SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 FORM
10-Q
 
 
 [X]      QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 FOR
THE QUARTERLY PERIOD ENDED:  September 30, 2009
 
 OR
 
 [
]      TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 FOR
THE TRANSITION PERIOD FROM  TO __________
 
 Commission
File Number 1-15497
 
 RecycleNet
Corporation
 (Exact
name of small business issuer in its charter)
 
 Utah
              
              87-0301924(State
      or other jurisdiction of

                  incorporation
      or organization)
              
              (IRS
      Employer Identification No.)
 
 175 East 400 South, Suite
900, Salt Lake City Utah, 84111
 (Address
of principal executive offices, including Zip Code)
 
 801-531-0404
 (Issuer's
telephone number)
 
 (Copies
to:)
 Steve
Taylor, 175 East 400 South, Suite 900 Salt Lake City, Utah,
84111              801
578-3283
 
 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  (
x )    No (  )
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company:
 Large
      Accelerated
    Filer   (    )
              Accelerated
      Filer (   )Non-Accelerated
      Filer     (    )
              Smaller
      Reporting Company ( x )
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act):    Yes
(  )   No  ( x )
 
 Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest applicable date:
 
 The
number of common shares outstanding at November 12,
2009:   86,757,421
 The
number of class N shares outstanding at   November 12,
2009:   50,000,000
  
 
 RECYCLENET
CORPORATION AND SUBSIDIARIES
 FORM
10-Q
 QUARTER
ENDED September 30, 2009
 
 TABLE
OF CONTENTS
 
 PagePART
      I – FINANCIAL INFORMATIONItem
      1.
              Financial
      StatementsCondensed
      Consolidated Balance Sheets September 30, 2009 and December 31, 2008
      (Unaudited)
              3Condensed
      Consolidated Statements of Operations for the Three and Nine Months Ended
      September 30, 2009 and 2008 (Unaudited)
              4Condensed
      Consolidated Statements of Cash Flows for the Nine Months Ended September
      30, 2009 and 2008 (Unaudited)
              5Notes
      to Condensed Consolidated Financial Statements (Unaudited)
              6Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              9Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              13Item
      4T.
              Controls
      and Procedures
              13PART
      II – OTHER INFORMATIONItem
      1.
              Legal
      Proceedings
              14Item
      1A.
              Risk
      Factors
              14Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              14Item
      3.
              Defaults
      Upon Senior Securities
              14Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              14Item
      5.
              Other
      Information
              15Item
      6.
              Exhibits
              15Signatures
              
              16
  
 
 PART
I – FINANCIAL INFORMATION
 
 ITEM
1.   FINANCIAL STATEMENTS
 
 RECYCLENET
      CORPORATION AND SUBSIDIARIESCONDENSED
      CONSOLIDATED BALANCE SHEETS(Unaudited)September
      30,
                
                
                December
      31,2009
                
                
                2008ASSETSCurrent
      AssetsCash
                
                $
                41,957
                
                
                $
                41,348Trade
      accounts receivable, net of allowance for bad debt of$0 and
      $2,500, respectively
                
                
                15,335
                
                
                
                13,213Prepaid
      expenses
                
                
                -
                
                
                
                6,061Total
      Current Assets
                
                
                57,292
                
                
                
                60,622Property
      and EquipmentEquipment
                
                
                21,422
                
                
                
                21,422Less:
      Accumulated depreciation
                
                
                (16,066
                )
                
                
                (12,853
                )Net
      Property and Equipment
                
                
                5,356
                
                
                
                8,569Related
      party receivable
                
                
                -
                
                
                
                160,892Total
      Assets
                
                $
                62,648
                
                
                $
                230,083LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      LiabilitiesRelated
      party accounts payable
                
                $
                -
                
                
                $
                8,702Accrued
      liabilities
                
                
                19,029
                
                
                
                29,494Deferred
      revenue
                
                
                54,810
                
                
                
                57,074Total
      Current Liabilities
                
                
                73,839
                
                
                
                95,270Stockholders'
      Equity (Deficit)Class
      N convertible shares $0.01 par value;
                    70,896,789 shares authorized; 56,800,000 and 56,800,000
      Class N shares issued and outstanding, respecitvely
                
                
                568,000
                
                
                
                568,000Common
      shares - $0.01 par value;
                    179,103,211 shares authorized;79,957,421 and 79,091,412 shares
      issued and oustanding, respectively
                
                
                799,574
                
                
                
                790,914Additional
      paid-in capital
                
                
                13,122
                
                
                
                4,462Accumulated
      deficit
                
                
                (1,391,887
                )
                
                
                (1,228,563
                )Total
      Stockholders' Equity (Deficit)
                
                
                (11,191
                )
                
                
                134,813Total
      Liabilities and Stockholders' Equity (Deficit)
                
                $
                62,648
                
                
                $
                230,083
 
 See the
accompanying notes to the condensed consolidated financial
statements.
  3
 RECYCLENET
      CORPORATION AND SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)For
      the Three Months
                
