. The deferral is effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009, and for interim periods within that first annual reporting period, which coincides with the effective date of Statement 167. Early application is not permitted. At this time, management is evaluating the potential implications of this pronouncement and has not yet determined its impact on the Company’s consolidated financial statements.
 
 Derivatives and Hedging - Scope Exception Related to Embedded Credit Derivatives
  In March 2010, the FASB issued ASU 2010-11, Derivatives and Hedging (ASC 815) – Scope Exception Related to Embedded Credit Derivatives. This ASU removes a scope exception, and an entity that has a beneficial interest in securitized financial assets that includes a credit derivative feature must evaluate that feature for bifurcation from the host financial asset in accordance with the guidance at ASC 815. ASU 2010-11 is effective at the beginning of a reporting entity's first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of an entity's first fiscal quarter beginning after March 5, 2010. The Company does not expect that the adoption of ASU 2010-11 will have a material impact on its financial position, results of operations, or cash flows.
 
 Compensation - Stock Compensation
  ASU No. 2010-13 was issued in April 2010, and amends and clarifies ASC 718 with respect to the classification of an employee share based payment award with an exercise price denominated in the currency of a market in which the underlying security trades.  This ASU will be effective for the first fiscal quarter beginning after December 15, 2010, with early adoption permitted.
  Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.
 ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Smaller reporting companies are not required to provide the information required by this item.
 36
 Table of Contents
 Index to Financial Statements
 ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  The Financial Statements that constitute Item 8 are included at the end of this report beginning on Page F-1.
 ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  None.
  ITEM 9A(T).
CONTROLS AND PROCEDURES
  Disclosure Controls and Procedures
  The Company’s President who serves as its principal executive officer and the Chief Financial Officer who serves as the principal financial and accounting officer are responsible for establishing and maintaining disclosure controls and procedures for the Company as defined in Rules 13a-15(e) and 15d-(15(e) of the Securities Exchange Act of 1934.  Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, such as this report, is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and to reasonably assure that such information is accumulated and communicated to our management, including our President who also acts as our principal financial and principal accounting officer, to allow timely decisions regarding required disclosure.
 
 The Company’s management does not expect that our disclosure controls or our internal controls will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
 
 Under the supervision and with the participation of our management, including our President who serves as our principal executive officer and Chief Financial Officer who serves as our principal financial and accounting officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the period ended March 31, 2010 (the “Evaluation Date”). As of the Evaluation Date, the Company’s President and Chief Financial Officer concluded that the Company maintained disclosure controls and procedures that were not effective, because of the material weaknesses identified, in providing reasonable assurance that information required to be disclosed in it reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and that such information is accumulated and communicated to the Company’s management to allow timely decisions regarding required disclosure. Notwithstanding the existence of the material weakness described below, management has concluded that the consolidated financial statements in this Form 10-K fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods and dates presented. 37
 Table of Contents
 Index to Financial Statements
 Management’s Report on Internal Control over Financial Reporting
  The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.  The Company’s management assessed the effectiveness of its internal control over financial reporting as of March 31, 2010.  In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework .  The Company’s management has concluded that, as of March 31, 2010 the Company’s internal control over financial reporting was not effective based on this criteria.
  A material weakness is a significant deficiency, or combination of significant deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will occur and not be detected by management before the financial statements are published. In its assessment of the effectiveness in internal control over financial reporting as of March 31, 2010, the Company determined that there were control deficiencies that constituted a material weakness, as described below.
 
 The Company did not have adequate segregation of duties in its cash disbursement process. Also, mitigatingcontrols,such as monitoring controls, were not determined to be effective to mitigate the risk of materialmisstatement. Further, the Company did not have adequate controls in place over the authorization and recording of manual journal entries and over the authorization and retention of supporting documentation of expense reimbursements.
  This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.  The Company’s management's report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
 Management’s Remediation Initiatives
  Subsequent to March 31, 2010, management has implemented or is implementing the following procedures to address the material weakness noted above:
  ●

Review and authorization by senior management of all disbursements and transfers;●

Indentify and hire additional staff independent of the accounting functions to perform the cash management functions; and●

Review and authorization by senior management of all manual journal entries posted to the system and supporting detail for such entries.
 Changes in Internal Control over Financial Reporting
  There was no change in the Company’s internal control over financial reporting identified in connection with the Company’s evaluation that occurred during our last fiscal quarter (our fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
 ITEM 9B.
OTHER INFORMATION
  None.
 38
 Table of Contents
 Index to Financial Statements
  PART III
  
 ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 The following persons are our executive officers and directors as of the date hereof:
 
 Name

Age

PositionEdmond Lonergan

64

Chairman, PresidentJames Marshall

65

Chief Financial Officer, Secretary,  DirectorEdward Miller

67

DirectorPat Choate

69

Director
  The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee, indicating the principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
  Edmond Lonergan has been our Chief Executive Officer and a director since March 2006 and the President and Chief Executive Officer of EMTA Corp. since October 2004. He is also the founder of and, since 1996, has been active at Corporate Architects, Inc., a Scottsdale, Arizona-based consulting firm that provides mergers and acquisitions advice to public and private companies. Corporate Architects has extensive experience in reverse mergers, investment banking, and business and management consulting. Prior thereto he was involved in various capacities at a number of companies in the financial services, electronics and data processing industries.
  James Marshall has been our Chief Financial Officer since June 2006. Mr. Marshall has held certain accounting licensure from the states of Arizona, Michigan, California, Illinois and Florida. Mr. Marshall has been a director of REIT Americas, Inc. since August 2005 and Chief Financial Officer since March of 2007. He has and continues to be the chief financial officer for Safepay Solutions, Inc. since March of 2006. Mr. Marshall was chief financial officer for Bronco Energy Fund, Inc. from December 2004 through April 2006, and a director and chairman of the audit committee of Fidelis Energy, Inc. from October 2003 through February 2005. Mr. Marshall was the founder and chief executive officer of Residential Resources Mortgage Investments Corporation, RRR AMEX, a mortgage based REIT with assets in excess of $400 million and a staff of 42. Prior to March 1985, Mr. Marshall was the National Finance Partner for Kenneth Leventhal & Company and was Managing Partner of that firms Phoenix Office for five years. Career experiences include responsibilities for major land acquisitions and dispositions and their structuring. His audit and tax experience included publicly-held companies for which Mr. Marshall was responsible for banks, savings and loan associations, real estate developers, mortgage bankers, insurance companies, builders and contractors. Mr. Marshall has more than 35 years accounting, audit and tax experience on a wide range of public and private companies.
  Edward A. Miller has been a director since 2006. Since February 1996, Mr. Miller has been president and director of DSI Consulting, a business consulting firm in Florida and New Hampshire. For over forty years, Mr. Miller has served in senior management roles leading and managing a series of for-profit and not-for-profit organizations designed to develop, enhance and further the growth, capabilities and competitiveness of US companies and government agencies involved in the education, healthcare, environmental, energy, national security and manufacturing sectors. Mr. Miller’s education was acquired at the Western New England College where he received his Bachelor of Science degree in Mechanical Engineering. He has also completed all graduate courseware towards MSEE at the University of Massachusetts.
 39
 Table of Contents
 Index to Financial Statements
 Pat Choate has been a director since May 2006. Pat Choate is a political economist, think tank strategist, policy analyst, and author who studies U.S. competitiveness and public policy. Presently, he directs a Washington-based policy institute, the Manufacturing Policy Project, and teaches Advanced Issues Management at George Washington University’s Graduate School of Political Management. Mr. Choate also co-hosts the nationally syndicated weekly radio program “The Week Ahead.” Since the beginning in July 2006, Pat has been a nightly newsmaker on a Washington radio show hour where he discusses the issues of the day with guests in the news and the call in audience. Mr. Choate has a varied career in the private and public sectors. His public positions include that of economic advisor to two Governors of the State of Oklahoma, Commissioner of Economic Development for the State of Tennessee, and senior positions in the Federal Government at the US Commerce Department and the Office of Management and Budget. In the 1980’s, Pat Choate was Vice President for Policy for TRW, a diversified multinational corporation. Mr. Choate is the author of six books, dozens of monographs, and hundreds of articles on competitiveness, management, and public policy. Today, he is Director of the Manufacturing Policy Project, a Washington based public policy institute.
  Board of Directors
  Our bylaws state that the Board of Directors shall consist of not less than one person. The specific number of Board members within this range is established by the Board of Directors and is currently set at three. The terms of all directors will expire at the next annual meeting of our company’s stockholders, or when their successors are elected and qualified. Directors are elected each year, and all directors serve one-year terms. Officers serve at the pleasure of the Board of Directors. There are no arrangements or understandings between our company and any other person pursuant to which he was or is to be selected as a director, executive officer or nominee. There are no other persons whose activities are material or are expected to be material to our company’s affairs.
  The Board of Directors met three times during fiscal 2010. During that time, each Board member attended all of the meetings of the Board held during that period.
  Board of Directors - Committees
  We have an Audit Committee and a Compensation Committee.
  Audit Committee. The Audit Committee, currently consisting of Mr. Miller and Mr. Choate, reviews the audit and control functions of Green Planet Group, Inc., the Company’s accounting principles, policies and practices and financial reporting, the scope of the audit conducted by our company’s auditors, the fees and all non-audit services of the independent auditors and the independent auditors’ opinion and letter of comment to management and management’s response thereto. The Audit Committee was designated on October 1, 2005 and held four meetings during the fiscal year ended March 31, 2010.
  Compensation Committee. The Compensation Committee is currently comprised of two non-employee Board members, Pat Choate and Edward Miller. The Compensation Committee reviews and recommends to the Board the salaries, bonuses and prerequisites of our company’s executive officers. The Compensation Committee also reviews and recommends to the Board any new compensation or retirement plans and administers such plans. No executive officer of our company serves as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our company’s Board of Directors or Compensation Committee. The Compensation Committee held one meeting during the fiscal year ended March 31, 2010.
 40
 Table of Contents
 Index to Financial Statements
 Audit Committee Financial Expert
  The Company has a standing Audit Committee that includes two members. Mr. Miller has been designated as the “Audit Committee Financial Expert,” as defined by Regulation S-K, and is an “independent” director, as defined under the rules of NASDAQ National Stock Market and the SEC rules and regulations.
 
