U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-K





(Mark
One)





x ANNUAL REPORT UNDER
SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For the
fiscal year ended December 31, 2009





 ̈ TRANSITION REPORT UNDER
SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For the
transition period from ______________ to ______________





Commission
File Number 000-50944







GLOBAL
RESOURCE CORPORATION


(Exact
name of registrant as specified in its charter)







Nevada
              
              84-1565820(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)





9400
Globe Center Drive


Suite
101


Morrisville,
NC 27560





(Address
of principal executive offices)





(856)
767-5665





(Registrant’s
telephone number, including area code)









Securities
registered under Section 12(b) of the Exchange Act:





None.





Securities
registered under Section 12(g) of the Exchange Act:





Common
Stock, $0.001 par value per share





(Title of
Class)




Check
whether the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. Yes  ̈ No x





Check
whether the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. Yes  ̈ No x





Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes  ̈ No x





Check
whether the registrant has submitted electronically and posted on its corporate
website, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes  ̈ No  ̈





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure
will 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. x





Check
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):





Large Accelerated Filer  ̈
              Accelerated Filer  ̈Non-accelerated Filer  ̈
              Smaller Reporting Company x(Do not check if a smaller reporting company.)





Check
whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes  ̈ No
x





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates as of December 31, 2009 was approximately
$36,957,211.




APPLICABLE
ONLY TO CORPORATE REGISTRANTS





As of
December 27, 2010, there were 81,165,217 shares of common stock, par value
$.001 per share, outstanding.





FORWARD-LOOKING
STATEMENTS





Certain
statements made in this Annual Report on Form 10-K are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations.
Such statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of Global Resource
Corporation (the “Company”) to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. The Company's plans
and objectives are based, in part, on assumptions involving the continued
expansion of business. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Annual Report will prove to be accurate. In light of
the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.




2




PART
I




Item
1. Description of Business.




Overview





Global Resource Corporation (“we”,
“us”, “our”, or the "Company") was incorporated in the State of Nevada on June
17, 2002 under the name Mariner Health Care, Inc. On August 14, 2002, the
Company filed Articles of Merger with the State of Nevada pursuant to which
Email Mortgage.com, Inc., a New Jersey corporation, was merged with and into the
Company. On July 28, 2002, the Company amended its articles of incorporation to
change its name to Advanced Healthcare Technologies, Inc. On September 2, 2004,
the Company amended its articles changing its name to Global Resource
Corporation. The Company is a development stage company with a business plan
that includes researching, developing and marketing the business of decomposing
petroleum-based materials by subjecting them to a fixed-frequency microwave
radiation (the “Technology”) at specifically selected frequencies for a time
sufficient to at least partially decompose the materials, converting the
materials into hydrocarbons and fossil fuels from sources such as tires, oil
shale, capped wells, shale deposits and waste oil streams.





The
Company’s business goals for exploitation of the Technology are as
follows:





1)
            The
      design, manufacture and sale of machinery and equipment units embodying
      the Technology.


2)
            The
      ownership and operation of plants to use the Technology in conjunction
      with other investors.


3)
            The
      formation of joint-venture and licensing relationships with established
      companies for exploitation of the
Technology.





Currently,
our efforts are directed principally to the design, manufacture of machinery and
equipment as well as the licensing of the Technology.  Under the
Company’s current strategy, the Company’s revenue is likely to be generated from
the development and licensing of the Technology.





In
October 2008, we completed a prototype fixed frequency microwave reactor system,
named “Patriot-1,” at the Ingersoll Production Systems facility in Rockford,
Illinois.  We have no manufacturing capability of our own.
Accordingly, we entered into an agreement with Ingersoll Production Systems for
research on and the manufacture of our machines, where the Patriot-1 was
completed.  The prototype is being tested initially to apply our
Technology to the decomposition of tires as waste and to retrieve commercially
viable components therefrom in the form of carbon, liquid hydrocarbons and gas
which can be converted to electricity. We use our prototype primarily to confirm
and refine the principles that will be utilized in commercial scale operations
of our Technology. We also use it to test various feedstocks, materials that can
benefit from the application of our Technology, prior to releasing processes for
production. The prototype will also be used on a limited basis with a goal to
show customers that the process works as applied to a specific feedstock and is
viable for commercialization.





The
Company has completed multiple demonstrations of our commercial prototype
machine during 2009 and 2010. The demonstrations included prospective customers
from the United States and several foreign countries as well as partners and
dignitaries and were held in our contract manufacturer’s facility (Ingersoll
Production Systems) which at that time was in Rockford, Illinois. As of March
31, 2010, the Rockford facility was closed and the prototype has been moved to a
new facility located in Morrisville, North Carolina. The demonstrations
consisted of processing tire material on a continuous basis and collecting
commercially viable byproducts in the form of diesel heating oil,
combustible gas in the combined form of propane, butane, methane and other gases
that can be used to generate electricity or be used as energy feedstock for
other processes, and a high BTU carbon char.  The make-up of the
byproducts was verified by independent certified laboratories including OILTEST
Inc., Atlantic Analytical Laboratory, AKRON Rubber Development Laboratory, Inc.
and Professional Analytical and Consulting Services, Inc. and the byproducts
were valued based on oil and energy indexes as well as an independent commodity
marketing company specializing in the sale of oils and char
byproducts.


3





Prior to
our acquisition of the assets and development stage business of Carbon Recovery
Corporation (“Carbon Recovery” or “CRC”) on September 22, 2006, and the
subsequent acquisition of the assets of Mobilestream Oil, Inc. on December 31,
2006, we had been a shell company since approximately December 15, 2005. With
the acquisition of (i) the assets and (ii) the development stage business from
Carbon Recovery, our business became that of Carbon Recovery. That business was,
and continues to be: (i) the design, manufacture and sale of machinery and
equipment units embodying the Technology; (ii) the ownership and operation of
plants using the Technology, in conjunction with other investors; and (iii)
formation of joint venture relationships with established companies with the
goal of further exploiting the Technology.





One
application of the process utilizes the Technology to decompose waste tires into
their components of carbon black, scrap steel, and hydrocarbon liquid and gas.
When the waste tires are processed, we recover carbon black which can be used in
filtration as well as in the production of rubber products. The hydrocarbon
liquid is not truly "oil". A tire is manufactured from hydrocarbons (60%), and
rubber and steel (40% together). The hydrocarbons used to make a tire are
"process oil". This process oil is a refined product, but with our technology it
is broken into a gas which is then partially liquified. The precise composition
of the resulting condensed liquid is not known but it has been tested and has a
BTU content comparable to heating oil and we believe that it can be sold for
fuel, though it may potentially require additional refining.





The tire
decomposition process involves a series of steps including repeated break down
of the materials into smaller components to fit the machine size and repeated
exposure of the materials to the microwave process at temperatures and for time
periods applicable to this kind of material.





We have
begun generating revenue from a joint development agreement and are also
currently conducting preliminary negotiations with prospective joint venture
partners and have entered into an exclusive marketing agreement with one company
for a designated geographic area outside the United States.  It
will take us approximately twelve months to deliver a system from the time we
receive an order.  It is our intention that each order be accompanied by a
cash deposit from the purchaser which will be recorded as deferred revenue until
the equipment is shipped, installed and operating successfully at the
destination site.





There are
other potential applications for our Technology covered by the pending patents.
These include:




1.
            Reduction
      of hydrocarbons in drilling cuttings to permit on-site
      disposal;


2.
            Volatilization
      of heavy or slurry oil;


3.
            Recovery
      of oil from oil shale and oil sands;
and


4.
            Medical
      applications.





Each
potential application will require additional testing and refinement in the
laboratory, creation and design of equipment that will use the Technology to
recover hydrocarbons from these alternate sources, the construction of test
units that are sufficiently large to determine whether the application works on
a large scale and has commercial value, securing orders for the manufacture of
machines designed to implement the process, and the manufacture, sale and
distribution of such equipment. Currently, we do not have adequate funds
available to take these steps for any of these alternate applications.
Therefore, our ability to expand our business in any such direction will depend
upon our success in finding joint venture or strategic alliance partners to
underwrite these activities, or licensees with the resources to develop these
applications while paying us royalties and similar fees and our ability to raise
capital. There can be no assurance that we will succeed.