                
                For
      the Nine MonthsEnded
      September 30,
                
                
                Ended
      September 30,2009
                
                
                2008
                
                
                2009
                
                
                2008Sales
                
                $
                108,519
                
                
                $
                137,054
                
                
                $
                328,322
                
                
                $
                473,260Operating
      ExpensesSelling,
      general and administrative expenses
                
                
                92,391
                
                
                
                142,084
                
                
                
                321,172
                
                
                
                435,398Write-off
      of related party receivable
                
                
                3,602
                
                
                
                -
                
                
                
                170,474
                
                
                
                -Total
      Operating Expenses
                
                
                95,993
                
                
                
                142,084
                
                
                
                491,646
                
                
                
                435,398Net
      Income (Loss)
                
                $
                12,526
                
                
                $
                (5,030
                )
                
                $
                (163,324
                )
                
                $
                37,862Basic
      Income (Loss) Per Common Share
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Diluted
      Income (Loss) Per Common Share
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Basic
      Weighted-Average Common Shares Outstanding
                
                
                79,149,146
                
                
                
                79,091,412
                
                
                
                79,110,445
                
                
                
                79,091,412Diluted
      Weighted-Average Common Shares Outstanding
                
                
                135,949,146
                
                
                
                79,091,412
                
                
                
                79,110,445
                
                
                
                135,891,412
 
 
 See the
accompanying notes to the condensed consolidated financial
statements.
  4
 RECYCLENET
      CORPORATION AND SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)For
      the Nine Months Ended September 30,
                
                2009
                
                
                2008Cash
      Flows From Operating Activities:Net
      income (loss)
                
                $
                (163,324
                )
                
                $
                37,862Adjustments
      to reconcile net income (loss) to net cash provided
      by operating activities:Depreciation
                
                
                3,213
                
                
                
                3,214Write-off
      of related party receivable
                
                
                170,474
                
                
                
                -Changes
      in assets and liabilities:Accounts
      and other receivables
                
                
                (2,122
                )
                
                
                (1,452
                )Prepaid
      expenses
                
                
                6,061
                
                
                
                1,294Accrued
      liabilities and accounts payable
                
                
                (1,847
                )
                
                
                (17,527
                )Deferred
      revenue
                
                
                (2,264
                )
                
                
                (16,707
                )Net
      Cash Provided By Operating Activities
                
                
                10,191
                
                
                
                6,684Cash
      Flows From Investing Activities:Advances
      to related party
                
                
                (9,582
                )
                
                
                (7,995
                )Net
      Cash Used In Investing Activities
                
                
                (9,582
                )
                
                
                (7,995
                )Cash
      Flows From Financing Activities
                
                
                -
                
                
                
                -Net
      Change in Cash
                
                
                609
                
                
                
                (1,311
                )Cash
      at Beginning of Period
                
                
                41,348
                
                
                
                52,364Cash
      at End of Period
                
                $
                41,957
                
                
                $
                51,053Non-Cash
      Investing and Financing Activities:Issuance
      of common stock through conversion of accrued liabilities
                
                $
                17,320
                
                
                $
                -
 
 See the
accompanying notes to the condensed consolidated financial
statements.
  5
  RECYCLENET
CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 NOTE
1–ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 
 Consolidation - The
accompanying consolidated financial statements include the accounts of
RecycleNet Corporation and its wholly owned subsidiaries Scrap.Net, Inc.,
Waste.Net, Inc. and Recycle West Network. Inter-company accounts and
transactions have been eliminated in consolidation.
 
 Business Condition and
Re-Organization - Due to the current economic downturn, the Company feels
that the economy will not recover fast enough for the core operations of the
business to be sustainable as a going concern.   Since the fall
of 2008, the Company has seen numerous of its customers closing their businesses
or declaring bankruptcy.  With the erosion of its customer base, the
Company feels that the economic turnaround will not occur quickly enough to
sustain the core operations of the business.  Management has taken
extreme measures to reduce costs since late 2008 in the attempt to maintain the
Company.  Richard Ivanovick, Chief Financial Officer and Director of
the Company has waived his consulting fees since April 1, 2009 and Paul Roszel,
President, Chief Executive Officer and the Chairman of the Board of Directors of
the Company has taken a 25% reduction in compensation since April 1,
2009.   As well, all other expenses have been reviewed and
reduced to the barest minimum.   At this time, management
believes that there are no longer any additional reductions that can be made to
sustain the core operations of the business as a going concern.
 
 On
September 24, 2009 the Board of Directors initiated a reorganization of the
Company.   This reorganization does not constitute a change of
control, and is pending shareholder approval at the Annual Meeting to be held on
November 25, 2009.
  The
reorganization includes:
 ·
              The
      centralization of all of the Company’s recycling operations and websites
      into Scrap.Net Inc, a wholly owned subsidiary of the
    Company.
 ·
              The
      divestiture of all of the operations of the Company through the sale of
      Scrap.Net Inc. to Inter-Continental Recycling Inc, the majority
      shareholder of the Company and an entity controlled by Mr. Paul
      Roszel.  Inter-Continental Recycling Inc owns all of the
      Company’s issued and outstanding Class “N” shares and proposes exchanging
      all of these shares for Scrap.Net
Inc.
 ·
              A
      10:1 reverse split of the common stock of the Company to decrease the
      number of issued and outstanding common
shares.
 ·
              A
      corporate name change to Maydao
Corporation.
 