 ITEM 11.
EXECUTIVE COMPENSATION
 The following table sets forth the compensation of the Company’s Chief Executive Officer and director and each of the Company’s two other most highly compensated executive officers during the last three fiscal years of the Company. The remuneration described in the table does not include the cost to the Company of benefits furnished to the named executive officers, including premiums for health insurance and other benefits provided to such individual that are extended in connection with the conduct of the Company’s business.
 
 Summary Compensation Table
 SUMMARY COMPENSATION TABLEName and Principal Position

Year

Salary

($)

Stock

Awards

($) (1)

Total

($)Edmond L. Lonergan, Chief Executive Officer,

2010

$
63,184

$
60,000

$
123,184President and Director, Principle Executive Officer

2009

$
98,125

$
40,000

$
138,1252008

$
116,725

$
144,000

$
260,725James C. Marshall, Chief Financial Officer,

2010

$
64,000

$
30,000

$
90,000Secretary, Treasurer and Director, Principle

2009

$
89,773

$
20,000

$
109,773Accounting Officer

2008

$
78,000

$
48,000

$
126,000
 ____________
 (1)
Based on fair market value of common stock on date of award.
 (2)
Mr. Lonergan and Mr. Marshall have 900,000 and 750,000 options to acquire the same number of common shares of stock, respectively, available for exercise through March 31, 2011 at an exercise price of $0.20 per share. There were no other outstanding equity awards at the end of the year.
 41
 Table of Contents
 Index to Financial Statements
 Compensation of Directors
  During the fiscal year 2010 each independent director was awarded 333,334 shares of restricted common stock. Based on the stock price at the time of the award the value of the award was $13,333 for each director.  Each of these director have 300,000 options to acquire 300,000 shares of common stock at an exercise price of $0.20 per share expiring on March 31, 2011.
 ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT AND RELATED STOCKHOLDER MATTERS
  The following tables present information, to the best of the Company’s knowledge, about the beneficial ownership of its common stock on July 9, 2010 relating to the beneficial ownership of the Company’s common stock by those persons known to beneficially own more than 5% of the Company’s capital stock and by its directors and executive officers. The percentage of beneficial ownership for the following table is based on 150,674,739 shares of common stock outstanding.
  Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes shares of common stock that the stockholder has a right to acquire within 60 days through the exercise of any option, warrant or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of our common stock.
 
 Security Ownership of Certain Beneficial Owners
  Amount of

PercentName and Address of Beneficial Owner

Beneficial Ownership

of Class (1)Edmond Lonergan

10,989,834

7.3%Chairman, CEO, President33747 N. Scottsdale Rd., Suite 130Scottsdale, AZ 85266Cliff Blake

9,955,500

6.6%9724 E. Jagged Peak Rd.Scottsdale, AZ 85262All executive officers and directors as

14,231,502 (2)

9.5%a group (4 persons)
 ____________
 (1)
Rounded to the nearest tenth of a percent.(2)
Includes shares beneficially owned by officers and directors.
 42
 Table of Contents
 Index to Financial Statements
 Security Ownership of Management
  Amount of

PercentName and  Address of Beneficial Owner

Beneficial Ownership

of Class (1 )Edmond Lonergan

10,989,834

7.3%Chairman, President33747 N. Scottsdale Rd., Suite 130Scottsdale, AZ 85266James Marshall

2,300,000

1.5%Chief Financial Officer33747 N. Scottsdale Rd., Suite 130Scottsdale, AZ 85266Edward Miller

418,334

0.3%Director33747 N. Scottsdale Rd., Suite 130Scottsdale, AZ 85266Pat Choate

523,334

0.4%Director33747 N. Scottsdale Rd., Suite 130Scottsdale, AZ 85266Total

14,231,502

9.5%
 ____________
 (1)
Rounded to the nearest tenth of a percent.
 ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  We have not been a party to any transaction, proposed transaction, or series of transactions in which the amount involved exceeds $60,000, and in which, to its knowledge, any of its directors, officers, five percent beneficial security holder, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest except that during 2009 a company owned by the Chief Executive Office received a placement fee in conjunction with the acquisition of the Lumea assets resulting from a prior contract with the seller of the assets.
 43
 Table of Contents
 Index to Financial Statements
 ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
 On March 18, 2010, the Board of Directors authorized engaging Semple, Marchal & Cooper, LLP (“SMC”) as the Company’s new independent accountants to audit the Company’s financial statements for the fiscal year ending March 31, 2010.
  Audit Fees. The aggregate fees paid for the annual audit of financial statements included in our Registration Statements including the year ended March 31, 2009 amounted to approximately $155,439 and the review of our quarterly reports for the year ended March 31, 2009.
  Audit Related Fees. For the year ended March 31, 2010, we paid $141,945 to SMC for other audit related fees.
  Tax Fees. For the years ended March 31, 2009 and March 31, 2010, we paid no fees to SMC for tax services.
  All Other Fees. For the year ended March 31, 2009 and March 31, 2010, we paid no fees to SMC for any non-audit services.
  The above-mentioned fees are set forth as follows in tabular form:
  2009


2008Audit Fees

$
155,439


$
52,000Audit Related Fees


141,945



45,000Tax Fees


0



0All Other Fees


0



0
  The members of the Company’s independent Directors of the Board of Directors serves as the Audit Committee and has unanimously approved all audit and non-audit services provided by the independent auditors. The independent accountants and management are required to periodically report to the Audit Committee or Board of Directors regarding the extent of services provided by the independent accountants, and the fees for the services performed to date. There have been no non-audit services provided by our independent accountant for the year ended March 31, 2010.
 44
 Table of Contents
 Index to Financial Statements
 PART IV
 ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  The information required by this Item is set forth in the section of this Annual Report entitled “EXHIBIT INDEX” and is incorporated herein by reference.
 45
 Table of Contents
 Index to Financial Statements
 SIGNATURES
 
 In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 GREEN PLANET GROUP, INC.Dated:   July 14, 2010
By:
/s/  Edmond L. LonerganBy:  Edmond L. Lonergan

Its: Chief Executive Officer (Principal Executive Officer) and Director
 Dated:   July 14, 2010
By:
/s/  James C. MarshallBy:  James C. Marshall

Its: Chief Financial Officer (PrincipalFinancial Officer and

PrincipalAccounting Officer)
  In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 Dated:   July 14, 2010

/s/  Edmond L. LonerganEdmond L. Lonergan – Chief Executive Officer and Director
 Dated:   July 14, 2010

/s/  James C. MarshallJames C. Marshall –Chief Financial Officer and Director
 Dated:   July 14, 2010

/s/  Ed MillerEd Miller – Director
 Dated:   July 14, 2010

/s/  Pat ChoatePat Choate – Director
 46
 Table of Contents
 Index to Financial Statements
 EXHIBIT INDEX
 Number

Exhibit2.1

Purchase and Sale Agreement dated as of January 5, 2007 between Dyson Properties, Inc. and ATME Acquisitions, Inc., and wholly owned subsidiary of EMTA Holdings, Inc. (2)3.1

Certificate of Incorporation (1 and 8)3.2

By-Laws (1)4.1

Form of Callable Secured Convertible Note (1)4.2

Form of Stock Purchase Warrant (1)4.3

Amendment to Warrant (1)10.1

Agreement, dated October 1, 2004, between EMTA Corp. and Corporate Architects, Inc. (1)10.2

Agreement, dated June 15, 2006, between the Company and James Marshall (1)10.3

Securities Purchase Agreement, dated April 28, 2006, by and among the Company, AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC. (1)10.4

Registration Rights Agreement, dated April 28, 2006, by and among the Company, AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC. (1)10.5

Security Agreement, dated as of April 28, 2006, by and among the Company, AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC. (1)10.6

Intellectual Property Security Agreement, dated April 28, 2006, by and among the Company, AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC. (1)10.7

Amendment No. 1 dated August 9, 2006, to Registration Rights Agreement, dated April 28, 2006, by and among the Company, AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC. (1)10.8

Securities Purchase Agreement (5)10.9

Registration Rights Agreement (5)10.10

Term Note Security Agreement (5)10.11

Stock Pledge Agreement (5)10.12

Secured Term Note (5)10.13

Form of Term Note Security Agreement (5)10.14

Form of Production Holdings Warrant (5)10.15

Form of Exchange Warrant (5)10.16

Form of Put Option (5)10.17

Dyson Properties, Inc. Amended and Restated Sales/Purchase Agreement dated March 26, 2007 (6)10.18

Amendment No. 1 to Dyson Properties, Inc. Amended and Restated Sales/Purchase Agreement, dated June 26, 2007 (6)10.19

Amended and Restated Secured Term Note between EMTA Production Holdings, Inc. and Shelter Island Opportunity Fund, LLC, dated June 30, 2008 (6)10.20

Amendment to Securities Purchase Agreement by and among Shelter Island Opportunity Fund, LLC, EMTA Holdings, Inc., and EMTA Production Holdings, Inc., dated June 30, 2008 (6)10.21

Amended and Restated Secured Term Note between EMTA Production Holdings, Inc. and Shelter Island Opportunity Fund, LLC, dated December 10, 2007 (6)10.22

Amendment to Securities Purchase Agreement by and among Shelter Island Opportunity Fund, LLC, EMTA Holdings, Inc. and EMTA Production Holdings, Inc., dated December 10, 2007 (6)10.23

Asset Purchase Agreement by and between EMTA Holdings, Inc. through its wholly-owned subsidiary, Lumea, Inc., and Easy Staffing Services, Inc., ESSI, Inc. and Easy Staffing Solutions of IL, Inc. (7)10.24

Promissory Note from Lumea, Inc. to Easy Staffing Services, Inc., in the amount of $5,750,000 and Promissory Note from Lumea, Inc. to Easy Staffing Services, Inc. in the amount of $3,000,000 (7)10.25

Security Agreements by and between Lumea, Inc. and Easy Staffing Services, Inc. (7)10.26

Indemnification and Stock Option Agreement by and between the Company, Lumea, Inc. and Cliff Blake (7)
 (Continued)
 47
 Table of Contents
 Index to Financial Statements
 Number