4





We do not
intend to research nor represent to potential customers the commercial uses or
revenues they may derive from the end-products generated using our Technology.
Each potential customer will be expected to evaluate for itself whether the
commercialization and disposition of the end products justifies the cost to
purchase and install one of our machines.




We have
begun our marketing efforts in various industry sectors. We have hired sales and
marketing personnel. We have entered into an exclusive marketing agreement with
one company for a defined geographic area outside the United
States.  We intend to actively seek other marketing agreements with
partners who have demonstrable economic and marketing contact
resources.




We also
intend to consider the development of additional machines and equipment using
our core Technology in areas outside of the tire recycling industry, but we will
require the assistance of outside capital equity investments on a large scale,
or we will need to align ourselves with joint venture or strategic alliance
partners in order to have the funds available to exploit these other potential
applications.





We are
not presently devoting any time or funds to the construction of plants to
exploit our Technology. Any such effort will require capital in excess of funds
available to us, and will require us to "partner" with a company with much
larger resources.





As an
additional, but not complete, alternative we may enter into strategic alliances,
joint ventures and similar arrangements for the development, testing,
construction, marketing and sale of our machines. In each such arrangement we
will likely be required to share our revenues from sale of our products with the
other party or parties to the arrangement. The methods, terms and amounts of
these arrangements may vary greatly for each such transaction.





We are
considered to be in the development stage.  We have devoted
substantially all of our efforts to business planning and development, as well
as allocating a substantial portion of our time and resources in bringing our
product to the market and the raising of capital.





Our principal executive office is
located at 9400 Globe Center Drive, Suite 101, Morrisville, NC 27560. Our
telephone number is (856) 767-5665 and our internet address is www.globalresourcecorp.com. 
Trades in our common stock are reported on the Pink Sheets under the symbol
“GBRC”.





Reserve Equity
Financing





On
November 24, 2009, we entered into a Reserve Equity Financing Agreement (the
“REF Agreement”) with AGS Capital Group, LLC (“AGS”).  In connection
and contemporaneous with the execution of the REF Agreement, the Company also
entered into a Registration Rights Agreement with AGS (the “Registration Rights
Agreement”).  Pursuant to the terms of the REF Agreement, the Company
agreed to issue and sell to AGS, and AGS agreed to purchase from the Company,
from time to time up to $10,000,000 worth of the Company’s Common Stock, subject
to certain conditions and limitations.





Prior to
the effectiveness of a registration statement filed with the Securities and
Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement
(the “Effective Date”), AGS will purchase from the Company shares of the
Company’s Common Stock as mutually agreed upon by the Company and AGS at a
purchase price equal to 91% of the dollar volume-weighted average price per
share of the Company’s Common Stock (the “VWAP”) during the five consecutive
trading days prior to each such purchase. To date AGS has not purchased any
shares of Common Stock nor have we registered any shares of Common Stock for
resale by AGS.




5


For a
period of 36 months from the Effective Date, the Company may, from time to time
and subject to certain conditions that are outside the control of AGS, draw down
funds under the REF Agreement by issuing and selling shares of the Company’s
Common Stock to AGS. The purchase price of those shares will be 91% of the VWAP
during the five consecutive trading days after the Company delivers to AGS
written notice requesting an advance of funds (an “Advance”) under the REF
Agreement (the “Pricing Period”).  The amount of an Advance will
automatically be reduced by 50% if on any day during the Pricing Period, the
VWAP for that day does not meet or exceed 85% of the VWAP for the five trading
days prior to the notice of Advance.  The aggregate maximum amount of
Advances under the REF Agreement is (x) $10,000,000 less (y) amounts purchased
by AGS from the Company prior to the Effective Date.  The Company’s
ability to require AGS to purchase the Company’s Common Stock is subject to
various limitations. Among other limitations, (i) the maximum amount of each
Advance is 50% of the average daily trading volume for the ten days immediately
preceding the notice of Advance, (ii) a minimum of five trading days must elapse
between each notice of Advance and (iii) before AGS is obligated to buy any
shares of the Company’s Common Stock pursuant to a notice of Advance, the
Company must have filed with the SEC, and had declared effective, a Registration
Statement with respect to the resale of the shares of common stock issued to
AGS.





The REF
Agreement obligates the Company to indemnify AGS, and AGS to indemnify the
Company, for certain losses resulting from a misrepresentation or breach of any
representation or warranty made by the Company or AGS, respectively, or for
breach of any obligation of the Company or AGS, respectively.





Pursuant
to the REF Agreement, (i) the Company is obligated to pay to AGS a due diligence
fee of $10,000, of which $5,000 has already been paid and $5,000 will be paid
upon the first Advance, (ii) on November 30, 2009, the Company issued 300,000
shares of its Common Stock to AGS, (iii) for any fund or entity that AGS
directly or indirectly introduces to the Company who subsequently provides
bridge financing or assists in providing bridge financing to the Company, the
Company will deliver 500,000 shares of its Common Stock to AGS three days after
signing the bridge financing agreement, (iv) in the event that the Company does
not obtain bridge financing directly or indirectly through AGS, but AGS advances
$2,500,000 through the REF Agreement, the Company will issue an additional
500,000 shares of Common Stock to AGS three days after having advanced an
aggregate sum of $2,500,000 and (v) prior to the first Advance, the Company is
to obtain lock-up agreements from each officer and director of the Company in
the form annexed as Schedule 2.4 to the REF Agreement. These lock-up agreements
have not been obtained as of the date of filing of this Report.





The
Company may terminate the REF Agreement effective upon fifteen trading days’
prior written notice to AGS, provided that (i) there are no Advances
outstanding and (ii) the Company has paid all amounts owed to AGS under the
REF Agreement.  The obligation of AGS to make an Advance to the
Company pursuant to the REF Agreement will terminate permanently if
(i) there is any stop order or suspension of the effectiveness of the
Registration Statement for an aggregate of fifty (50) trading days or
(ii) the Company at any time fails materially to comply with certain
covenants specified in the REF Agreement and that failure is not cured within
thirty (30) days after receipt of written notice from AGS, subject to
exception.





The
shares of Common Stock that have been and may be issued to AGS under the REF
Agreement will be issued pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the “Securities Act”).  Pursuant
to the Registration Rights Agreement, the Company will file a registration
statement covering the possible resale by AGS of the shares that the Company has
issued and may issue to AGS under the REF Agreement (the “Registration
Statement”). The Registration Statement will cover such shares of Common Stock
that have been issued pursuant to the REF Agreement which (i) have not been sold
pursuant to an exemption from registration provided by Rule 144 and (ii) which
have not been transferred to a holder who may trade such shares without
restriction and the Company for which the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing a
restrictive legend. The Company may file subsequent registration statements
covering the resale of additional shares of Common Stock issuable pursuant to
the REF Agreement.  As described above, the effectiveness of the
Registration Statement is a condition precedent to the Company’s ability to sell
Common Stock to AGS under the REF Agreement. There is no guarantee that we will
be able to meet the conditions under the REF Agreement in order to draw down any
portion of the amounts available under the REF Agreement.