 Basis of Presentation - The
accompanying condensed consolidated financial statements have been prepared by
RecycleNet Corporation and are unaudited.  In the opinion of
management, the accompanying unaudited financial statements contain all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation in accordance with accounting principles generally accepted in
the United States of America.  The Company has evaluated subsequent
events through November 12, 2009, which is the date these financial statements
were issued.
  The
accompanying unaudited interim financial statements have been condensed pursuant
to the rules and regulations of the Securities and Exchange Commission;
therefore, certain information and disclosures generally included in financial
statements have been condensed or omitted. These financial statements should be
read in conjunction with the Company's annual financial statements included in
the Company's annual report on Form 10-K as of December 31, 2008. The financial
position and results of operations of the interim periods presented are not
necessarily indicative of the results to be expected for the year ended December
31, 2009.
 
 Recent Accounting
Pronouncements-Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, “Generally Accepted
Accounting Principles.” ASC 105-10 establishes the FASB Accounting Standards
CodificationTM (“Codification”) as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with GAAP for SEC
registrants. All guidance contained in the Codification carries an equal level
of authority. The Codification supersedes all existing non-SEC accounting and
reporting standards. The FASB will now issue new standards in the form of
Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as
authoritative in their own right. ASUs will serve only to update the
Codification, provide background information about the guidance and provide the
bases for conclusions on the changes in the Codification. References made to
FASB guidance have been updated for the Codification throughout this
document.
  6
 
 Effective
June 30, 2009, the Company adopted guidance issued by the FASB and included
in ASC 855-10, “Subsequent Events,” which establishes general standards of
accounting for and disclosures of events that occur after the balance sheet date
but before the financial statements are issued or are available to be issued. It
requires the disclosure of the date through which an entity has evaluated
subsequent events (see Note 1).
 
 Effective
April 1, 2009, the Company adopted guidance issued by the FASB that
requires disclosure about the fair value of financial instruments for interim
financial statements of publicly traded companies, which is included in the
Codification in ASC 825-10-65, “Financial Instruments.” The adoption of ASC
825-10-65 did not have an impact on our consolidated results of operations or
financial condition.
 
 Effective
January 1, 2009, the Company adopted guidance issued by the FASB that
relates to the presentation and accounting for noncontrolling interests, which
is included in the Codification in ASC 810-10-65,
“Consolidation.”  The adoption of ASC 810-10-65 did not have an impact
on our consolidated results of operations or financial condition.
 
 Effective
January 1, 2008, the Company adopted ASC 820-10, “Fair Value Measurements
and Disclosures,” with respect to recurring financial assets and liabilities.
The Company adopted ASC 820-10 on January 1, 2009, as it relates to
nonrecurring fair value measurement requirements for nonfinancial assets and
liabilities. ASC 820-10 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. The adoption of the standard had no
impact on our consolidated financial results.
 
 NOTE
2–RELATED PARTY TRANSACTIONS
 
 Related Party Receivable — As of September 30, 2009,
the Company had advanced $170,474 to Scrap China Corporation, a related party
through common ownership of the majority shareholder.  This resulted
from expenses incurred for travel, management and legal and accounting expenses
paid on behalf of Scrap China Corporation.  These advances are due on
demand and bear no interest. During the nine months ended September 30, 2009,
the Company wrote off the balance of the related party receivable of $170,474,
resulting in a zero balance of the receivable as of September 30,
2009.  Scrap China’s operations have not materialized as planned, and
therefore, the management has classified the loan receivable as uncollectible as
of September 30, 2009.
 
 Service Agreements — The Company has an agreement
with Inter-Continental Recycling, Inc. and its wholly owned subsidiary Cooksmill
NetSystems, Inc. to provide various services for the Company. Inter-Continental
Recycling, Inc., and as such Cooksmill NetSystems, Inc., is 100% owned by the
immediate family of the President of the Company.  The Company is
billed monthly for services supplied for management and sales activities, which
vary monthly based on the activity level. The charges for these services for the
nine months ended September 30, 2009 and 2008 were $175,108 and $172,390,
respectively.
 
 Cooksmill
NetSystems Inc. provides Rhodium Webweaver Services (ISP) to the Company for
website management and the fees for this service are billed to the Company on a
monthly basis. The Rhodium Webweaver Services (ISP) charges for each of the nine
months ended September 30, 2009 and 2008 were $18,000 and $18,000
respectively.
 