Exhibit10.27

Commercial Financing Agreement by and between Lumea, Inc., Lumea Staffing of CA, Inc., Lumea Staffing, Inc., Lumea Staffing of IL, Inc. and Porter Capital Corporation (7)10.28

Amended and Restated Commercial Financing Agreement by and between Lumea, Inc., Lumea Staffing  of CA, Inc., Lumea Staffing, Inc., Lumea Staffing of IL, Inc. and Porter Capital Corporation (7)10.29

Validity Guarantee – Lonergan (7)10.30

Validity Guarantee – Marshall (7)21.1

List of Subsidiaries31.1

Officer’s Certificate Pursuant to Section 30231.2

Officer’s Certificate Pursuant to Section 30232.1

Certification Pursuant to Section 90632.2

Certification Pursuant to Section 906
 ____________
 (1)
Filed with registrations statement filed August 14, 2006(2)
Filed with Form 8-K filed January 10, 2007(3)
Filed with Form 8-K filed April 9, 2007(4)
Filed with Form 8-K filed June 8, 2007(5)
Filed with Form 8-K filed July 12, 2007(6)
Filed with Form 10-K for Fiscal Year Ended March 31, 2008, filed July 15, 2008(7)
Filed with Form 8-K filed March 16, 2009
 (8)
Filed with Form 8-K filed June 1, 2009
 48
 Table of Contents
 Index to Financial Statements
 Financial Statements
 
 INDEX
 
 PageYears Ended March 31, 2010 and 2009Report of Independent Registered Public Accounting Firm - Semple, Marchal & Cooper,LLP

F-2Consolidated Balance Sheets As of March 31, 2010 and 2009

F-3Consolidated Statements of Operations For the Years Ended March 31, 2010 and 2009

F-4Consolidated Statements of Stockholders’ Equity/(Deficit) For the Years Ended March 31, 2010 and2009

F-5Consolidated Statements of Cash Flows For the Years Ended March 31, 2010 and 2009

F-6 – F-7Notes to Consolidated Financial Statements March 31, 2010 and 2009

F-8 – F-31
  F-1
 Table of Contents
 Index to Financial Statements
 
 SEMPLE HEADER
 Report of Independent Registered Public Accounting Firm
    Board of Directors and Stockholders
 Green Planet Group, Inc.
  We have audited the accompanying consolidated balance sheets of Green Planet Group, Inc. as of March 31, 2010 and 2009 and the related consolidated statements of operations, changes in stockholders’ equity/(deficit), and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.
  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Green Planet Group, Inc. at March 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
  The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company’s significant operating losses and negative working capital raise substantial doubt about its ability to continue as a going concern.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
  /s/ Semple, Marchal & Cooper, LLPSemple, Marchal & Cooper, LLPPhoenix, ArizonaJuly 14, 2010
  INDEPENDENT MEMBER OF THE BDO SIEDMAN ALLIANCE
 F-2
 Table of Contents
 Index to Financial Statements
 Green Planet Group, Inc. and Subsidiaries
 Consolidated Balance Sheets
 
 March 31,


March 31,2010


2009ASSETSCurrent Assets:Cash

$
880,808


$
470,288Accounts receivable, net of allowance for doubtful accounts


3,330,736



4,349,866Inventory


280,122



369,403Prepaid expenses


476,169



1,654,432Total Current Assets


4,967,835



6,843,989Property, plant and equipment, net of accumulated depreciation


1,747,645



1,900,834Other Assets:Other assets


570,426



295,372Intangible assets


3,224,524



3,745,025Goodwill


4,624,671



8,979,822Total Other Assets


8,419,621



13,020,219Total Assets

$
15,135,101


$
21,765,042LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)Current Liabilities:Accounts payable

$
1,249,239


$
1,210,127Accounts payable - Affiliates


273,555



165,565Accrued liabilities


4,862,937



2,318,097Accrued payroll, taxes and benefits


9,400,058



2,446,929Cashless warrant liability


10,496



57,876Notes payable and amounts due within one year


11,014,332



6,536,202Convertible notes payable


5,054,100



5,054,100Derivative liability


251,715



791,732Total Current Liabilities


32,116,432



18,580,628Notes payable due after one year


2,963,104



9,061,650Total Liabilities


35,079,536



27,642,278Stockholders' Equity/(Deficit)Preferred Stock, $0.001 par value, 1,000,000 Authorized;  no shares issued and outstanding


–



–Common Stock, $0.001 par value, 250,000,000authorized, issued and outstanding 147,330,292 and 117,440,764 at March 31, 2010 and 2009, respectively


147,330



117,441Additional paid-in capital


16,180,591



14,590,073Accumulated deficit


(36,272,356
)


(20,584,750
)Total Stockholders' Equity/(Deficit)


(19,944,435
)


(5,877,236
)Total Liabilities and Stockholders' Equity/(Deficit)

$
15,135,101


$
21,765,042
 See accompanying notes to these consolidated financial statements.
 F-3
 Table of Contents
 Index to Financial Statements
  Green Planet Group, Inc. and Subsidiaries
 Consolidated Statements of Operations
  For the years endedMarch 31,


March 31,2010


2009Revenue:Sales, net of returns and allowances

$
57,380,667


$
9,170,794Cost of sales


50,272,331



7,030,015Gross Profit


7,108,336



2,140,779Operating Expenses:Selling, general and administrative


13,820,537



3,798,290Depreciation and amortization


1,068,778



308,833Allowance for bad debts


1,483,250



970,542Impairment of goodwill


4,355,151



–Research and development


13,743



–Total Operating Expenses


20,741,459



5,077,665Income/(Loss) From Operations


(13,633,123
)


(2,936,886
)Other Income and (Expense):Other income


26,400



416Interest income/(expense)


(2,080,883
)


240,193Loss before provision for income taxes


(15,687,606
)


(2,696,277
)Provision for/(Benefit of) income taxes


–



–Net Income/(Loss)

$
(15,687,606
)

$
(2,696,277
)Earnings (Loss) per share:Basic and diluted loss per share

$
(0.12
)

$
(0.04
)Weighted average shares outstanding


131,084,184



73,612,313
  See accompanying notes to these consolidated financial statements.
 F-4
 Table of Contents
 Index to Financial Statements
 Green Planet Group, Inc. and Subsidiaries
 Consolidated Statements of Stockholders’ Equity/(Deficit)
 
 Additional


AccumulatedShares


Common Stock


Paid-in Capital


Deficit


TotalBalance March 31, 2008


54,885,103


$
54,885


$
9,779,844


$
(17,888,473
)

$
(8,053,744
)Shares issued for cash


13,531,000



13,531



1,263,409







1,276,940Shares issued for acquisition


21,699,661



21,700



1,063,283







1,084,983Shares issued for services of consultants and others


25,425,000



25,425



2,039,075







2,064,500Shares issued for interest payments


700,000



700



62,300







63,000Shares issued on conversion of debt


1,200,000



1,200



23,800







25,000Stock option expense










358,362







358,362Net loss for the year ended March 31, 2009














(2,696,277
)


(2,696,277
)Balance March 31, 2009


117,440,764



117,441



14,590,073



(20,584,750
)


(5,877,236
)Shares issued for cash


4,380,000



4,380



115,620







120,000Shares issued for acquisition and payables


6,221,996



6,222



330,986







337,208Shares issued for services of consultants and others


18,556,182



18,556



922,844







941,400Shares issued for interest payments


731,350



731



19,769







20,500Stock option expense










201,299







201,299Net loss for the year ended March 31, 2010














(15,687,606
)


(15,687,606
)Balance March 31, 2010


147,330,292


$
147,330


$
16,180,591


$
(36,272,356
)

$
(19,944,435
)
 See accompanying notes to these consolidated financial statements.
 F-5
 Table of Contents
 Index to Financial Statements
 Green Planet Group, Inc. and Subsidiaries
 Consolidated Statements of Cash Flows
 
 For the years endedMarch 31,


March 31,2010


2009Cash Flows from Operating Activities:Net Loss

$
(15,687,606
)

$
(2,696,277
)Adjustments to reconcile net loss to net cashprovided (used) by operating activities:Depreciation and amortization


1,068,778



308,833Bad debt provision


1,483,250



970,542Inventory valuation


–



84,176Impairment of goodwill


4,355,151



–Amortization of debt discount


–



267,441Change in derivative valuation


(540,017
)


(1,127,138
)Shares issued for services and interest


961,900



2,127,500Stock option expense


201,299



358,362Cashless warrant conversion


(47,380
)


(199,503
)Changes in assets and liabilitiesReceivables


(464,120
)


(3,417,741
)Inventory


89,281



(36,786
)Prepaid expenses


1,178,263



(1,432,612
)Other assets


(275,054
)


(186,813
)Intangibles and goodwill


–



(12,148,767
)Accounts payable


352,320



394,193Accounts payable - affiliates


107,990



165,565Accrued liabilities


9,497,969



3,107,610Cash provided (used) by operating activities


2,282,024



(13,461,415
)Investing Activities:Net operating assets acquired in acquisitions


33,022



–Net cash paid in acquisitions


(38,869
)


–Proceeds from note receivable


–



137,500Capital expenditures


(93,080
)


(332,435
)Cash provided (used) by investing activities


(98,927
)


(194,935
)Financing Activities:Net borrowings of debt


–



12,871,300Repayment of debt


(1,892,597
)


(81,146
)Net proceeds from issuance of common shares


120,000



1,276,940Net cash provided (used) by financing activities


(1,772,577
)


14,067,094Net increase (decrease) in cash


410,520



410,744Cash at beginning of period


470,288



59,544Cash at end of period

$
880,808


$
470,288
 (Continued)
 See accompanying notes to these consolidated financial statements.
 F-6
 Table of Contents
 Index to Financial Statements
 Green Planet Group, Inc. and Subsidiaries
 Consolidated Statements of Cash Flows
 (Continued)
 
 For the years endedMarch 31,


March 31,2010


2009Supplemental disclosures of cash flow information:Cash paid during the year for:Interest

$
769,985


$
126,689Income taxes

$
–


$
–Non Cash Activities:Common stock issued for services, payable and interest

$
(961,900
)

$
(25,000
)Common stock issued for services, payable and interest


19,287



1,200Additional paid-in capital from conversion of note payable


942,613



23,800Stock issued in acquisitions


24,000



–
 See accompanying notes to these consolidated financial statements.
 