6




History





The
Company was originally incorporated in the State of Nevada on June 17, 2002
under the name Mariner Health Care, Inc. On August 14, 2002, the Company filed
Articles of Merger with the State of Nevada pursuant to which Email
Mortgage.com, Inc., a New Jersey corporation, was merged with and into the
Company. On July 28, 2002, the Company amended its articles of incorporation to
change its name to Advanced Healthcare Technologies, Inc. Under the name
Advanced Healthcare Technologies, Inc., the Company owned and operated a
subsidiary named "Advanced Hyperbaric Industries, Inc." ("Advanced Hyperbaric")
which engaged in the manufacture and marketing of rigid extremity hyperbaric
chambers and a sacral patch device, both of which utilized oxygen therapy for
the treatment of open sores and wounds, including bedsores.




On
December 4, 2003, the Company acquired a 100% interest in Nutratek LLC
("Nutratek") which was engaged in the research and development of nutritional
dietary supplements, functional food products and natural sweeteners, which
products were manufactured by non-related third parties. On March 31, 2004, as a
consequence of the Nutratek acquisition, the Company spun off and sold the
intellectual properties and oxygen therapy products and business of Advanced
Hyperbaric in exchange for the assumption of Advanced Hyperbaric's liabilities.
On June 30, 2004 the former President, Chief Executive Officer, Director and
majority stockholder sold his interest in the Company to an unrelated third
party. In connection with that sale and change in control, the Company's
operating subsidiary, Nutratek was spun off to the selling majority stockholder
and the purchaser determined to change the business of the Company to that of a
business development company. On September 10, 2004, the Company changed its
name to its current “Global Resource Corporation”.  On September 17,
2004, the Company filed a notice with the SEC electing to be regulated as a
business development company ("BDC") under the Investment Company Act of 1940,
as amended. The intent was to focus on acquiring interests in portfolio
companies doing business in the energy sector.





While
operating as a BDC, and seeking energy-related portfolio companies, on January
11, 2005 the Company acquired a 50% interest in Well Renewal, LLC ("Well
Renewal"), an entity which managed and operated approximately 30 oil wells in
Oklahoma by utilizing a nitrogen and carbon dioxide gas injection unit to "pump
up" and re-pressurize the wells to increase oil output. In December 2005 we
assigned our Well Renewal ownership interest to Transnix Global Corporation in
settlement of sums past due under a $137,900 8% debenture we issued to
Transnix.





The
Company filed a notice withdrawing its BDC election on December 20, 2005, at
which point the Company became a "development stage company" and a shell company
until September 22, 2006 when it acquired the assets of Carbon Recovery
Corporation in the Recapitalization Transaction described below.





Careful
Sell





Careful
Sell was a Delaware limited liability company formed and managed by Mr. Frank G.
Pringle, our former Chairman, President and CEO.  Mr. Pringle and his
spouse, a former director of the Company, owned all of the limited liability
interests of Careful Sell.  Careful Sell was the owner of all rights
to the inventions of Mr. Pringle.  In February 2005, prior to the
Company’s acquisition of CRC’s assets described below under “Our Purchase of the Assets of Carbon
Recovery Corporation”, CRC formalized a prior intended agreement with
Careful Sell (the “February 2005 Agreement”).  The February 2005
Agreement transferred from Careful Sell to CRC the rights to commercialize such
inventions and to operate and use the related processes and apparatus to make,
sell, use and otherwise dispose of products which may be processed utilizing the
inventions.  As consideration, CRC issued Careful Sell 37,500,000
shares of its common stock and agreed to pay Careful Sell royalty payments in
perpetuity that varied with the use made of the intellectual property and the
revenues received by CRC.  The February 2005 Agreement superseded a
prior agreement not formalized between CRC and the managing members of Careful
Sell in 2002.  In January 2006, Careful Sell merged into PSO
Enterprises, Inc., a Delaware corporation, which in turn merged into
Mobilestream Oil, Inc. during February 2006.  As a result,
Mobilestream acquired the rights that had been those of Careful Sell under the
2005 Agreement and the royalties, if any, payable under the 2005 Agreement would
be payable by CRC to Mobilestream. The 2005 Agreement was subsequently
terminated as provided below.


7





Our Purchase of
the Assets of Carbon Recovery Corporation





On or
about July 26, 2006, we entered into a plan and agreement of reorganization (the
"CRC Acquisition Agreement") with Carbon Recovery Corporation, a New Jersey
corporation formed on July 19, 2002 ("Carbon Recovery" or "CRC"), pursuant
to which we agreed to purchase substantially all of the assets of, and assume
certain specified liabilities of, Carbon Recovery, in exchange for the
consideration described below.  The acquisition was completed on
September 22, 2006 (the “CRC Acquisition Closing”).  At the time of
the acquisition, Mobilestream Oil, Inc. ("Mobilestream") owned 37,500,000 shares
of the common stock of CRC, which represented a controlling block of the issued
and outstanding common stock of CRC. Frank G. Pringle served as the Chief
Executive Officer and Chairman of the Board of Directors of both CRC and
Mobilestream. Upon the CRC Acquisition Closing, Mr. Pringle became our President
and Chief Executive Officer and Chairman of our Board of
Directors.  He served as our President and Chief Executive Officer
until August 13, 2008 and as the Chairman of our Board of Directors until
November 12, 2008.  Prior to the CRC Acquisition Closing, Mr. Pringle
had no affiliation with us or any of our affiliates.





At the
CRC Acquisition Closing, we assumed certain specified liabilities of CRC,
acquired substantially all of the assets of CRC and issued a total of 48,688,996
shares of our common stock (including (i) 37,500,000 shares issued to
Mobilestream representing Mobilestream’s ownership of the identical number of
shares of CRC common stock and (ii) 11,188,996 shares issued to CRC). The
acquired assets of CRC included an exclusive license, carried at a zero dollar
book value, from Mobilestream to utilize the patent pending application for the
use of the Technology.  As part of the transaction, we also issued to
CRC 3,908,340 Class B warrants, 1,397,600 Class D warrants and 1,397,600 Class E
warrants (collectively, the "CRC Acquisition Warrants") to purchase shares of
our common stock. In January of 2010, the expiration date of the CRC Acquisition
Warrants, was extended from March 31, 2010 to December 31, 2010.




Our
acquisition of CRC’s assets pursuant to the CRC Acquisition Agreement was
accounted for as a reverse merger (recapitalization) with CRC being deemed the
accounting acquirer for accounting purposes and the Company being deemed the
legal acquirer.




The
parties to the CRC Acquisition Agreement intended that the acquisition of the
assets of Carbon Recovery be treated as a "C" reorganization under the
Internal Revenue Code of 1986 as amended (the "IRC"). No Carbon Recovery
stockholder was a party to the CRC Acquisition Agreement.




Upon the
CRC Acquisition Closing, CRC’s sole assets were the shares and warrants we
issued to CRC (the “CRC Acquisition Consideration”).  For federal
income tax reasons and in order to avoid treatment as an inadvertent investment
company under the Investment Company Act of 1940, CRC determined to liquidate
and dissolve immediately upon the CRC Acquisition Closing and to deposit all its
assets (consisting, at that point, solely of the CRC Acquisition Consideration)
in a liquidating trust (the “CRC Liquidating Trust”) pursuant to a liquidating
trust agreement (the "CRC Liquidating Trust Agreement") entered into with Olde
Monmouth Stock Transfer Co., Inc. ("Olde Monmouth"), our transfer agent, and
pursuant to which Olde Monmouth agreed to act as the liquidating
trustee. Old Monmouth’s term as the trustee has since ended and Fox Law
Offices P.C., currently serves as trustee (the "CRC Liquidating
Trustee"). The beneficiaries of the CRC Liquidating Trust are the
stockholders of CRC.  The CRC Acquisition Consideration must be held
in the liquidating trust indefinitely until it can all be distributed to the
beneficiaries of the CRC Liquidating Trust pursuant to an effective registration
statement under the Securities Act of 1933 or pursuant to an exemption
therefrom.  In connection with the CRC Liquidating Trust Agreement, we
agreed that we would file a registration statement for the resale of the shares
of our common stock and warrants (and the shares underlying them) issued as part
of the CRC Acquisition Consideration and for the resale of the shares underlying
the CRC Acquisition Warrants.  In January of 2010, the expiration date
of the Mobilstream Acquisition Warrants, was extended from March 31, 2010 to
December 31, 2010. The shares and warrant are included for resale in the
CRC/Mobilestream Registration Statement. A registration statement for the resale
of such shares and warrants was filed with the SEC on February 12, 2008 and is
currently pending (the “CRC/Mobilestream Registration
Statement”).