 All
management and staff are retained on an unwritten contract basis under a related
party transaction with Inter-Continental Recycling, Inc. Because of the
affiliation between Inter-Continental and the Company, the agreement between
them has no definite duration and will continue as necessary for the conduct of
business by the Company. Inter-Continental assigns and provides employees to the
Company as long as the Company requires them and can pay the associated costs.
There is no mark-up or other charge incurred by the Company from
Inter-Continental and the Company pays the same amount for services provided by
the Inter-Continental employees, as does Inter-Continental. The management/staff
charges for the nine months ended September 30, 2009 and 2008 were $157,064 and
$147,670, respectively.
  7
 
 Inter-Continental
Recycling, Inc. and the Company are also engaged in a merchant services
agreement. On behalf of Inter-Continental Recycling, Inc. the Company operates,
maintains, bills and collects payments for services offered on web sites owned
by Inter-Continental Recycling, Inc.  The Company then issues payment
to Inter-Continental Recycling, Inc. for an agreed upon rate.  The
commissions paid recorded by the Company for this merchant service agreement
with Inter-Continental Recycling, Inc. for the nine months ending September 30,
2009 and 2008 were $44 and $6,720, respectively.
 
 The
Company engaged in an affiliate marketing agreement with Cooksmill NetSystems,
Inc. on January 1, 2008.  Through this affiliate marketing agreement,
Cooksmill NetSystems, Inc. pays the Company (the “Affiliate”) a commission on
net Pay-Per-Lead sales generated by customers referred by the Company’s web
sites.
 
 The
Company has office space in a facility owned by the President of the Company.
For the nine months ended September 30, 2009 and 2008, rent expense was $1,800
and $1,800, respectively.
 
 NOTE
3–STOCKHOLDERS’ EQUITY
 
 The
Company is authorized to issue 250,000,000 common shares with a par value of
$0.01 per share. The Board of Directors is authorized to designate one or more
series within the class of common shares and to designate relative preferences,
limitations and rights. The Board has designated 70,896,789 common shares as
Class N shares. The Class N shares have voting rights of one vote per share and
have no right, preference or ability to share in the net assets of the
corporation upon dissolution.  The Class N shares are directly
convertible to common shares on a one for one basis, solely at the option of the
holders. At September 30, 2009, there were 56,800,000 Class N shares
outstanding.
 
 On
September 24, 2009, the Board of Directors issued Richard Ivanovick, the Chief
Financial Officer of the Company, “restricted” common shares in exchange for the
amount owing for management and professional services rendered by Mr. Ivanovick
from October 1, 2008 to March 31, 2009.  These services had been
accrued by the Company as a liability in the amount of $17,320. The number of
shares to be issued to Mr. Ivanovick was calculated based on the market ask
price on September 24, 2009 and 866,009 shares of common stock were
issued.
 
 On
October 16, 2009, a shareholder converted 6,800,000 Class N shares into
6,800,000 common shares of RecycleNet Corporation.
 
 As of
October 16, 2009 there are 86,757,421 issued and outstanding common shares and
50,000,000 issued and outstanding Class N shares.
 
 NOTE
4–BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE
 
 Basic
income (loss) per common share is calculated by dividing net income (loss) by
the weighted-average number of common shares outstanding. Diluted income (loss)
per common share is calculated by dividing net income (loss) by the
weighted-average number of Class N shares and common shares outstanding to give
effect to potentially issuable common shares, except during loss periods when
those potentially issuable shares are anti-dilutive.  The shares used
in the computation of basic and diluted income (loss) per common share for the
three and nine months ended September 30, 2009 and 2008 are reconciled as
follows:
  For
      the Three Months Ended
                
                
                For
      the Nine Months EndedSeptember
      30,
                
                
                September
      30,2009
                
                
                2008
                
                
                2009
                
                
                2008Weighted-average
      number of common shares used in basicincome
      (loss) per common share calculation
                
                
                79,149,146
                
                
                
                79,091,412
                
                
                
                79,110,445
                
                
                
                79,091,412Incremental
      potentially issuable common shares from assumedconversion
      of Class N common shares
                
                
                56,800,000
                
                
                
                -
                
                
                
                -
                
                
                
                56,800,000Weighted-average
      number of common shares and dilutivepotential
      common shares used in diluted income (loss) percommon
      share calculation
                
                
                135,949,146
                
                
                
                79,091,412
                
                
                
                79,110,445
                
                
                
                135,891,412
  8
 
 ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 
 Cautionary Statement
Regarding Forward-Looking Statements
 
 Certain
statements contained in this Section and elsewhere in this Form 10-Q regarding
matters that are not historical facts are forward-looking statements (as such
term is defined in the Private Securities Litigation Reform Act of
1995).  Because such forward-looking statements include risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. All statements that address
operating performance, events or developments that management expects or
anticipates to occur in the future, including statements relating to sales and
earnings growth or statements expressing general optimism about future operating
results, are forward-looking statements. The forward-looking statements are
based on management's current views and assumptions regarding future events and
operating performance. Many factors could cause actual results to differ
materially from estimates contained in management's forward-looking
statements.  The differences may be caused by a variety of factors,
including but not limited to adverse economic conditions, competitive pressures,
inadequate capital, unexpected costs, lower revenues, net income and forecasts,
the possibility of fluctuation and volatility of our operating results and
financial condition, inability to carry out marketing and sales plans and loss
of key executives, among other things.
 
 Overview
 
 The
following discussion of the financial condition and results of operations of the
Company should be read in conjunction with the financial statements and notes
related thereto, included elsewhere in this report.
 
 RecycleNet
Corporation provides "Global Access to Recycling Markets" (GARM) through
Internet portals that facilitate e-commerce trading.
 