 F-7
 Table of Contents
 Index to Financial Statements
 Green Planet Group, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 For the Years Ended March 31, 2010 and 2009
 Note 1 - The Company
  The Company  - Green Planet Group, Inc.  (which is referred to herein together with its subsidiaries as “Green Planet,” “GPG,” “the Company,” “ we”, “us” or “our”), formerly EMTA Holdings, Inc. and before that Omni Alliance Group, Inc., was organized and incorporated in the state of Nevada. On March 31, 2006, we changed our name from Omni Alliance Group, Inc. to EMTA Holdings, Inc., and on May 22, 2009 we changed the name through merger with a wholly owned subsidiary to Green Planet Group, Inc. Our common stock now trades on the OTC-Bulletin Board market under the trading symbol “GNPG.”
  Nature of the Business - We are a specialty energy conservation chemical company that produces and supplies technologies to the global transportation, industrial and consumer markets. These technologies include gasoline, oil and diesel additives for engines and other transportation-related fluids and industrial lubricants. We also operate an industrial staffing and employment business by providing employees to the light industrial, medical and IT industries on a national basis.
  Acquisition and Merger
  Lumea, Inc.  - Effective March 1, 2009, the Company through its wholly owned subsidiary Lumea, Inc, formerly ATME Acquisitions, Inc., acquired certain assets and assumed certain liabilities of Easy Staffing Solutions, Inc. and its subsidiaries.  With these acquisitions Lumea became a supplier of the staffing needs for light industrial and other companies in 18 states.
  The aggregate purchase price is $12,464,752, to be paid in by the assumption of debt, issuance of long term notes and the Company’s common stock to the seller.  The Company assumed $2,505,694 of the seller’s liabilities and issued two notes to the seller in the amounts of $5,750,000 and $3,000,000, at interest rates of 3.25% per annum each, the first loan requires monthly principal and interest payments of $100,000 through March 2014 and the second note requires the payment of principal and interest at maturity, March 1, 2014. The Company also issued 21,699,661 shares of common stock with a fair value at the time of purchase of $1,084,983, and 2,500,000 stock options valued at $124,075.  The options granted vest at a rate of 150,000 shares per quarter as a guarantee fee until the notes due the seller are paid in full and become exercisable at $0.046 per share.  The scheduled maturity of those notes is March 2014, by which time all of the options will have vested.  If the Company prepays the underlying notes, the vesting will cease and the unvested options will become unexercisable.
  The purchase price was allocated to the fair value of assets acquired and liabilities assumed as follows:
 
 Property and equipment

$
191,910Customer relationships


3,293,020Goodwill


8,979,822Total assets acquired


12,464,752Total liabilities assumed


11,255,694Net assets acquired

$
1,209,058
 
 F-8
 Table of Contents
 Index to Financial Statements
 Continuance of Operations
  These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The general business strategy of the Company is to develop products, operate its sales force and to acquire additional businesses. The Company has negative working capital, has incurred operating losses and requires additional capital to fund development activities, meet its obligations and maintain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  During the year ended March 31, 2010 the Company received $120,000 for the issuance of 4,380,000 shares of common stock. The Company is in negotiations to obtain additional necessary capital to complete its regulatory approvals, expand production and sales and generally meet its business objectives. The Company forecasts that the equity and additional borrowing capacity that it is working to obtain will provide sufficient funds to complete its primary development activities and achieve profitable operations although the Company can provide no assurance that additional equity or additional borrowing capacity will be obtained.  As a result, the Company’s independent registered public accounting firm has issued a going concern opinion on the Company’s consolidated financial statements for the year ended March 31, 2010. Accordingly, these financial statements do not include any adjustments that might result from this uncertainty.
  Note 2 - Significant Accounting Policies
  Consolidation - The consolidated financial statements include the accounts of Green Planet Group, Inc. and its consolidated subsidiaries and wholly-owned limited liability company. The financial statements for the year ended March 31, 2009 only include the operations of Lumea, Inc. and its subsidiaries since March 1, 2009.  All significant intercompany transactions and profits have been eliminated.
  Use of Estimates - The preparation of financial statements in conformity with United States generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The more significant estimates relate to revenue recognition, contractual allowances and uncollectible accounts, intangible assets, accrued liabilities, derivative liabilities, income taxes, litigation and contingencies. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates.
  Cash Equivalents - The Company invests its excess cash in short-term investments with various banks and financial institutions. Short-term investments are cash equivalents, as they are part of the cash management activities of the company and are comprised of investments having maturities of three months or less when purchased.
  Allowance for Doubtful Accounts - The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. The allowance for doubtful accounts was $2,034,760 and $806,846 at March 31, 2010 and 2009, respectively.
  Inventories - Inventories are stated at the lower of cost or market value. Cost of inventories is determined by the first-in, first-out (FIFO) method. Obsolete or abandoned inventories are charged to operations in the period that it is determined that the items are no longer viable sales products.
  Property, Plant, and Equipment - Plant and equipment are carried at cost. Repair and maintenance costs are charged against operations while renewals and betterments are capitalized as additions to the related assets. The Company depreciates its plant and equipment and computers on a straight line basis. Estimated useful life of the plant is 31 years and the equipment ranges from 3 to 10 years.
 F-9
 Table of Contents
 Index to Financial Statements
 Intangible Assets - Intangible assets consist of patents, trademarks, government approvals and customer relationships (including client contracts). For financial statement purposes, identifiable intangible assets with a defined life are being amortized using the straight-line method over the estimated useful lives of seven years for the EPA license and 5 years for the customer relationships. Costs incurred by the Company in connection with patent, trademark applications and approvals from governmental agencies such as the Environmental Protection Agency, including legal fees, patent and trademark fees and specific testing costs, are expensed as incurred. Purchased intangible costs of completed developments are capitalized and amortized over an estimated economic life of the asset, generally seven years, commencing on the acquisition date. Costs subsequent to the acquisition date are expensed as incurred.
  Goodwill - Goodwill represents the excess of the purchase price over the fair value of the net assets acquired by Lumea. Goodwill and other intangible assets having an indefinite useful life are not amortized for financial statement purposes. The Company performs an annual impairment test each year and in the event that facts and circumstances indicate that goodwill and other identifiable intangible assets may be impaired, an interim impairment test would be required. The Company’s testing approach will utilize a discounted cash flow analysis to determine the fair value of its reporting units for comparison to their corresponding book values.  If the book value exceeds the estimated fair value for a reporting unit, a potential impairment is indicated. ASC 350-10 and ASC 360-10 prescribes the approach for determining the impairment amount, if any.
  Impairment of Long-Lived Assets - In accordance with ASC 360-10 (formerly the Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,”) the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the sum of the expected future cash flows of an asset is less than its carrying value, an impairment measurement is required. Impairment charges are recorded to the extent that an asset’s carrying value exceeds fair value. Accordingly, actual results could vary significantly from such estimates. During the year ended March 31, 2010 the Company recognized an impairment loss of $4,355,151 in conjunction with goodwill valuation for the period. There were no impairment charges during the year ended March 31, 2009.
  Fair Value Disclosures - The carrying values of cash, accounts receivable, deposits, prepaid expenses, accounts payable and accrued expenses generally approximate the respective fair values of these instruments due to their current nature.
  The fair values of debt instruments for disclosure purposes only are estimated based upon the present value of the estimated cash flows at interest rates applicable to similar instruments.
  The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features that are indexed to the Company’s common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within the control of the Company. In such instances, net-cash settlement is assumed for financial accounting and reporting, even when the terms of the underlying contracts do not provide for net-cash settlement. Such financial instruments are initially recorded at fair value and subsequently adjusted to fair value at the close of each reporting period.
  Derivative Financial Instruments - The Company accounts for derivative instruments and debt instruments in accordance with the interpretative guidance of ASC 815 which codified SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”), EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” APB No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants,” EITF 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios” (“EITF 98-5”), and EITF 00-27, “Application of Issue No. 98-5 to Certain Convertible Instruments” (“EITF 00-27”), and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features. It is necessary for the Company to make certain assumptions and estimates to value derivatives and debt instruments.
 F-10
 Table of Contents
 Index to Financial Statements
 Revenue Recognition - Revenues are recognized at the time of shipment of products to customers, or at the time of transfer of title, if later, and when collection is reasonably assured. All amounts in a sales transaction billed to a customer related to shipping and handling are reported as revenues.  Staffing revenue is recognized at the completion of each billing cycle to the customer after completion of the work.  The billing cycle is generally weekly.
  Provisions for sales discounts and rebates to customers are recorded, based upon the terms of sales contracts, in the same period the related sales are recorded, as a deduction to the sale. Sales discounts and rebates are offered to certain customers to promote customer loyalty and encourage greater product sales.  As a general rule, the Company does not charge interest on its accounts receivables.
  Components of Cost of Sales - Cost of sales is comprised of raw material costs including freight and duty, inbound handling costs associated with the receipt of raw materials, contract manufacturing costs, third party bottling and packaging, maintenance and storage costs, plant and engineering overhead allocation, terminals and other warehousing costs, and handling costs. The components of cost of sales of the staffing business are primarily the personnel costs of labor, payroll taxes, and other direct costs of maintaining employees.
  Selling Expenses - Included in selling and general administrative expenses are the commission expenses for both employees and outside sales representatives ranging from 1.5% to 11.5% per dollar of sales. Our staffing sales representatives are paid a commission on new sales.  The Company expends significant amounts to advertise and distinguish its products from those of its competitors through the use of in-store advertising, printed media, internet and broadcast media.Advertising expenses for 2010 and 2009 were $16,402 and $66,967, respectively.
  Research, Testing and Development - Research, testing and development costs are expensed as incurred. Research and development expenses, including testing, were $13,743 and $0 for the years ended March 31, 2010 and 2009, respectively. Costs to acquire in-process research and development (IPR&D) projects that have no alternative future use and that have not yet reached technological feasibility at the date of acquisition are expensed upon acquisition.
  Income Taxes - We provide for income taxes in accordance with ASC 740-10 (formerly SFAS No. 109, “Accounting for Income Taxes.”) that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of the assets and liabilities.
  The recording of a net deferred tax asset assumes the realization of such asset in the future; otherwise a valuation allowance must be recorded to reduce this asset to its net realizable value. The Company considers future pretax income and, if necessary, ongoing prudent and feasible tax planning strategies in assessing the need for such a valuation allowance. In the event that the Company determines that it may not be able to realize all or part of the net deferred tax asset in the future, a valuation allowance for the deferred tax asset is charged against income in the period such determination is made. The Company has recorded full valuation allowances as of March 31, 2010 and 2009.
  Concentrations of Credit Risks - Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Although the amount of credit exposure to any one institution may exceed federally insured amounts, the Company limits its cash investments to high-quality financial institutions in order to minimize its credit risk. With respect to accounts receivable, such receivables are primarily from customers located in the United States. The Company extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is dependent on each customer’s financial condition.  At March 31, 2010 and 2009, the amounts due from foreign distributors were $1,363,756 and $1,363,756, which represent 0% and 15.7% of net accounts receivable, respectively, after the Company recognized an allowance for doubtful accounts at March 31, 2010 and 2009 of $1,363,756 and $681,000, respectively. The staffing business had three customers that accounted for approximately 13%, 13%, and 11% of gross sales. We have collected all amounts due from these customers but we no longer provide services to the 11% customer. In the staffing business, customer volume fluctuates with the seasons, the customers’ lines of business and other factors.
 F-11
 Table of Contents
 Index to Financial Statements
 Stock-Based Compensation
  We account for stock-based awards to employees and non-employees using the accounting provisions of ASC 718-10 (formerly the Statement of Financial Accounting Standards (“SFAS”) No. 123 — Accounting for Stock-Based Compensation and SFAS No. 123(R which revised SFAS No. 123) which provides for the use of the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Shares of common issued in connection with acquisitions are also recorded at their estimated fair values based on the Hull-White enhanced US ASC 718-10 standard. The standard establishes the accounting of transactions in which an entity exchanges its equity instruments for goods or services, particularly transactions in which an entity obtains employee services in share-based payment transactions. The statement also requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which the employee is required to provide service in exchange for the award.
  Loss per share
  Basic loss per share is calculated using the weighted average number of shares outstanding during the year. The Company has adopted ASC 260-10, Earnings per Share - Overall, and uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method, the dilutive effect on loss per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. As the Company has incurred net losses since its inception, the stock options and warrants as disclosed in note 15 were not included in the computation of loss per share as their inclusion would be anti-dilutive.
  On April 1, 2009, the Company adopted ASC 260-10-45, Earnings per Share - Overall - Other Presentation Matters, which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and affects entities that accrue cash dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the awards.  ASC 260-10-45 states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method.  The adoption of ASC 260-10-45 does not have a material impact on the Company’s financial statements.
  Segment Information
  We operate in two industry segments, the development, manufacture and sale of private and commercial vehicle energy efficient enhancement products and employee staffing services. The enhancement products are designed to extend engine life, promote fuel efficiency and reduce emissions. These products are being marketed by the Company and sales were predominantly in the United States of America, Canada, Mexico and Nigeria.  The staffing segment was added on March 1, 2009 and provides staffing services primarily to the light industrial segment of the economy.  During the year ended March 31, 2010, the states of AZ, CA, FL and IL accounted for 80% of gross sales.
  Litigation - The Company is and may become a party in routine legal actions or proceedings in the ordinary course of its business. Management does not believe that the outcome of these routine matters will have a material adverse effect on the Company’s consolidated financial position or results of operations.
 F-12
 Table of Contents
 Index to Financial Statements
 Environmental - The Company’s enhancement products and related operations are subject to extensive federal, state and local laws, regulations and ordinances in the United States relating to the generation, storage, handling, emission, transportation and discharge of certain materials, substances and waste into the environment, and various other health and safety matters. Governmental authorities have the power to enforce compliance with their regulations, and violators may be subject to fines, injunctions or both. The Company must devote substantial financial resources to ensure compliance, and it believes that it is in substantial compliance with all the applicable laws and regulations.
  New accounting pronouncements:
 