8





To the
Company’s knowledge, (i) Mr. Pringle is a beneficiary of the Carbon Recovery
Liquidating Trust and is to receive 119,000 shares of our common stock when
distributed by the CRC Liquidating Trust and (ii) Lois Augustine Pringle, the
wife of Mr. Pringle, is a beneficiary of the Carbon Recovery Liquidating Trust
and is to receive 1,520,171 shares of our common stock when distributed by the
CRC Liquidating Trust.





In order
to clarify, restate and memorialize the ownership and licensure of the
intellectual property previously licensed to Carbon Recovery by Careful Sell
(which, by the time of the CRC Acquisition Closing, had been merged into
Mobilestream), contemporaneous with the CRC Acquisition
Closing, Mobilestream, Mr. Pringle and his wife, Lois Augustine Pringle,
executed a combined technology license agreement (the "Combined Technology
License Agreement").  The Combined Technology License Agreement
confirmed (i) Mobilestream as the sole owner of the licensed intellectual
property, and (ii) the exclusive license of the intellectual property by
Mobilestream to Carbon Recovery.  In the same agreement, Carbon
Recovery assigned all of its interest in the intellectual property license to
the Company and the Company agreed to pay to Mobilestream the royalty payments
that CRC was previously obligated to pay to Mobilestream under the February 2005
Agreement.  The Company's royalty obligations under the Combined
Technology License Agreement ended when the Company acquired substantially all
of the assets of Mobilestream as described below under “Our Purchase of the Assets of
Mobilestream Oil, Inc.”.





Our
Purchase of the Assets of Mobilestream Oil, Inc.





On
December 31, 2006, we acquired the assets of Mobilestream Oil, Inc., a Delaware
corporation ("Mobilestream"), pursuant to a plan and agreement of reorganization
dated November 28, 2006 (the "Mobilestream Acquisition Agreement") between the
Company and Mobilestream. Mobilestream was a development stage company which
owned the Technology, consisting of certain proprietary technology and related
custom software for the use of microwaves to break down petroleum-based
products, such as used tires, into their component parts, and capturing those
components in usable form for resale.  At the closing of the purchase
of Mobilestream’s assets (the “Mobilestream Acquisition Closing”), we (i)
acquired all of the Technology and (ii) assumed Mobilestream’s liabilities,
which were minimal.




The
Mobilestream assets we acquired consisted of (i) the then three patents pending
for the Technology carried at a book value of zero, (ii) approximately
$1,678,000 of cash and (iii) approximately $149,000 of fixed
assets.  Mobilestream also owned 37,500,000 shares of our own common
stock (acquired in connection with our purchase of the assets of CRC) which were
cancelled as part of the transaction.  Further, at the Mobilestream
Acquisition Closing, the Combined Technology License Agreement was terminated by
virtue of the merger of the interests of the licensor and the licensee
thereunder.




At the
time of the Mobilestream acquisition, Mobilestream was controlled by Frank G.
Pringle, our then Chairman, President and CEO.  At that time, Mr.
Pringle had an approximately 86% ownership interest
in Mobilestream.





The
parties to the Mobilestream Acquisition Agreement intended that the acquisition
of Mobilestream would qualify as a "D" Reorganization under Section 368(a)(1)(D)
of the IRC.  No Mobilestream stockholder was a party to the
Mobilestream Acquisition Agreement.





At the
Mobilestream Acquisition Closing, we issued (i) 11,145,225 shares of our Common
Stock (the “Mobilestream Acquisition Common Stock”) to Mobilestream; (ii)
35,236,188 shares of our 2006 Series of Convertible Preferred Stock (or
“Preferred Stock A”) to Frank G. Pringle, the sole holder of the 2006 Series of
Mobilestream Preferred Stock; and (iii) 27,205,867 common stock purchase
warrants (the "Mobilestream Acquisition Warrants”) to Mobilestream to purchase
shares of our common stock on the basis of one Mobilestream Acquisition Warrant
for each three shares of either Mobilestream common stock or preferred stock,
exercisable at $4.75 per share for a period ending on December 31, 2007. Of
these warrants, 23,500,000 of the Mobilestream Acquisition Warrants were issued
directly to Frank G. Pringle and were subsequently cancelled on October 23,
2007.




9





As stated
above, at the Mobilestream Acquisition Closing, we issued 35,236,188 shares of
our Preferred Stock A to Frank G. Pringle, the sole holder of the 2006 Series of
Mobilestream Preferred Stock.  At the time of issuance, each share of
Preferred Stock A was entitled to two votes per share and each was convertible
into two shares of our Common Stock.  In October 2007, the terms of
conversion of our Preferred Stock A were changed from two shares of our Common
Stock for each share of Preferred Stock A to half of one share of our Common
Stock for each share of our Preferred Stock A.  On June 25, 2008, Mr.
Pringle converted 1,791,064 shares of Preferred Stock A into 895,532 shares of
our Common Stock.  On August 13, 2008, Mr. Pringle converted an
additional 33,440,124 shares of Preferred Stock A into 16,720,062 shares of our
Common Stock and sold 6,600,000 shares of our Common Stock back to the Company
for $1,650,000.  The remaining 5,000 shares of Preferred Stock A, then held
by a person related to Mr. Pringle, were converted into 2,500 shares of our
Common Stock on January 6, 2009. As a result, no shares of Preferred Stock A
remain outstanding.





Upon the
Mobilestream Acquisition Closing, Mobilestream’s sole assets were the shares and
warrants we issued to Mobilestream at and in connection with the Mobilestream
Acquisition Closing (the “Mobilestream Acquisition Consideration”, excluding the
23,500,000 Mobilestream Acquisition Warrants issued directly to Frank Pringle
which were subsequently cancelled and the Preferred Stock A which has since been
converted into shares of our Common Stock).  For federal income tax
reasons and in order to avoid treatment as an inadvertent investment company
under the Investment Company Act of 1940, Mobilestream determined to liquidate
and dissolve immediately upon the Mobilestream Acquisition Closing and to
deposit all its assets (consisting, at that point, solely of the Mobilestream
Acquisition Consideration) in a liquidating trust (the “Mobilestream Liquidating
Trust”) pursuant to a liquidating trust agreement (the "Mobilestream Liquidating
Trust Agreement") entered into with Olde Monmouth and pursuant to which Olde
Monmouth agreed to act as the liquidating trustee (the "Mobilestream Liquidating
Trustee").  The beneficiaries of the Mobilestream Liquidating Trust
are the stockholders of Mobilestream.  The Mobilestream Acquisition
Consideration must be held in the liquidating trust indefinitely until it can
all be distributed to the beneficiaries of the Mobilestream Liquidating Trust
pursuant to an effective registration statement under the Securities Act of 1933
or pursuant to an exemption therefrom.  In connection with the
Mobilestream Liquidating Trust Agreement, we agreed that we would file a
registration statement for the resale of the shares of our common stock and
warrants (and the shares underlying them) issued as part of the Mobilestream
Acquisition Consideration.  In January of 2010, the expiration date of
the Mobilstream Acquisition Warrants, was extended from March 31, 2010 to
December 31, 2010. The shares and warrant are included for resale in the
CRC/Mobilestream Registration Statement.