 Business Condition - Due to
the current economic downturn, the Company feels that the economy will not
recover fast enough for the core operations of the business to be sustainable as
an ongoing concern.   Since the fall of 2008 the Company has seen
numerous of it customers closing their businesses or declaring
bankruptcy.  With the erosion of its customer base, the Company feels
that the economic turnaround will not occur quickly enough to sustain the core
operations of the business.  Management has taken extreme measures to
reduce costs since late 2008 in the attempt to maintain the
Company.  Richard Ivanovick, Chief Financial Officer and Director of
the Company has waived his consulting fees since April 1, 2009 and Paul Roszel,
President, Chief Executive Officer and the Chairman of the Board of Directors of
the Company has taken a 25% reduction in compensation since April 1,
2009.   As well, all other expenses have been reviewed and
reduced to the barest minimum.   At this time, management
believes that there are no longer any additional reductions that can be made to
sustain the core operations of the business as an ongoing concern.
 
 Re-Organization - On September
24, 2009 the Board of Directors initiated a reorganization of the
Company.   This reorganization does not constitute a change of
control, and is pending shareholder approval at the Annual Meeting to be held on
November 25, 2009.
  The
reorganization includes:
 ·
              The
      centralization of all of the Company’s recycling operations and websites
      into Scrap.Net Inc, a wholly owned subsidiary of the
    Company.
 ·
              The
      divestiture of all of the operations of the Company through the sale of
      Scrap.Net Inc. to Inter-Continental Recycling,
  Inc.
 ·
              A
      10:1 reverse split of the common stock of the Company to decrease the
      number of issued and outstanding common
shares
 ·
              A
      corporate name change to Maydao
Corporation.
 
 Centralization of Recycling
Operations – At September 30, 2009 all of the recycling operations and
websites were moved to Scrap.Net Inc., a wholly owned subsidiary of RecycleNet
Corporation.
  9
 
 Divestiture of Operations -
Following the centralization of all the Company’s operations and assets into
Scrap.Net Inc., the largest single asset of the Company would be as a shell
company available for a merger or acquisition.   This would allow
the shareholders to retain value in their shares.   If the
Company continues its operations it will be forced to go “dark” and the
shareholders will lose this value.
 
 Inter-Continental
Recycling, Inc., the majority shareholder of the Company, an entity controlled
by Mr. Paul Roszel, the President and Chief Executive Officer and the Chairman
of the Board of Directors of the Company and his immediate family, have
submitted a proposal to acquire all of the outstanding shares of the Company’s
wholly owned subsidiary Scrap.Net Inc by a share
exchange.  Inter-Continental Recycling, Inc. will acquire 100% of the
issued and outstanding common shares of Scrap.Net Inc in exchange for all of the
issued and outstanding Class “N” shares of RecycleNet Corporation owned by
Inter-Continental Recycling Inc.
 
 The
original recycling operations of the Company were acquired from
Inter-Continental Recycling, Inc. in exchange for the issuance of Class “N”
shares of the Company.  The Class “N” shares are voting, non-equity
shares that can be directly converted to common shares on a one for one
basis.   Inter-Continental Recycling, Inc. proposes to take back
the recycling operations in exchange for all of the issued and outstanding Class
“N” shares of RecycleNet Corporation owned by Inter-Continental Recycling
Inc.
 
 The
divestiture of Scrap.Net Inc. will discontinue all of the operations within
RecycleNet Corporation.
 
 If the
shareholders approve this proposal, when this transaction is complete all of the
Class “N” shares will be redeemed and cancelled resulting in the retirement of
all of the Class “N” shares.
  Class
      "N" Shares
                
                Balance
                
                
                Balance
      after Sale ofScrap.NetOctober
      16, 2009
                
                
                (if
      approved by shareholders)Authorized
                
                70,896,789
                
                
                0Issued
      and Outstanding
                
                50,000,000
                
                
                0Authorized
      and Reserved for Issuance
                
                0
                
                
                0Authorized
      but Unissued
                
                20,896,789
                
                
                0
  As
Inter-Continental Recycling, Inc. is an entity controlled by Mr. Paul Roszel,
the President and Chief Executive Officer and the Chairman of the Board of
Directors of the Company and his immediate family, there is a conflict of
interest for the board of directors to express an opinion on the fairness of
this proposal.  There are no negotiations being done by the board of
directors and no unrelated third party has been asked for an
opinion.  The proposal from Inter-Continental Recycling, Inc. on its
acquisition of Scrap.Net Inc. is being directly referred to the shareholders for
vote.   Inter-Continental Recycling, Inc., Paul Roszel and his
immediate family, as the related parties, will withhold their votes from this
proposal, allowing the minority shareholders to vote on this
matter.
 
 If this
proposal from Inter-Continental Recycling, Inc. is approved by the shareholders
there will be no material assets or liabilities remaining within the Company,
there will no longer be any special class, Class “N” shares, and the Company
will discontinue its operations.    If the shareholders
approve the sale of Scrap.Net Inc this will divest RecycleNet Corporation of all
of its operations, will discontinue the ongoing losses incurred by these
operations,  and the Company will be re-classified as a “shell”
company.
 