 GAAP Hierarchy
  In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 amends AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The new accounting standard was effective for financial statements issued for interim and annual periods ending after September 15, 2009. The implementation of this standard during the quarter ended September 30, 2009 and subsequent periods did not have a material impact on our statements of operations or financial position.
  Contingencies in Business Combinations
  In April 2009, the FASB further amended ASC 805-10 by the issuance of FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. This amendment requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. If fair value cannot be reasonably estimated, the asset or liability would generally be recognized in accordance with ASC 450-10 and ASC 450-20. Further, the FASB removed the subsequent accounting guidance for assets and liabilities arising from contingencies from ASC 805-10. The requirements of this amendment carry forward without significant revision the other guidance on contingencies of ASC 805-10, which was superseded by SFAS No. 141(R). The amendment also eliminates the requirement to disclose an estimate of the range of possible outcomes of recognized contingencies at the acquisition date. For unrecognized contingencies, the FASB requires that entities include only the disclosures required by ASC 450-10. This amendment was adopted effective April 1, 2009. There was no impact upon adoption, and its effects on future periods will depend on the nature and significance of business combinations subject to this statement.
  Disclosures about Derivative Instruments and Hedging Activities
  In March 2008, the FASB amended ASC 815-10 by issuing SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133. This amendment changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under ASC 815-10 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted this amendment on April 1, 2009, the beginning of the Company’s first fiscal 2010 quarter and its adoption did not have a material effect on the results of operations or statement of position in the subsequent periods.
 F-13
 Table of Contents
 Index to Financial Statements
 Convertible Debt
  In May 2008, the FASB issued a new accounting standard which provides guidance relating to accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement). This new standard requires recognition of both the liability and equity components of convertible debt instruments with cash settlement features. The debt component is required to be recognized at the fair value of a similar instrument that does not have an associated equity component. The equity component is recognized as the difference between the proceeds from the issuance of the note and the fair value of the liability. The standard also requires an accretion of the resulting debt discount over the expected life of the debt. Retrospective application to all periods presented is required and a cumulative-effect adjustment is recognized as of the beginning of the first period presented. This standard was effective for us in the first quarter of fiscal year 2010. The adoption of this standard did not have a material impact on our financial statements.
  Other Than Temporary Impairments
  In April 2009, the FASB issued FASB Staff Position (FSP) No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” amending ASC 320-10 to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. ASC 320-10 improves the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The effective date for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted.  The adoption of this amendment did not have an impact on the Company’s financial statements.
  Interim disclosures about fair value
  In April 2009, the FASB issued an amendment to an existing standard which provides guidance relating to interim disclosures about fair value of financial instruments. This new standard requires the disclosure of the carrying amount and the fair value of all financial instruments for interim reporting periods and annual financial statements of publicly traded companies (even if the financial instrument is not recognized in the balance sheet), including the methods and significant assumptions used to estimate the fair values and any changes in such methods and assumptions. This new standard is effective for interim reporting periods ending after June 15, 2009. We adopted this pronouncement during the quarter ended June 30, 2009 without material impact to our financial statements.
  Subsequent Events
  In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” which amends ASC 855-10 and requires entities to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. The statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855-10 as amended is effective for interim or annual financial periods ending after June 15, 2009, and shall be applied prospectively. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements.
 F-14
 Table of Contents
 Index to Financial Statements
 Transfers of Financial Assets
  In June 2009, the FASB amended ASC 860-10 by the codification of SFAS No. 166, “Accounting for Transfers of Financial Assets,” which was codified on December 23, 2009 in ASU No. 2009-16.  This requires entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets. This amendment will improve the relevance, representation faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets. It will also take into account the effects of a transfer on its financial position, financial performance, and cash flows, and a transferor’s continuing involvement. ASC 860-10 is effective for annual periods beginning after November 15, 2009.  This statement is effective for the Company beginning April 1, 2010 and is not expected to have a material impact on the financial statements.
  Amendments to FASB interpretation No. 46(R)
  Also in June 2009, the FASB amended ASC 810-10 by the codification of SFAS No. 167, “Amendments to FASB interpretation No. 46(R),” on December 23, 2009 in ASU No. 2009-17. It establishes how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated. This statement improves financial reporting by enterprises involved with variable interest entities, which addresses the effects on certain provisions of ASC 810-10 as a result of the elimination of the qualifying special-purpose entity concept. ASC 810-10 was effective after November 15, 2009. This statement is effective for the Company beginning January 1, 2010 and had no material impact on the financial statements.
  Amendments to Fair Value Measurement
  In August 2009, the FASB issued Accounting Standard Update (“ASU”) No. 2009-05, Fair Value Measure and Disclosure Topic 820 – Measuring Liabilities at Fair Value, which provides amendments to ASC 820-10, Fair Value Measurement and Disclosures – Overall, for the fair measure of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques:  1. a valuation technique that uses: a. the quoted price of the identical when traded as an asset, b. quoted prices of similar liabilities or similar liabilities when traded as assets, 2. another valuation technique that is consistent with the principles of ASC 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this ASC update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendment also clarifies that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
  Amendment of Earnings Per Share Computations
  In September 2009, the FASB issued ASU No. 2009-08, Earnings Per Share – Amendments to ASC 260-10-S99, which represents technical corrections to ASC 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock . The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.
 F-15
 Table of Contents
 Index to Financial Statements
 Amendment to Investments-Equity Method, Joint Ventures and Accounting for Equity Based Payments
  In September 2009, the FASB issued ASU No. 2009-09, Accounting for Investments-Equity Method and Joint Ventures and Accounting for Equity Based Payments to Non-Employees.  This Update represents a correction to ASC 323-10-S99-4, Accounting by an Investor for Stock Based Compensation Granted to Employees of an Equity Method Investee. Additionally, it adds observer comment Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees to the Codification. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
  Amendments to Fair Value Measurement that Calculate Net Asset Value Per Share
  In September 2009, the FASB issued ASU No. 2009-12, Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent), which provides amendments to ASC 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendment permits, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of these amendments on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of ASC 946 as of the reporting entity’s measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with ASC 820. These amendments also require disclosures by major category of investment about the attributes of investments within the scope of these amendments such as the nature of any restrictions on the investor’s ability to redeem its investments at the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be made by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments regardless of the method of fair value measurement used. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
  Amendment of the Treatment of Own-Share Lending Arrangements
  On October 13, 2009, the FASB issued ASU No. 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing.  The amendments to ASC 470-70, Debt with Conversion or Other Options, require companies to mark stock loan arrangements at fair value and recognize the cost of the arrangements by reducing the amount of additional paid-in capital on their financial statements. The requirement applies to offerings of convertible debt that are accompanied by a simultaneous share-lending agreement that is intended to help the underwriters and the purchasers of the bonds hedge their investments. In addition, the ASU also amends several other paragraphs of ASC 470-20. The changes will be effective for fiscal years that start on or after December 15, 2009. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
 F-16
 Table of Contents
 Index to Financial Statements
 Improving Disclosures About Fair Value Measurements
  In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures (ASC 820): Improving Disclosures about Fair Value Measurements.”  This update will require (1) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers; and (2) information about purchases, sales, issuances and settlements to be presented separately (i.e., present the activity on a gross basis rather than net) in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs).  This guidance clarifies existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs.
  The new disclosures and clarifications of existing disclosure are effective for fiscal years beginning after December 15, 2009, except for the disclosure requirements related to the purchases, sales, issuances and settlements in the roll forward activity of Level 3 fair value measurements.  Those disclosure requirements are effective for fiscal years ending after December 31, 2010.  The Company is still assessing the impact of this guidance and do not believe the adoption of this guidance will have a material impact on our financial statements.
  Subsequent Events
  In February 2010, the FASB issued new accounting guidance, under ASC 855 on Subsequent Events, which requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirements that an SEC filer disclose the date through which subsequent events have been evaluated. The guidance was effective upon issuance. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements.
  Consolidation
  In February 2010, the FASB issued Accounting Standards Update 2010-10 (ASU 2010-10), “Consolidation (ASC 810).” The amendments to the consolidation requirements of ASC 810 resulting from the issuance of Statement 167 are deferred for a reporting entity’s interest in an entity (1) that has all the attributes of an investment company or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies. An entity that qualifies for the deferral will continue to be assessed under the overall guidance on the consolidation of variable interest entities in Subtopic 810-10 (before the Statement 167 amendments) or other applicable consolidation guidance, such as the guidance for the consolidation of partnerships in Subtopic 810-20. The deferral is effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009, and for interim periods within that first annual reporting period, which coincides with the effective date of Statement 167. Early application is not permitted. At this time, management is evaluating the potential implications of this pronouncement and has not yet determined its impact on the Company’s consolidated financial statements.
 