Principal Products and
Services





The Company’s principal product is the
Technology. The Technology has several potential applications including, but not
limited to decomposing waste tires into their components to recover carbon
black, which can be used in filtration as well as in the production of rubber
products, and hydrocarbons, known as “process oil”, which is broken into a gas
and the partially liquefied for use as heating oil and possibly fuel after
additional refining. The Company is currently principally focused on the design,
manufacture and sale of machinery and equipment to be used for the purpose of
exploiting the Technology, as well as licensing of the Technology.




Other
potential applications for the Technology include, (i) the reduction of
hydrocarbons in drilling cutting to permit on-site disposal; (ii)
voltilalization of heavy or slurry oil (iii) recovery of oil from oil shale and
oil sands and (iv) certain medical applications. Each potential application will
require additional testing and refinement as well as the creation and design of
equipment that will use the Technology to recover hydrocarbons from the
alternate sources. The Company currently does not have the funds available to
seek any of these alternate applications. Therefore, the Company seeks to find
joint venture or strategic alliance partners with the resources to develop
and/or underwrite the activities or licensing arrangements pursuant to which we
may receive royalty payments or similar fees.




10





In October 2008, the Company
completed a prototype machine, the “Patriot-1” which is being tested to apply
the Technology to the decomposition of tires as waste to retrieve commercially
viable components therefrom in the form of carbon, liquid hydrocarbons and gas
to be converted to electricity. The Company is currently working on the Patriot
2 TM Tire-to-Fuel Oil Recycling System (“Patriot 2”), our next generation
prototype containing additional features and improved efficiency.





Customers;
Suppliers





As of
December 31, 2009, the Company had one customer, Universal Alternative Fuels,
Inc. (“UAF”). On October 14, 2009, the Company entered into a License Agreement
with UAF, as amended by Amendment No. 1 to the License Agreement dated October
14, 2009 (the “UAF License Agreement”). Pursuant to the terms of the UAF License
Agreement, the Company granted UAF an exclusive world-wide, royalty free license
for the application of the Technology in recovering commercially usable energy,
energy producing material and by products from oil shale and coal (the “Licensed
Field of Use”), including, (i) the right to sublicense in the Licensed Field of
Use; (ii) to practice the method or process required for the Licensed Field of
Use and covered by the Company’s patents or the Technology (the “Licensed
Process”) as a service to others or for UAF itself; (iii) to make, have made and
use in the practice of the Licensed Process and to sell, offer to sell, lease,
distribute, export and import licensed products in the country or countries in
which the patent are effective and (iv) to use the Company’s trademarks. UAF was
required to pay a one time license fee equal to $750,000 (the “License Fee”)
upon the execution and delivery of the UAF License Agreement and receive
restricted shares aggregating to 20% of the issued and outstanding shares of
common stock of UAF (the “Equity Interest”) of UAF on the date of
issuance.





In
connection with the UAF License Agreement, UAF issued a purchase order, dated
October 14, 2009, for an initial machine capable of processing one ton per hour
of oil shale (the “Purchase Order”) to the Company. The purchase price for the
initial machine is based on a formula related to the Company’s cost to
manufacture the initial machine and will not exceed $3.5
million.  Payment of the purchase price is as follows: (i) UAF was
required to pay $500,000 to the Company six months from the date of the Purchase
Order (ii) and $500,000 nine months from the date of the Purchase Order, (iii) a
deemed deposit by UAF of $843,000 was credited against the purchase price on the
date of the Purchase Order, and (iv) the balance of the purchase price will be
paid upon completion of the initial machine, demonstration and acceptance by
UAF.  As of the date of this filing, UAF has not paid the initial
$500,000 payment due in April of 2010, nor has it paid the second $500,000
payment due in July of 2010.





The
Purchase Order was subject to a 180 day “wait and see” period from the date of
the Purchase Order upon which UAF had the right to terminate the Purchase Order
only if the Company has not raised at least $3,400,000 in additional equity
capital (which shall include debt, if convertible into Common Stock of the
Company) within 150 days from the date of the UAF License Agreement. If UAF had
exercised its right to terminate the Purchase Order, the Company had a ten day
period in which it could repurchase the license granted to UAF and retain the
existing prototype machine for an aggregate of $1,700,000 (the “Repurchase
Price”) which included the return of the $750,000 license fee and reimbursement
to UAF of the $843,000 in costs incurred in connection with the License
Agreement to be paid within twenty days from the end of the ten day
period.


11


Prior to
the date of this filing, the Company received from UAF a notice of
termination (the "Termination Notice") of the License Agreement and Purchase
Order and a notice of foreclosure ("Foreclosure Notice") in connection with the
Security Agreement.  The Company believes that, for a number of reasons,
pursuant to the terms of the License Agreement and all related agreements,
the Termination Notice and Foreclosure Notice are invalid. On July 26,
2010, the Company issued a notice of default ("Default Notice") to UAF as a
result of UAF's failure to issue the Equity Interests and make the required
Purchase Price payments pursuant to the terms of the License Agreement and
Purchase Order.  UAF has 60 days from the date of the Default Notice to
cure such breach.  If UAF has not cured the breach within the 60 day time
frame the Default Notice serves as notice of termination by the Company of the
License Agreement and Purchase Order. Upon such termination UAF's lien
pursuant to the Security Agreement would terminate. The 60 day time frame
has elapsed as of September 26, 2010 thereby terminating the License Agreement
and Purchase Order. On October 20, 2010, UAF sent to the Company a Notice of
Disposition of Collateral notifying the Company that certain of it patent
applications and other items as identified in the Security Agreement would be
offered for sale at a public auction on November 4, 2010.  On December 16,
2010 UAF issued a press release announcing a change in the date of the public
auction to December 22, 2010. Representatives of the Company attended the
auction held by UAF at which UAF auctioned certain of the Company’s assets
to itself.  Additionally, on November 4, 2010 the Company received a copy
of a written consent executed by the board of directors of UAF authorizing the
issuance of the Equity Interest together with an unsigned copy of a stock
certificate in the Company’s name for an aggregate of 40 shares of the common
stock of UAF. There are no assurances as to the outcome of this
dispute.




Manufacturing
Outsourcing





We do not have our own factory site nor
the equipment, personnel or funds required to manufacture the machines designed
to implement applications of our pending patents technology. Accordingly, our
strategy is to enter into manufacturing agreements with companies that have the
physical sites, manpower and financial strength to manufacture our equipment to
our specifications.





In October 2008, we completed a
prototype fixed frequency microwave reactor system, named “Patriot-1”, at the
Ingersoll Production Systems facility. The prototype has been used to
demonstrate the applicability of our microwave technology to the decomposition
of tires as waste and to retrieve commercially viable components therefrom in
the form of carbon, liquid hydrocarbons and combustible gas which can be
converted to electricity.




Joint Ventures and Strategic
Alliances





We
currently have limited funds available to pursue research and development of our
Technology in other potential areas of application. These additional
applications require the investment of large amounts of capital over extended
time periods to investigate, refine and eventually develop the correct
techniques for the use of microwave technology for the relevant application,
build test units to evaluate the viability of the techniques on a large scale,
determine the commercial usefulness of the application, and develop a sales and
marketing force with expertise in the intended area of use. Accordingly, our
strategy will be to negotiate collaborative agreements with large industrial and
manufacturing companies, governments, or other parties to pursue opportunities
in these areas of application.





On April
23, 2009, Global Heavy Oil Corporation, a wholly-owned subsidiary of the
Company, entered into a Joint Development Agreement with Schlumberger Technology
Corporation and Schlumberger Holdings Limited (the “Joint Development
Agreement”).  The parties to the Joint Development Agreement agreed to
use reasonable efforts to collaborate in order to develop surface upgrading
products and services in heavy oil oilfield operations (the “Products and
Services”).  Surface upgrading are processes and technologies using
microwaves to increase the gravity of heavy oil above the surface of the Earth.
Heavy oil is petroleum with an American Petroleum Institute gravity of 22.3
degrees or less.  Pursuant to the Joint Development Agreement, we
agreed not to engage in the research, development, manufacturing, marketing or
exploitation of Products and Services during its term and for two years
thereafter, except pursuant to the Joint Development Agreement.