 The
shareholders of the Company will not receive any consideration as a result of
the sale.  The impact of the sale on the ownership of the Company will
be through the retirement of the Class “N” shares.  On a fully diluted
basis the issued and outstanding shares of the Company will be reduced from
136,757,421 shares to 86,757,421 shares.
  10
 
 Reverse Split of Stock - As a
result of the divestiture of all of its operations of the Company, upon approval
by the shareholders at the annual meeting to be held on November 25, 2009, the
Company will become a fully reporting, publicly traded corporate
shell.
 
 In order
to groom the corporate shell to make it attractive for potential transactions
including, but not limited to, financings, corporate merger or acquisition, the
Board of Directors strongly believes a reduction of the issued and outstanding
common shares is necessary.
 
 At this
time the Company has not entered into any potential transactions related to
financings, corporate merger or acquisition.
 
 The
reverse stock split will not change the number of authorized shares of the
Company’s common stock. Therefore, because the number of issued and outstanding
shares of the Company’s common stock would decrease, the number of shares
remaining available for issuance would increase.
 
 The Board
of Directors is submitting for vote of approval from the shareholders at the
annual meeting to be held on November 25, 2009, the reverse split of the common
stock of the Company on a 10:1 basis (for each ten common shares of the Company
held by a shareholder the shareholder will receive one common share of the
reorganized Company).  Fractional shares if any, based upon the
foregoing ratio shall be rounded up to a whole share for fractions in excess of
50% and shall be rounded down for fractions of 50% or less.   For
shareholders holding less than 10 common shares the same treatment will apply; 6
or more shares will be issued 1 (one) share of the reorganized Company, 5 or
less shares will be rounded down to 0 (zero) shares after completion of the
reverse split.
 
 If
approved by the shareholders, the reverse stock split will take effect at the
close of business on the date of the Annual Meeting of November 25,
2009.
  Name Change of the Company -
Inter-Continental Recycling, Inc. has submitted a proposal to purchase Scrap.Net
Inc. by a share exchange, as described above.  If the shareholders of
the Company approve the sale of Scrap.Net Inc, at the Annual Meeting to be held
on November 25, 2009, the Company will no longer have any recycling
operations.  To alleviate any confusion between the remaining “shell”
company and the divested operations, management proposes to change the name of
the Company from RecycleNet Corporation to “Maydao Corporation”.
 
 Liquidity
and Capital Resources
 September 30,
              
              
              December 31,2009
              
              
              2008Cash
      on Hand
              
              $
              41,900
              
              
              $
              41,300
 
 The world
economy has experienced a slowdown of activity during 2008 and 2009 and
RecycleNet has also experienced this same reduced activity. However, in spite of
this erosion of business, the management of RecycleNet has successfully
maintained the Company’s current cash position of $41,900, a small increase of
$600 from the year ended December 31, 2008 balance of $41,300.
 
 Results of
Operations
 
 Sales
Revenues
 Three
      Months Ended
              
              
              Nine
      Months EndedSeptember 30,
              
              
              September 30,2009
              
              
              2008
              
              
              2009
              
              
              2008Sales
      Revenues
              
              $
              108,500
              
              
              $
              137,000
              
              
              $
              328,300
              
              
              $
              473,300
 
 Sales
recorded in the third quarter of 2009 of $108,500 were $28,500 less than the
similar period of 2008 while sales similarly decreased by $145,000 during the
first nine months of 2009 compared to the 2008 revenue of $473,300, a 30.6%
decrease.
  The type
of revenue now being realized from sales activities in the Internet business is
changing quickly from monthly billing for memberships and advertising to “usage
credits” based on delivered performance on web site
visits.  Management has been forced to adjust to this dynamic change
in the type of revenue the Company is receiving for its
services.
  11
 
 Due to
the current economic downturn, the Company feels that the economy will not
recover fast enough for the core operations of the business to be sustainable as
a going concern.   Since the fall of 2008 the Company has seen
numerous customers close their businesses or declare bankruptcy.  With
the erosion of its customer base, the Company feels that the economic turnaround
will not occur quickly enough to sustain the core operations of the
business
 
 On
September 24, 2009 the Board of Directors initiated a reorganization of the
Company.  The re-organization started with the centralization of all
of the Company’s recycling operations and websites into Scrap.Net Inc, a wholly
owned subsidiary of the Company.  As at September 30, 2009 all of the
recycling operations and websites were moved to Scrap.Net Inc., a wholly owned
subsidiary of RecycleNet Corporation.
  Operating
Expenses
 Three
      Months Ended
              
              
              Nine
      Months EndedSeptember 30,
              
              
              September 30,2009
              
              
              2008
              
              
              2009
              
              
              2008Operating
      Expenses
              
              $
              96,000
              
              
              $
              142,100
              
              
              $
              492,000
              
              
              $
              435,400
  Expenses
in the third quarter decreased by $46,100 compared to the similar quarter in
2008, however, for the nine months ended September 30, 2009 expenses increased
by $56,600 compared to the 2008 period.
 