 Derivatives and Hedging - Scope Exception Related to Embedded Credit Derivatives
  In March 2010, the FASB issued ASU 2010-11, Derivatives and Hedging (ASC 815) – Scope Exception Related to Embedded Credit Derivatives. This ASU removes a scope exception, and an entity that has a beneficial interest in securitized financial assets that includes a credit derivative feature must evaluate that feature for bifurcation from the host financial asset in accordance with the guidance at ASC 815. ASU 2010-11 is effective at the beginning of a reporting entity's first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of an entity's first fiscal quarter beginning after March 5, 2010. The Company does not expect that the adoption of ASU 2010-11 will have a material impact on its financial position, results of operations, or cash flows.
 F-17
 Table of Contents
 Index to Financial Statements
 Compensation - Stock Compensation
  ASU No. 2010-13 was issued in April 2010, and amends and clarifies ASC 718 with respect to the classification of an employee share based payment award with an exercise price denominated in the currency of a market in which the underlying security trades.  This ASU will be effective for the first fiscal quarter beginning after December 15, 2010, with early adoption permitted.
  Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.
  Note 3 - Inventories
  Inventory consists of finished goods and raw material as follows:
  March 31,

2010


March 31,

2009Finished goods

$
68,257


$
173,523Raw material


211,865



195,880$
280,122


$
369,403
 
 Note 4 - Property, Plant and Equipment
  At March 31, 2010 and 2009, equipment and computers consisted of the following:
  March 31,

2010


March 31,

2009Property and plant

$
1,452,146


$
1,452,146Equipment and computers


858,328



746,611Less accumulated depreciation


(562,829
)


(297,923
)Net equipment and Computers

$
1,747,645


$
1,900,834
  During the years ended March 31, 2010 and 2009, depreciation and amortization expense was $264,906 and $127,227, respectively.
 F-18
 Table of Contents
 Index to Financial Statements
 Note 5 - Intangible Assets and Goodwill
  Intangible assets consist of technology of production and license rights under the Environmental Protection Agency to market one of the products acquired in the acquisition of White Sands, L.L.C. on March 31, 2006. The Company intends to market the related products as soon as production and marketing strategies can be completed. The Company is amortizing this investment over its estimated useful life of seven years on a straight line basis. For the years ended March 31, 2010 and March 31, 2009, amortization was $126,723 in each year. The customer relationships are the value of the purchased business relationships acquired as part of the purchase by Lumea of the staffing business on March 1, 2009 and the addition during 2010 of $283,371 in conjunction with two staffing acquisitions.  The carrying value of this intangible is being amortized over 5 years and for the years ended March 31, 2010 and March 31, 2009 the amortization was $677,149 and $54,884, respectively.  At March 31, 2010, the Company evaluated its goodwill relative to its staffing business and recognized an impairment of $4,355,151 and reduction of the goodwill by a like amount.  The adjustment to the valuation was based on the calculation of the net realizable value of the assets.
  Intangible assets subject to amortization:
  Weighted

March 31, 2010Average

Gross Carrying


Accumulated


Net CarryingUseful Life

Amount


Amortization


AmountIntangible assets subject to amortization:EPA licenses
7 years

$
887,055


$
506,889


$
380,166Customer relationships
5 years


3,576,391



732,033



2,844,358$
4,463,446


$
1,238,922


$
3,224,524Goodwill not subject to amortization:Goodwill:Goodwill


$
8,979,822


$
4,355,151
(1)

$
4,624,671$
8,979,822


$
4,355,151


$
4,624,671(1)Impairment valuationWeighted

March 31, 2009Average

Gross Carrying


Accumulated


Net CarryingUseful Life

Amount


Amortization


AmountIntangible assets subject to amortization:EPA licenses
7 years

$
887,055


$
380,166


$
506,889Customer relationships
5 years


3,293,020



54,884



3,238,136$
4,180,075


$
435,050


$
3,745,025Goodwill not subject to amortization:Goodwill:Goodwill


$
8,979,822


$
–


$
8,979,822$
8,979,822


$
–


$
8,979,822
 F-19
 Table of Contents
 Index to Financial Statements
 The scheduled amortization to be recognized over the next five years is as follows:
 
 2011

$
842,0002012

$
842,0002013

$
842,0002014

$
698,524
  Note 6 - Accrued Liabilities
  Accrued liabilities consist of the following as of March 31, 2010 and 2009:
 
 March 31,

2010


March 31,

2009Accrued contingent liabilities

$
1,278,151


$
1,278,151Accrued interest


2,629,271



804,717Other accrued expenses and workmen’s compensation claims


955,515



235,229$
4,862,937


$
2,318,097
  As part of our testing of products and new applications the Company agreed to reimburse one of our testing partners for the costs incurred in such testing.
  Note 7 – Accrued Payroll, Taxes and Benefits
  Accrued payroll, taxes and benefits was $9,400,058 and $2,446,929 at March 31, 2010 and 2009, respectively.
  Subsidiaries of the Company are delinquent in the payment of their payroll tax liabilities with the Internal Revenue Service and various states.  As of March 31, 2010, unpaid payroll taxes total $8,114,368.   The Company has estimated the related penalties and interest at approximately $1,227,283 through March 31, 2010, which are included in accrued liabilities at March 31, 2010.  The estimated penalties and interest liability could be subject to material revision in the future.  The Company expects to pay these delinquent payroll tax liabilities in installments as soon as possible subject to negotiations with the Internal Revenue Service and various state and local municipalities.
 F-20
 Table of Contents
 Index to Financial Statements
 Note 8 - Notes and Contracts Payable
  March 31,2010


2009Revolving line of credit against factored Lumea receivables (2)

$
2,011,018


$
2,055,015Bank loans, payable in installments


340,657



359,803Mortgage loan payable, monthly payments of principal  and  interest at 3 month LIBOR plus 4.7% (1)


790,683



806,853Payments due seller of XenTx Lubricants


254,240



254,240Loan from Dyson


60,000



60,000Notes payable


1,336,692



1,479,650Loans from individuals, due within one year


778,656



471,356Purchase note payable


1,574,555



1,575,139Purchase note 1


4,805,568



5,650,000Purchase note 2


2,025,367



2,888,796Total


13,977,436



15,597,852Less current portion


11,014,332



6,536,202Long-term debt

$
2,963,104


$
9,061,650
 ____________
 (1)
In conjunction with the acquisition of Dyson, the mortgage became payable as a result of the change of control of that company. The Company is in the process of refinancing the property.(2)
The Company maintains a $7 million line of credit relating to its factored accounts receivable.
  Bank Loans consist of two loans that became due in the first quarter of 2009; these loans are secured by receivables, inventory and equipment in Durant, Oklahoma.  The Company is working to replace these loans and has arranged a payment schedule to retire these loans. The Mortgage Loan Payable has matured as a result of the change in control of the operations in Durant.  The Company continues to make principal and interest payments while the Company obtains a replacement loan on the property.  Interest is reset quarterly at Libor plus 4.7%.
  The amounts due sellers bear interest at a rate of 8.0% and is due on March 31, 2011.
  Substantially all of the staffing receivables are pledged as collateral for the revolving line of credit.  At March 31, 2010, the Company had pledged receivables of $2,488,760.  This line of credit has been renewed through March 31, 2011.
 F-21
 Table of Contents
 Index to Financial Statements
 Notes payable include amounts due in one year consists of the loan from Shelter Island Opportunity Fund with interest at 12.25% per annum and secured by the plant and equipment in Durant, Oklahoma. Subsequent to the end of the year, the lender and the Company have negotiated a modified payment schedule to bring this loan current. In conjunction with this settlement, substantial portions of this note will subsequently be reflected as long-term.  Purchase Notes 1 and 2 are secured by all of the business assets of Lumea.  Maturities for the remainder of the loans are as follows:
 