Pursuant
to the Joint Development Agreement, Schlumberger agreed to pay $300,000 within
thirty days of its execution and another $300,000 on its first
anniversary.  These moneys are non-refundable.  The first
$300,000 was received on May 22, 2009. The Company received the second payment
of $300,000 on March 4, 2010. The Company earned $180,000 in revenues for the
year ended December 31, 2009. As of December 31, 2009, a balance of $120,000
remains in the deferred revenue account on the consolidated balance
sheet.


12





Pursuant
to the terms of the Joint Development Agreement, each party to it granted to the
other an exclusive, worldwide, royalty-free license to use its intellectual
property applicable to surface upgrading in heavy oil oilfield operations during
the term of the Joint Development Agreement.





The
collaboration between the parties to the Joint Development Agreement is to be
implemented in three distinct phases, with the first phase to be completed
within a maximum of three years from the date of the Joint Development
Agreement.  If a phase’s objectives are not satisfied within the
allotted timeframe, the collaboration under the Joint Development Agreement
would terminate.




Marketing and Distribution
Arrangements





We have
begun our marketing efforts in various industry sectors. As of the date of this
filing, we have one full time sales employee. In the future we may expand the
number of our sales and marketing personnel and possibly partly outsource these
activities to third parties. We have entered into an exclusive marketing
agreement with C6 Engineering Pty LTD (“C6 Engineering”) pursuant to which the
C6 Engineering has exclusive rights to market to, procure orders from, and/or
sell supply and distribute products embodying the Technology to certain
territories located in China, Russia, the former USSR, the Middle East,, Sri
Lanka, Malaysia and India. The exclusive rights granted to C6 Engineering
are subject to the sale of a minimum of ten products a year. If C6 Engineering
fails to sell a minimum of 10 products a year, the rights will become
non-exclusive, however, C6 Engineering will continue to have exclusive rights to
sell products to its existing customers. We intend to actively seek other
marketing agreements with partners who have demonstrable economic and marketing
contact resources. We do not know what terms or conditions may be required if
the Company enters into any marketing agreements or arrangements in the future.
The description of the marketing agreement herein is intended to be a summary
only and is qualified in its entirety by the terms of the marketing agreement
annexed hereto as Exhibit 10.14, and incorporated herein by this
reference.




Intellectual
Property





Patents





The
Company has developed microwave technology and machinery for a range of
processing applications for such materials as shale deposits and tar sands, in
addition to waste tires, heavy oil, coal, municipal solids wastes (MSW), drill
cuttings and muds. We currently have one patent issued and three utility
patent applications pending in the United States Patent and Trademark Office
(the "PTO") and approximately ten corresponding utility patent applications
pending in international patent offices in commercially relevant countries. In
August 2009, the Company received a Notice of Allowance for its first
application (Serial No 11/610,823) from the PTO.  A Notice of Allowance is
issued if one or more of the claims of an application are allowed and precedes
the formal patent issuance.On December 8, 2009, the
U.S. Patent and Trademark Office issued U.S. Patent No. 7,629,427 to the
Company.  This issue is for the technology that is the core of the
Company's Patriot 2TM Tire-to-Fuel Oil Recycling System, in addition to other
potential future applications.  The Patriot 2TM is our next generation
prototype containing additional features and improved efficiency.





The
Company’s patent and patent applications cover its proprietary microwave
technology for recovering hydrocarbons and fossil fuels from sources such as
tires, oil shale, capped wells, shale deposits, and waste oil
streams.  The process uses specific frequencies of microwave radiation
to extract oils and alternative petroleum products from a variety of these
unconventional hydrocarbon sources. Our patent applications also cover certain
medical applications of our Technology. We rely on a combination of trade
secrets, non-disclosure and other contractual agreements and technical measures
to protect our rights in our Technology. We maintain confidentiality agreements
with our officers, directors, employees, consultants, and subcontractors, as
well as collaborative partners, to maintain the proprietary nature of our
Technology. We believe that our Technology is not subject to any infringement
actions based upon the patents of any third parties.


13





The
Company has the following patent applications pending:





Docket Number
              
              Country
              
              Application
                Number
              
              Application
                Date
              
              First Listed
                Inventor
              
              TitleGBRC-0004
              
              United
      States
              
              11/610823
              
              12/14/2006
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0007
              
              United
      States
              
              11/610962
              
              12/14/2006
              
              PRINGLE
      FRANK G.
              
              USE
      OF MICROWAVE ENERGY FOR THERMOTHERAPYGBRC-0018
              
              Canada
              
              2633091
              
              12/14/2006
              
              PRINGLE
      FRANK C.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0019
              
              European
      Patent Convention
              
              6845600.3
              
              12/14/2006
              
              PRINGLE
      FRANK C.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0020
              
              Norway
              
              20082798
              
              12/14/2006
              
              PRINGLE
      FRANK C.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0021
              
              Mexico
              
              08/07748
              
              12/14/2006
              
              PRINGLE
      FRANK C.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0022
              
              Australia
              
              2006335213
              
              12/14/2006
              
              PRINGLE
      FRANK C.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0023
              
              Brazil
              
              PI0620706-5
              
              12/14/2006
              
              PRINGLE
      FRANK C.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0024
              
              United
      States
              
              12/138905
              
              6/13/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0026
              
              Australia
              
              2006325835
              
              12/14/2006
              
              PRINGLE
      FRANK G.
              
              DEVICE
      PRODUCING AND USE OF MICROWAVE ENERGY FOR THERMOTHERAPYGBRC-0027
              
              Canada
              
              2633228
              
              12/14/2006
              
              PRINGLE
      FRANK G.
              
              DEVICE
      PRODUCING AND USE OF MICROWAVE ENERGY FOR THERMOTHERAPYGBRC-0028
              
              European
      Patent Convention
              
              6845727.4
              
              12/14/2006
              
              PRINGLE
      FRANK G.
              
              USE
      OF MICROWAVE ENERGY FOR THERMOTHERAPYGBRC-0029
              
              Argentina
              
              P080102579
              
              6/17/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0030
              
              Venezuela
              
              2008-001185
              
              6/16/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0037
              
              Patent
      Cooperation Treaty
              
              PCT/US2009/058951
              
              9/30/2009
              
              HEDMAN
      LENNART
              
              MICROWAVE-BASED
      CONVEYING DEVICES AND PROCESSING OF CARBONACEOUS
  MATERIALSGBRC-0039
              
              United
      States
              
              12/570323
              
              9/30/2009
              
              HEDMAN
      LENNART
              
              MICROWAVE-BASED
      CONVEYING DEVICES AND PROCESSING OF CARBONACEOUS
  MATERIALSGBRC-0040
              
              United
      States
              
              12/577341
              
              10/12/2009
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0041
              
              United
      States
              
              12/616311
              
              11/11/2009
              
              PRINGLE
      FRANK G.
              
              MICROWAVE
      PROCESSING OF CARBON-BASED COMPOSITIONSGBRC-0042
              
              United
      States
              
              12/577337
              
              10/12/2009
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0043
              
              United
      States
              
              12/577330
              
              10/12/2009
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0044
              
              United
      States
              
              12/572715
              
              10/2/2009
              
              PRINGLE
      FRANK G.
              
              MICROWAVE
      PROCESSING OF OIL SHALE AND COALGBRC-0045
              
              Brazil
              
              PI0811683-0
              
              6/13/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0046
              
              Canada
              
              N/A
              
              6/13/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0047
              
              Mexico
              
              09/13719
              
              6/13/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0048
              
              Australia
              
              2008266015
              
              6/13/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL FUELSGBRC-0049
              
              European
      Patent Convention
              
              8770976.2
              
              6/13/2008
              
              PRINGLE
      FRANK G.
              