 During
the nine months ended September 30, 2009, the Company wrote off the balance of
the Scrap China Corporation related party receivable of $170,000.
 
 Reduction
during the first nine months of sales commissions by $7,200, office and
administration by $48,500, bank interest by $1,900, telephone expenses by
$1,800, professional fees by $12,700, and advertising/promotion/travel by
$48,400 accounted for the largest savings.
 
 Management
has taken extreme measures to reduce costs since late 2008 in the attempt to
maintain the Company.  Richard Ivanovick, Chief Financial Officer and
Director of the Company has waived his consulting fees since April 1, 2009 and
Paul Roszel, President, Chief Executive Officer and the Chairman of the Board of
Directors of the Company has taken a 25% reduction in compensation since April
1, 2009.   As well, all other expenses have been reviewed and
reduced to the barest minimum.   At this time, management
believes that there are no longer any additional reductions that can be made to
sustain the core operations of the business as a going concern.
  Net
Income (Loss)
 Three
      Months Ended
              
              
              Nine
      Months EndedSeptember 30,
              
              
              September 30,2009
              
              
              2008
              
              
              2009
              
              
              2008Net
      Income (Loss)
              
              $
              12,500
              
              
              $
              (5,000
              )
              
              $
              (163,300
              )
              
              $
              37,900
 
 Though a
profit was recorded for the third quarter of 2009 of $12,500, year to date the
Company has recorded a net loss of $163,300 compared to the $37,900 net income
recorded in the same period of 2008.
  As
discussed above, sales have deteriorated by $145,000 during the first nine
months of 2009.  Management responded in as timely a fashion as it
could to reduce expenses for the same period by $56,600.
 
 However,
even with the extreme measures taken to reduce costs the Company feels that the
economy will not recover fast enough for the core operations of the business to
be sustainable as a going concern.  A proposal has been accepted by
the Board of Directors and will be submitted to the shareholders of the Company
to vote on at the Annual Meeting to be held on November 25, 2009, that
Inter-Continental Recycling Inc will acquire all of the outstanding shares of
the Company’s wholly owned subsidiary Scrap.Net Inc by a share
exchange.  Inter-Continental Recycling Inc. will acquire 100% of the
issued and outstanding common shares of Scrap.Net Inc in exchange for all of the
issued and outstanding Class “N” shares of RecycleNet Corporation owned by
Inter-Continental Recycling Inc.
 
 If this
proposal from Inter-Continental Recycling, Inc. is approved by the shareholders
there will be no material assets or liabilities remaining within the Company,
there will no longer be any special class, Class “N” shares, and the Company
will discontinue its operations.
  12
 
 Deferred
Revenue
 September 30,
              
              
              December 31,2009
              
              
              2008Deferred
      Revenue
              
              $
              54,800
              
              
              $
              57,100
 
 Deferred
revenue results from RecycleNet customers who pay for their service purchases in
advance, such as quarterly, semi-annually, or annually. RecycleNet records the
initial payment in deferred revenue and then recognizes in each subsequent month
that portion which is provided in services. As of September 30, 2009, deferred
revenue of $54,800 has decreased compared to the December 31, 2008 balance of
$57,100.
 
 With the
re-organization and centralization of all of the Company’s recycling operations
and websites into Scrap.Net Inc, a wholly owned subsidiary of the Company, the
balance of deferred revenue as of September 30, 2009 was moved to Scrap.Net
Inc.
  Off
Balance Sheet Arrangements
  None
 
 ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
 
 As a
“smaller reporting company” (as defined by Item 10 of Regulation S-K), the
Company is not required to provide information required by this Item, as defined
by Regulation S-K Item 305(e).
 
 ITEM
4T. CONTROLS AND PROCEDURES
  Evaluation of Disclosure
Controls:We
evaluated the effectiveness of the design and operation of our “disclosure
controls and procedures” as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the
period covered by this report. This evaluation (the “disclosure controls
evaluation”) was done under the supervision and with the participation of
management, including our Chief Executive Officer (“CEO”) and Chief Financial
Officer (“CFO”). Rules adopted by the SEC require that in this section of our
Quarterly Report on Form 10-Q we present the conclusions of the CEO and the CFO
about the effectiveness of our disclosure controls and procedures as of the end
of the period covered by this report based on the disclosure controls
evaluation.
  Objective of Controls: Our
disclosure controls and procedures are designed so that information required to
be disclosed in our reports filed or submitted under the Exchange Act, such as
this Quarterly Report on Form 10-Q, is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms. Our
disclosure controls and procedures are also intended to ensure that such
information is accumulated and communicated to our management, including the CEO
and CFO, as appropriate to allow timely decisions regarding required disclosure.
There are inherent limitations to the effectiveness of any system of disclosure
controls and procedures, including the possibility of human error and the
circumvention or overriding of the controls and procedures. Accordingly, even
effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives, and management necessarily is
required to use its judgment in evaluating the cost-benefit relationship of
possible disclosure controls and procedures.
  Conclusion: Based upon the
disclosure controls evaluation, our CEO and CFO have concluded that as of the
end of the period covered by this report, our disclosure controls and procedures
were effective to provide reasonable assurance that the foregoing objectives are
achieved.
  Changes in Internal Control over
Financial Reporting: There were no changes in our internal control over
financial reporting during the quarter ended September 30, 2009, that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
  13
  PART
II – OTHER INFORMATION
 
 ITEM
1.  LEGAL PROCEEDINGS
 
 None
 
 ITEM
1A.  RISK FACTORS
 
 As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.
 