 For the Years Ending March 31,


Amount2012

$
127,8742013

$
126,5522014

$
2,122,2842015

$
37,731Thereafter

$
589,647
 
 The balance of the notes payable consist of commercial loans of a vehicles and equipment in the normal course of business.
  The Loans from individuals includes four loans which are all due within one year and bear interest from 9% to 12%.
  Substantially all of the Company’s assets are pledged as collateral for our debt obligations at March 31,2010.
  The Company was in default on $1,574,555 under the Purchase Note Payable, litigation has commencedand the parties are in negotiations to settle this obligation for a reduced amount payable over the nextseveral years. Subsequent to the end of the year, the Company has commenced litigation against thesellers of the staffing business to the Company in March, 2009. The litigation seeks to rescind thepurchase and other equitable relief and the Company has stopped making scheduled payments on thePurchase note 1 ($4,805,568) and Purchase note 2 ($2,025,367) and does not intend to make futurepayments on these notes. The Company has included the Purchase note 1 note in the due within one yearpursuant to generally accepted accounting principles (GAAP). The Company has received a garnishment from the ACE with respect to the payments on the Purchase note 1 seeking payment of the amounts due under the note for obligations of the seller.  The Company has resisted these claims and is pursuing its rights through the courts.  Substantially all of Purchase note 2represents potential payments to third party taxing authorities under the successor liability statutes ofvarious states and the Company may be forced to make these payments thereon to maintain its licenses inthose states. The litigation is seeking restitution of any such amounts paid under these obligations. Othernotes have been modified during the year changing the maturity date and restructuring the paymentstructure.
  Note 9 - Income Taxes
  Through March 31, 2010, we recorded a valuation allowance of $11,236,467 against deferred income tax assets primarily associated with tax loss carry forwards. Our significant operating losses experienced in prior years establishes a presumption that realization of these income tax benefits does not meet a “more likely than not” standard.
  We have net operating loss carry forwards of approximately $26,672,547. Our net operating loss carry forwards will expire between 2025 and 2030.
 F-22
 Table of Contents
 Index to Financial Statements
 Significant components of our deferred tax assets and liabilities at the balance sheet dates were as follows:
 
 March 31,2010

2009Deferred Tax Assets and LiabilitiesDeferred tax assets:Net operating loss carryforwards

$
10,273,127


$
5,480,393Allowance for doubtful accounts


963,340



390,822Total


11,236,467



5,871,215Less: Valuation allowance


(11,236,467
)


(5,871,215
)Total deferred tax assets


–



–Total deferred tax liabilities


–



–Net deferred tax liabilities

$
–


$
–
 
 A reconciliation of the federal statutory rate to the effective tax rate is as follows:
 
 Fiscal Years Ended March 31,2010

2009ReconciliationIncome tax credit at statutory rate

$
(4,221,701
)

$
(780,303
)Effect of state income taxes


(571,032
)


(105,545
)Valuation allowance


4,792,733



885,848Income taxes (credit)

$
–


$
–
  Future realization of the net operating losses is dependent on generating sufficient taxable income prior to their expiration. Tax effects are based on a 34% Federal income tax rate. The net operating losses expire as follows:
  Amount2025

$
1,524,5412026


5,132,2982027


3,052,9022028


2,251,0302029


2,295,0082030


12,416,768Total net operating loss available

$
26,672,547
 
 The Company is subject to various state income tax laws.  The carryover of net operating losses in the various states range from five (5) years to fifteen (15) years based on the actual business activities within each state.
 F-23
 Table of Contents
 Index to Financial Statements
 Note 10 - Fair Value Measurements
  The Company adopted the amendments to ASC 820-10 that apply to certain assets and liabilities that are being measured and reported on a fair value basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosure about fair value measurements.  This ASC enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. ASC 820-10 requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
  Level 1:  Quoted market prices in active markets for identical assets or liabilities.
  Level 2:  Observable market based inputs or unobservable inputs that are corroborated by market data.
  Level 3:  Unobservable inputs that are not corroborated by market data.
  The Company records liabilities related to its derivative liability (See Note 11 – Derivative Financial Instruments) and the cashless warrant liability, both consisting of warrants and options outstanding, at their fair market values as provided by ASC 820-10.  The Company used the binomial method to determine the fair value of each derivative.
 The following table provides fair market measurements of the derivative liability and cashless warrant liability as of March 31, 2010:
  Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3)Derivative liability

$
251,715Cashless warrant liability


10,496$
262,211
  The change in fair market value of the derivative liability and cashless warrant liability is included in interest expense in the Consolidated Statements of Operations.
 
 The following table provides a reconciliation of the beginning and ending balances of the derivative liability and cashless warrant liability as of March 31, 2010:
  Derivative Liability


Cashless Warrant Liability


TotalBeginning balance April 1, 2009

$
791,732


$
57,876


$
849,608Change in fair market value of derivative liability and cashless warrant liability


(540,017
)


(47,380
)


(587,397
)Ending balance March 31, 2010

$
251,715


$
10,496


$
262,211
 F-24
 Table of Contents
 Index to Financial Statements
 Certain financial instruments are carried at cost on the consolidated balance sheets, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, other short-term liabilities, and capital lease obligations.
 
 Note 11 – Convertible Debt
  The Company entered into a Convertible Loan Agreement which also entitled the lenders to warrants and to convert the loans, at their option, to common stock of the Company. The debt is convertible at a rate of 50% of the then current market price at the time of conversion. At March 31, 2010 and 2009, the value of the 6% Convertible Notes, with interest quarterly, was as follows:
  Maturity

Face Amount


Conversion Derivative


BalanceApril 28, 2009

$
327,050


$
327,050


$
654,100August 17, 2009


700,000



700,000



1,400,000October 28, 2009


300,000



300,000



600,000November 10, 2009


1,200,000



1,200,000



2,400,000Total

$
2,527,050


$
2,527,050


$
5,054,100
 
 Interest expense for the year ended March 31, 2010 and 2009 was $271,124 and $154,507, respectively.
  Note 12 – Derivative Financial Instruments
  In connection with various financings through November 10, 2006, the Company has issued warrants to purchase shares of common stock in conjunction with the convertible notes to purchase 12,000,000 shares of common stock at an exercise price of $2.50 per share. The Company also issued warrants to a broker in the transaction for the exercise of 70,000 shares of common stock at an exercise price of $2.50. These warrants expire if not exercised at various dates in 2013 through November 10, 2013. At March 31, 2010, all of the 12,000,000 warrants have been issued entitling the lender to one share for each warrant at an exercise price of $2.50 per share.
  The agreements include registration rights and certain other terms and conditions related to share settlement of the embedded conversion features and the warrants. In this instance, ASC 815-10, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”, requires allocation of the proceeds between the various instruments and the derivative elements carried at fair values.
  In addition, in conjunction with financings, purchases and consulting transactions between April 1, 2007 and March 31, 2009 the Company issued additional warrants, net of expirations, to purchase 8,725,000 shares of the Company’s common stock at exercise prices between $0.75 and $2.50 per share.  The options granted vest at a rate of 150,000 shares per quarter as a guarantee fee until the notes due the seller are paid in full and become exercisable at $0.046 per share.  The scheduled maturity of those notes is March 2014, by which time all of the options will have vested.  If the Company prepays the underlying notes, the vesting will cease and the unvested options will become unexercisable.  No warrants or options have been exercised.
 F-25
 Table of Contents
 Index to Financial Statements
 At March 31, 2010, there were 18,225,000 shares subject to warrants and options at a weighted average exercise price of $1.95.
  Number of Shares


Weighted AverageSubject to Outstanding


RemainingWarrants and Options


Contractual LifeExercise Price


and Exercisable


(years)$ 0.75


5,775,000


2.25$ 2.50


12,450,000


3.2618,225,000
  In addition to the spot price of the stock and remaining term of the warrant, other factors used in the binomial model included in the analysis at March 31, 2010 were the volatility of 227.1%, risk free rate of between 0.41% and 2.55% and a dividend rate of $0 per period.
 
 Note 13 - Commitments and Contingencies
  Concentration of Credit Risk
  Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash. The Company periodically evaluates the credit worthiness of financial institutions, and maintains cash accounts only in large high quality financial institutions, thereby minimizing exposure for deposits in excess of federally insured amounts.
 
 Lease Commitments
  The Company has lease agreements for office space in Scottsdale, Arizona and for 20 offices throughout the United States. The remaining lease commitment for the two Scottsdale offices are 3 and 5 years and the other offices are year to year or month-to-month. The following table sets forth the aggregate minimum future annual lease commitments at March 31, 2010 under all non-cancelable leases for fiscal years ending March 31:
  Amount2011

$
247,0392012


186,7812013


99,0182014


60,0002015


60,000Thereafter


50,000$
702,838
  Lease expense for the years ended March 31, 2010 and 2009 were $527,098 and $99,431, respectively.  The total of all scheduled lease payments, assuming all locations are continued at the same rates, is $320,037 per year.
 F-26
 Table of Contents
 Index to Financial Statements
 Workmens’ Compensation Claims
  In conjunction with our staffing business, in states other than those that require participation in state funded programs, we maintain a workmens’ compensation policy to cover claims by employees. The Company retains the first portion of each such claims and the funds the amount to the insurance carrier on a current basis.  Should our claims experience increase in frequency and/or severity our claims losses would increase substantially.
 
 General Liabilities
  The Company is subject to normal recurring litigation as a result of its normal business lines. The Company attempts to provide for all losses as known. There may be losses or claims that the Company is not currently aware of or has not been provided information as to the claims or the nature of the claim as of the financial statement review date.
 
 Note 14 - Related Party Transactions
  In conjunction with the acquisition of the assets of Lumea, a company owned by the President/CEO of the Company had a prior placement agreement with the Sellers of the assets and as such was entitled to receive compensation for such placement with any entity.  As part of the closing that company was paid a fee of $168,333 which was paid by the issuance of 3,366,667 shares of Green Planet’s restricted common stock. The executives of the Company were issued a total of 1.5 million restricted shares of common stock during 2009 as part of their compensation.  The Company recognized expense of $60,000 in conjunction with these issuances.
 