              MICROWAVE-BASED
      RECOVERY OF HYDROCARBONS AND FOSSIL
FUELS


14





License
Agreement





Pursuant
to the terms of the UAF License Agreement, the Company granted UAF an exclusive
world-wide, royalty free license, with the right to sub-license and effective
for an unlimited time, to use and exploit the Company’s intellectual property
and technological know-how for the microwave processing of oil shale and coal.
UAF agreed to purchase exclusively from the Company all machines to be
manufactured for UAF (or its sub-licensees) under the license agreement, subject
to the Company’s ability to manufacture such machines.  UAF was
required to pay a one time license fee equal to $750,000 (the “License Fee”)
upon the execution and delivery of the UAF License Agreement and the Company
would receive restricted shares aggregating to 20% of the issued and outstanding
shares of common stock of UAF (the “Equity Interest”) on the date of issuance.
In connection with the UAF License Agreement, (i) the Company entered into a
Security Agreement with UAF, dated October 14, 2009 and (ii) UAF issued the
Purchase Order.





The
Security Agreement grants UAF first priority security interests in (i) the
Company’s existing prototype machine currently located in Morrisville, North
Carolina (the “Existing Prototype Machine”) and (ii) the Company’s patent
rights, technology and trademarks as applied to the oil shale and coal fields of
use, as security for an aggregate amount of $1.7 million, including but not
limited to the (i) $843,000 credited towards the purchase price of the initial
machine as describe in the UAF License Agreement, (ii) the License Fee and (iii)
all other obligations of the Company to UAF under the Security Agreement and the
UAF License Agreement.  The security interests granted pursuant to the
Security Agreement will terminate and be released upon acceptance by UAF of the
initial machine described in the Purchase Order or payment by the Company of the
Repurchase Price.


15





Prior to
the date of this filing, the Company received from UAF a notice of
termination (the "Termination Notice") of the License Agreement and Purchase
Order and a notice of foreclosure ("Foreclosure Notice") in connection with the
Security Agreement.  The Company believes that, for a number of reasons,
pursuant to the terms of the License Agreement and all related agreements,
the Termination Notice and Foreclosure Notice are invalid. On July 26,
2010, the Company issued a notice of default ("Default Notice") to UAF as a
result of UAF's failure to issue the Equity Interests and make the required
Purchase Price payments pursuant to the terms of the License Agreement and
Purchase Order.  UAF has 60 days from the date of the Default Notice to
cure such breach.  If UAF has not cured the breach within the 60 day time
frame the Default Notice serves as notice of termination by the Company of the
License Agreement and Purchase Order. Upon such termination UAF's lien
pursuant to the Security Agreement would terminate. The 60 day time frame
has elapsed as of September 26, 2010 thereby terminating the License Agreement
and Purchase Order. On October 20, 2010, UAF sent to the Company a Notice of
Disposition of Collateral notifying the Company that certain of it patent
applications and other items as identified in the Security Agreement would be
offered for sale at a public auction on November 4, 2010. On December 14,
2010, UAF issued a press release announcing a change in the date of the public
action to December 22, 2010. Representatives of the Company attended the auction
held by UAF at which UAF auctioned certain of the Company’s assets to itself.
Additionally, on November 4, 2010 the Company received a copy of a written
consent executed by the board of directors of UAF authorizing the issuance of
the Equity Interest together with an unsigned copy of a stock certificate in the
Company’s name for an aggregate of 40 shares of the common stock of UAF. There
are no assurances as to the outcome of this dispute.




Trademarks





We do not
currently have any trademark or service mark protection other than that
available at common-law, if any. We intend to file appropriate applications for
protection upon receipt of funds allocated to that purpose.





Regulatory
Issues





At this time, there is no direct
federal or state certification or regulatory requirements for our products,
except for the requirement that all our equipment conform to regulations for
microwave devices. We are not aware of any pending federal or state legislation
which would introduce regulatory requirements that would negatively impact or
impede the manufacture, sale and distribution of our equipment in the United
States or elsewhere.





There will be federal, state and local
environmental, health and hazardous substance regulations that will apply at
each location at which one of our machines is installed. It is not possible to
discuss the variety of these regulations in detail; however, we believe that the
design of our equipment for the decomposition of hydrocarbons for the
applications in which they are currently being marketed—namely waste tires—will
protect the environment from any harmful releases or waste
products.





Wholly apart from any regulatory
requirements, we will maintain product liability insurance for our products as a
condition of our ability to market them. Our purchase agreements will require
our customers to maintain adequate amounts of product liability insurance naming
us as an additional insured.





Competition




The Company competes in the waste tire
business. Its competitors either shred tires to be used as mulch, filler in
asphalt or similar materials, burn tires as fuel to generate electricity or
other low value products. As of 2003, about 290 million tires are discarded in
the U.S. every year (roughly one per person). Nearly 45% of these scrap
tires (130 million) are used as "tire derived fuel" (TDF), which often involves
burning the (usually shredded) tires alongside conventional fuels like coal
(usually no more than 10-25% TDF is used when co-firing with coal). At the end
of 2003, 89 U.S. facilities burned TDF on a regular basis, about half of which
(43) are cement kilns with the rest being pulp/paper mills (17), coal-fired
power plants (13), and other industrial boilers or waste incinerators (15).
Civil engineering projects using 56 million tires, ground rubber turned into
molded rubber products using 18 million tires, ground rubber turned into
rubber-modified asphalt using 12 million tires, exported items using 9 million
tires, cut/stamped/punched products using 6.5 million tires, and agricultural
and miscellaneous uses using 3 million tires. Currently, only two dedicated tire
incinerators are currently operating in the U.S. Currently, a giant (800
ton/day) tire incinerator is planned for Erie, PA. The number of facilities
burning TDF is increasing. More cement kilns are beginning to use TDF and
electric arc furnaces (EAFs) are starting to burn tires.1




16




Tire
manufacturers, TDF producers (tire shredders) and TDF users (burners) and
government agencies promote burning TDF as a solution to the dire problem of
waste tires. However, tire incineration under any circumstance creates pollution
that makes the air dangerous to breathe.




The
Company expects its higher value outputs and efficiency of its process will
enable it to effectively compete for waste tires by having a more efficient
business model which may allow it to absorb higher raw material costs if need
be. Of the approximately 290 million waste tires produced in the U.S. nearly two
thirds are shredded then resold by four companies Liberty Tire, Larkin Tires,
Emanuel Tires, and Casing Inc.




The
Company’s competitive advantage in this market is its ability to decompose the
tire and produce by-products such as liquid hydrocarbons, and carbon products in
an efficient and environmentally safe way. The Company’s process is not a
way of disposing of tires but rather a way of reclaiming the raw materials used
in their production.




There are
various organizations using heat derived pyrolysis (thermal pyrolysis) for the
production of oil. There are various organizations developing microwave
pyrolysis at conventional domestic microwave frequency’s. To our knowledge, we
are the only organization using microwave pyrolysis at the frequency required to
produce valuable outputs such as carbon black. Although traditional thermal
peralysis can produce oil and gases from used tires, carbon black is the most
valuable and profitable output component of this process.




1.
            "U.S.
      Scrap Tire Markets 2005," Rubber Manufacturers
      Association, Nov 2006.https://www.rma.org/getfile.cfm?ID=894&type=publication




Research and
Development




Research and development (“R & D”)
costs consist of all activities associated with the development and enhancement
of products using the Company’s Technology.  R & D costs consist
primarily of contract engineer labor and salaries of our in-house engineers, lab
supplies used in testing and expenses of equipment used to test and develop our
Technology. R & D costs for the twelve months ended December 31, 2009 and
2008 were $1,607,395 and $871,622, respectively.  The increase in
research and development costs for the fiscal year ended December 31, 2009 as
compared to the 2008 fiscal year can be attributed to an increase in salary
expenses attributed to five full time R&D employees, an increase in the use
of outside consultants, depreciation expenses attributed to the depreciation of
the prototype machine, Patriot-1, which is depreciated over a three year period
beginning in the first quarter of the 2009 fiscal year and in increase in lab
supplies.