 ITEM
2. UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 None
 
 ITEM
3.  DEFAULTS UPON SENIOR SECURITIES
 
 None
 
 ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 The
Annual Meeting (“Meeting”) of shareholders of RECYCLENET CORPORATION (“Company”)
will be held at the office of Hertzberger, Olsen and Associates located at
Corporate Square, Penthouse, 30 Duke St. W., Kitchener, Ontario, Canada, N2H 3W5
on Wednesday, November 25, 2009, commencing at 10:00 o’clock a.m., EST for the
following purposes:
 
 1.
              To
      elect three directors of the
Company.
 
 2.
              To
      ratify the appointment of the Company's independent
    auditors.
 
 3.
              To
      approve the sale of Scrap.Net Inc., a wholly owned subsidiary of
      RecycleNet Corporation, to Inter-Continental Recycling Inc.
                If
      the shareholders approve Proposal Number 3, then the Company will proceed
      with Proposal Number 4 and Proposal Number 5.
                Proposal
      Number 4 and Proposal Number 5 are conditional on shareholders approval of
      Proposal Number 3.  If the shareholders do not approve Proposal
      Number 3, then Proposal Number 4 and Proposal Number 5 will be
      abandoned.
 
 4.
              To
      approve a reverse split of the common stock of the Company on a one for
      ten basis (for each ten common shares of the Company held by a shareholder
      the shareholder will receive one common share of the reorganized
      Company).
 
 5.
              To
      approve the Company name change from “RecycleNet Corporation” to “Maydao
      Corporation”.
 
 6.
              To
      transact such other business as may properly come before the
      meeting.
 
 The Board
of Directors has fixed the close of business on October 28, 2009, as the record
date for the determination of shareholders entitled to notice of the
Meeting.  All shareholders of record at close of business on that date
will be entitled to vote at the Meeting.
  14
 
 ITEM
5.                                                                                                          OTHER
INFORMATION
 
 None
 
 ITEM
6. EXHIBITS
 
 INDEX
TO EXHIBITS
 
 Exhibit
              Description2
              Stock
      Exchange Agreement as an exhibit to Form 10-SB are hereby incorporated by
      reference.  Filed on April 4, 2001.3.1
              Articles
      of Incorporation filed as an exhibit to Form 10-SB are hereby incorporated
      by reference. Filed on December 8, 1999.3.2
              By-laws
      filed as an exhibit to Form 10-SB, Amendment No. 5 are hereby incorporated
      by reference. Filed on March 7, 2000.10
              Material
      Contracts(a)  Agreement
      between RecycleNet Corporation and Paul Roszel as an exhibit to Form
      10-SB, Amendment No. 6 are hereby incorporated by reference. Filed on
      April 12, 2001.(b)  Agreement
      between RecycleNet Corporation and fiberglass.com, Inc. as an exhibit to
      Form 10-SB, Amendment No. 6 are hereby incorporated by reference. Filed on
      April 12, 2001.(c)   Agreement
      between RecycleNet Corporation and metalworld.com, inc. as an exhibit to
      Form 10-KSB hereby incorporated by reference.  Filed on April
      16, 200131.1
              Chief
      Executive Officer Certification under Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
              Chief
      Financial Officer Certification under Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
              Chief
      Executive Officer Certification under Section 906 of the Sarbanes-Oxley
      Act of 2002.32.2
              Chief
      Financial Officer Certification under Section 906 of the Sarbanes-Oxley
      Act of 2002.
 
 Reports
on Form 8-K
 
 Filed
September 28, 2009
 
 Item
5.02 Election of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
 
 At a
board meeting held on September 24, 2009 the Board of Directors accepted the
resignation of Keith A. Deck, a director of the Company. Mr. Deck resigned from
the Board for personal reasons and not because of any disagreements with
Management.
 
 The
remaining members of the Board of Directors duly appointed James P. Roszel to
fill the vacancy created by Mr. Deck’s resignation. James Roszel is the son of
Paul Roszel, the President and Chief Executive Officer of the
Company.
 
 For the
past eight years James Roszel has been responsible for the ongoing marketing and
business development of RecycleNet Corporation. James Roszel has been the
President and a Director of Oldwebsites.com Inc. (formerly Fiberglass.com, Inc.)
since its inception.
  15
 
 SIGNATURES
 
 
 Pursuant
to the requirements of the Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 
 RecycleNet
      CorporationNovember
      12, 2009
              /s/
      Paul RoszelPaul
      Roszel, President and Chairman of the Board
      of  DirectorsNovember
      12, 2009
              /s/
      Richard IvanovickRichard
      Ivanovick, C.A., Chief Financial and Accounting
  Officer
 
 
 
 16