 Note 15 - Company Stock
  Preferred Stock
  At March 31, 2010 and 2009, the Company had 1,000,000 shares of $0.001 par value authorized and no outstanding or issued shares. If and when issued, such shares will have the rights, preferences, privileges and restrictions as determined by the Board of Directors.
 Common Stock
  At March 31, 2010 and 2009, the Company had 250,000,000 shares authorized of $0.001 par value common stock, of which issued and outstanding shares were 147,330,292 and 117,440,764, respectively.
 Warrants
  In conjunction with four fundings during the year ended March 31, 2007, the Company issued 7,000,000 warrants at an exercise price of $2.50 per share and 5,000,000 warrants to cure a default caused by late filing of the registration statement with the Securities and Exchange Commission and 700,000 cashless warrants to the broker that brought the loan packages to the Company. All of these warrants expire seven years from issue.
 F-27
 Table of Contents
 Index to Financial Statements
 Also, the Company issued 1,400,000 cashless warrants to the seller in conjunction with the acquisition of Dyson Properties, Inc. that expired March 26, 2010.
  During the year ended March 31, 2008, the Company issued 5,775,000 warrants at an exercise price of $0.75 per share and 519,750 cashless warrants at an exercise price of $0.75 for a period of 5 years in conjunction with a loan funding in June of 2007.  The Company also issued warrants to purchase 500,000 shares at an exercise price of $0.75 for a term of two years in conjunction with the investor’s purchase of common stock that expire on May 21, 2009.
  At March 31, 2010, the status of outstanding warrants is as follows:
  Issue Date

Shares Exercisable

Weighted Average

Exercise Price

Expiration DateSeptember 27, 2005

450,000

$
2.50

September 26, 2010April 29, 2006

1,866,667

$
2.50

April 28, 2013June 28, 2006

5,000,000

$
2.50

August 10, 2013August 17, 2006

1,633,333

$
2.50

August 17, 2013October 28, 2006

700,000

$
2.50

October 28, 2013November 10, 2006

2,800,000

$
2.50

November 10, 2013July 1, 2007

5,775,000

$
.75

June 30, 2012Cashless April 20 - November 10, 2006

700,000

$
2.50

April 9 - November 10, 2015Cashless July 1, 2007

519,750

$
.75

June 30, 2012
 
 The warrants have no intrinsic value at March 31, 2010.
 
 Stock Options
  At March 31, 2010, the Company had one stock option plan under which grants were outstanding. The stock options outstanding are for grants issued under the Company’s 2007 Stock Incentive Plan.
 
 The 2007 Stock Incentive Plan
  During the fiscal year ended March 31, 2010, the Company adopted a stock option plan, entitled the “2007 Incentive Plan” (the “2007 Plan”), under which the Company may grant options to purchase up to 20,000,000 shares of common stock.
 
 The 2007 Plan is administered by the Board of Directors or a Committee of the Board of Directors which has the authority to determine the persons to whom the options may be granted, the number of shares of common stock to be covered by each option grant, and the terms and provisions of each option grant. Options granted under the 2007 Plan may be incentive stock options or non-qualified options, and may be issued to employees, consultants, advisors and directors of the Company and its subsidiaries. The exercise price of options granted under the 2007 Plan may not be less than the fair market value of the shares of common stock on the date of grant, and may not be granted more than ten years from the date of adoption of the plan or exercised more than ten years from the date of grant.
 F-28
 Table of Contents
 Index to Financial Statements
 The following table sets forth the Company’s stock option activity during the year ended March 31, 2010:
 
 Shares

Underlying

Options

Weighted

Average

Exercise

Price

Weighted

Average

Remaining

Contractual

Life

Aggregate

Intrinsic

ValueOutstanding at March 31, 2008
5,415,000

$
.20

3.0

–Granted
–


–

–

–Exercised
–


–

–

–Canceled
450,000


.20

–

–Outstanding at March 31, 2009
4,965,000


.20

2.0

–Granted
–


–

–

–Exercised
–


–

–

–Canceled
–


–

–

–Outstanding at March 31, 2010
4,965,000

$
.20

1.0

–
 
 The following table sets forth the status of the Company’s stock options as of March 31, 2010:
  Number of

Options


Weighted-Average

Grant-Date

Fair ValueNon-vested as of March 31, 2008


5,415,000


$
.11Granted


–



–Forfeited


(450,000
)


–Vested


(3,310,000
)


–Non-vested as of March 31, 2009


1,655,000


$
.11Granted


–



–Forfeited


–



–Vested


(1,655,000
)


.11Non-vested as of March 31, 2010


–


$
–
 
 During the year ended March 31, 2008, the Company granted options to purchase an aggregate of 5,415,000 shares of common stock to employees, directors and consultants for services to be provided. These options are exercisable at $0.20 per share, and vest one third on October 1, 2008, April 1, 2009 and October 1, 2009 with an expiration of three years from the date of grant for all options. The Company has valued these at their fair value on the date of grant using the Hull-White enhanced option-pricing model. During the years ended March 31, 2010 and 2009 the Company recognized expense of $201,299 and $358,362, respectively.
 F-29
 Table of Contents
 Index to Financial Statements
 The original unrecognized stock-based compensation expense related to the unvested options was approximately $610,548 and was recognized as expense over the vesting period of 18 months. This estimate is based on the number of unvested options currently outstanding and could change based on the number of options granted or forfeited in the future.  These options have no intrinsic value at March 31, 2010 or March 31, 2009.
  The assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates.
  The Company based its expected volatility on the historical volatility of similar companies with consideration given to the expected life of the award. The Company continued to consistently use this method until March 31, 2009 when it appeared that sufficient market acceptance of its stock and volume has reached a stable level.
  The risk-free interest rate used for each grant is equal to the U.S. Treasury yield in effect at the time of grant for instruments with a similar expected life.
 
 The expected term of options granted was determined based on the historical exercise behavior of similar peer groups.
  The Company has never declared or paid a cash dividend, and has no current plans to pay a cash dividend in the future.
  ASC 718-10 also requires that the Company recognize compensation expense for only the portions that are expected to vest. Therefore, the Company has estimated expected forfeitures of stock options with the adoption of ASC 718-10. In developing a forfeiture rate estimate, the Company considered its historical experience. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in future periods.
  The per share weighted average fair value of stock options granted for the fiscal year ended March 31, 2008 was $0.11.
  Note 16 - Earnings (Loss) Per Share
  Diluted income (loss) earnings per common share adjusts basic income (loss) per common share for the effects of convertible securities, stock options, warrants and other potentially dilutive financial instruments only in periods in which such effect is dilutive. No instruments were dilutive at March 31, 2010 or 2009.  The diluted income (loss) per common share excludes the dilutive effect of approximately 24,409,750 and 25,690,000 warrants and options at March 31, 2010 and 2009, respectively, since such warrants and options have an exercise price in excess of the average market value of the Company’s common stock during the respective periods.
 
 Note 17 – Segment Reporting
  Green Planet Group, Inc. has two reportable segments: the engine, fuel additives and green energy products and the industrial staffing segments.  The first segment is comprised of the XenTx Lubricants, EMTA Corp. and White Sands entities and the staffing segment is comprised of Lumea, Inc. and its operating subsidiaries. Prior to March 1, 2009, Green Planet Group, Inc. only had the first reporting segment of business.
  The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  Interest expense related to the individual entities is paid by or charged to those entities and the related debt is included as that entity’s liability. Green Planet management evaluates performance based on profit or loss before income taxes not including nonrecurring gains and losses.
 F-30
 Table of Contents
 Index to Financial Statements
 There have been no significant intersegment sales or costs.
  Green Planet’s business is conducted through separate legal entities that are wholly owned subsidiaries.  Each entity has a specific set of business objectives and line of business.
 
 The Company analyzes the result of the operations of the individual entities and the segments. Green Planet does not allocate income taxes and unusual items to the segments. The segment information for the year ended March 31, 2010 and March 31, 2009 are presented below.
 Additives &





Corporate2009

Green Energy


Staffing


& Eliminations


ConsolidatedIncome statement information:United States sales

$
2,348,053


$
5,784,408


$
–


$
8,132,461Foreign sales


1,038,333



–



–



1,038,333Gross sales


3,386,386



5,784,408



–



9,170,794Net sales


3,386,386



5,784,408



–



9,170,794Depreciation and amortization


244,259



64,574



–



308,833Interest (expense)/income


(218,519
)


(67,317
)


526,029



240,193Loss before income taxes


(1,263,515
)


(362,912
)


(1,069,850
)


(2,696,277
)Net loss


(1,263,515
)


(362,912
)


(1,069,850
)


(2,696,277
)Balance sheet information:Total net intangibles


506,889



3,238,136



–



3,745,025Total goodwill


–



8,979,822



–



8,979,822Total assets


4,146,987



13,729,688



3,888,367



21,765,042
 
  Additives &





Corporate2010

Green Energy


Staffing


& Eliminations


ConsolidatedIncome statement information:United States sales

$
1,165,747


$
56,214,920


$
–


$
57,380,667Gross sales


1,165,747



56,214,920



–



57,380,667Net sales


1,165,747



56,214,920



–



57,380,667Depreciation and amortization


358,581



710,197



–



1,068,778Allowance for doubtful accounts


758,726



724,524



–



1,483,250Impairment of goodwill


–



4,355,151



–



4,355,151Interest (expense)/income


(72,420
)


(1,811,864
)


(196,599)



(2,080,833
)Loss before income taxes


(1,312,941
)


(10,745,049
)


(3,616,966
)


(15,674,956
)Net loss


(1,312,941
)


(10,745,049
)


(3,616,966
)


(15,674,956
)Balance sheet information:Total net intangibles


380,166



2,844,358



–



3,224,358Total goodwill


–



4,624,671



–



4,624,671Total assets


2,341,217



8,905,518



3,888,367



15,135,102
  Note 18 – Subsequent Events
  Subsequent to March 31, 2010, the Company issued 1,578,947 shares of common stock in payment of interest and principal and 1,765,000 shares of common stock for consultant and employee compensation.  These transactions were valued at $31,579 and $25,300, respectively.
 
 F-31