Number of
Employees





As of December 31, 2009 and as of the
date of the filing of this report, we have a total of 14 full-time employees and
13 full-time employees, respectively. We have no part-time employees. The
Company also retains independent contractors to fulfill certain
functions.




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 this information.




17




Item
1B. Unresolved Staff Comments





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.




Item
2. Description of Property.




The
Company leases office space and manufacturing space under several separate lease
agreements that are classified as operating leases.  The Company has
four separate lease agreements. The Company leased lab and office space in New
Jersey under a lease agreement that commenced June 1, 2006, the monthly lease
payments were $5,000 per month and the lease expired on May 31, 2009. The
Company entered into a new lease on May 12, 2009 to rent only a portion of the
current space, for monthly lease payments equal to approximately $1,700 per
month to expire on May 31, 2012. In March of 2010, the Company terminated this
lease, as a result of opening a new research and development lab facility in
North Carolina. On March 25, 2010, the Company entered into a five year lease
agreement for a lab facility and new corporate office headquarters in
Morrisville, North Carolina. Lease payments begin at $13,613 per month and the
lease expires in March of 2015. As a result of the termination of the Company’s
lease for its research and development lab in Berlin, New Jersey, the Company
was assessed a judgment of approximately $47,000 for the remaining balance of
the three year lease. On June 16, 2010, the Company entered into a Settlement
Agreement and Mutual Release (“Bloom Settlement Agreement”) in connection with
the judgment. The terms of the Bloom Settlement Agreement provide that the
Company would pay an aggregate of $24,500 to be paid in installments pursuant to
the terms of the Bloom Settlement Agreement.





The
Company also leased manufacturing space in Rockford, Illinois under a lease
agreement that commenced May 1, 2008 and expired on April 30, 2010, the monthly
lease payments are $2,703 per month and the lease expired on April 30, 2010. In
October 2008, the Company entered into a new lease for new corporate
headquarters office space in New Jersey and a deposit of $47,500 was made in
October 2008. The Company moved into the 5,124 square feet of office space in
March 2009. The lease is for five years with monthly payments beginning at
$6,567 per month and the lease expires in April of 2014. The Company entered
into a new lease for lab and office space in North Carolina in March 2010. The
lease is for five years with monthly payments beginning at $13,613 per month and
the lease expires March 2015. With all leases, the Company is required to pay
property taxes, utilities, insurance and other costs relating to the leased
facilities.




Rent
expenses for the years ended December 31, 2009 and 2008, and for the cumulative
period July 19, 2002 (inception) to December 31, 2009 were approximately
$151,000, $85,000 and $399,000, respectively.





We
believe that our leased facilities are suitable and adequate for our operational
requirements as currently contemplated.





Item
3. Legal Proceedings.




In April
2010, Mr. Jeff Kimberly, the Company’s former President, filed a lawsuit in the
Superior Court of New Jersey in Burlington County against the Company, Brian
Ettinger and Ken Kinsella, the Company’s former Chairman of the Board and Chief
Executive Officer, respectively, for wrongful termination of his employment
contract. Mr. Kimberly is asking for the remaining salary in the amount of
approximately $225,000, and stock options to purchase up to 1,500,000shares of the company’s
Common Stock, allegedly owned to him under his employment contract dated
September 23, 2008. As of the date of the filing of this report, the Company is
in settlement negotiations with Mr. Kimberly.




Except as
otherwise described herein, there are presently no other material pending legal
proceedings to which the Company, any of its subsidiaries, any executive
officer, any owner of record or beneficially of more than five percent of any
class of voting securities is a party or as to which any of its property is
subject, and no such proceedings are known to the Company to be threatened or
contemplated against it.




18




Item
4. Removed and Reserved.




PART
II




Item
5. Market for Common Equity, Related Stockholder Matters and Small Business
Issuer Purchases of Equity Securities.




Market
Information





Our
common stock has been traded over the counter on the Pink Sheets since April
2007. The trading symbol for our common stock is "GBRC."  Prior to
April 2007 our common stock traded on the OTC Bulletin Board.  In
April 2007 our common stock was delisted from the OTC Bulletin Board for failure
to satisfy applicable maintenance criteria. The following table sets forth
quarterly high and low sales prices for the common stock for the periods
presented as reported by the OTC Bulletin Board and, since April 2007, the Pink
Sheets.  We consider our stock to be "thinly-traded" and any reported
sales prices may not be a true market based valuation of the stock.





High
                    
                    
                    Low4th
      Quarter 2009, ended 12/31/09
                    
                    $
                    1.20
                    
                    
                    $
                    0.503rd
      Quarter 2009, ended 9/30/09
                    
                    $
                    1.35
                    
                    
                    $
                    0.772nd
      Quarter 2008, ended 6/30/09
                    
                    $
                    2.00
                    
                    
                    $
                    0.901st
      Quarter 2009, ended 3/31/09
                    
                    $
                    1.41
                    
                    
                    $
                    0.804th
      Quarter 2008, ended 12/31/08
                    
                    $
                    2.25
                    
                    
                    $
                    0.993rd
      Quarter 2008, ended 9/30/08
                    
                    $
                    2.43
                    
                    
                    $
                    0.732nd
      Quarter 2008, ended 6/30/08
                    
                    $
                    4.38
                    
                    
                    $
                    1.761st
      Quarter 2008, ended 3/31/08
                    
                    $
                    3.65
                    
                    
                    $
                    1.46





On
December 21, 2010, the last sale price of our common stock as reported by the
Pink Sheets was $0.21 per share.





Holders





The number of record holders of our
Common Stock, as of December 21, 2010, was approximately 330 based on
information received from our transfer agent.  This amount excludes an
indeterminate number of shareholders whose shares are held in “street” or
“nominee” name.





Dividend
Policy





The Company has not paid any cash
dividends since inception and we do not anticipate or contemplate paying cash
dividends on our Common Stock in the foreseeable future.  It is our
present intention to utilize all available funds for the development of our
business.





On March 11, 2010, the board of
directors of the Company declared a dividend, payable to stockholders of record
on March 11, 2010 (the “Record Date”) and for all shares of Common Stock issued
after the Record Date, of one right (the “Rights”) per each share of the
Company’s outstanding Common Stock, to purchase 1/1,000th of a
share of Series I Preferred Stock, par value $0.001 per share, of the Company at
a price of $100.00 per share (such amount may be adjusted from time to time, in
accordance with the terms and conditions of that certain Rights Agreement, dated
March 11, 2010 (the “Rights Agreement”) by and between the Company and Olde
Monmouth Stock Transfer Co., Inc. as Rights Agent). The Rights Agreement was
filed as Exhibit
4.1 to the Company’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on March 15, 2010 and is incorporated herein by
reference.




19





The Rights are not exercisable until
the earlier of the following dates (each a “Distribution Date”):





(a)          such
date the Company learns that a person or group (including any affiliates or
associate of such person or group) has acquired, or obtained the right to
acquire, beneficial ownership (as defined in the Rights Agreement) of more than
20% of the outstanding Common Stock of the Company (or, in the case of any
person with beneficial ownership of more than 20% at the time the Rights
Agreement is entered into, any additional Common Stock is acquired by such
person (except upon exercise of certain stock options or vesting of restricted
shares) (any person or group specified in the foregoing bullet point, an “Acquiring Person”);
and





(b)          such
date, if any, as may be designated by the Board following the commencement of,
or first public disclosure of an intention to commence, a tender or exchange
offer for outstanding Common Stock which could result in a person or group
becoming the beneficial owner of more than 20% of the outstanding Common Stock
of the Company.





The Rights will expire on March 11,
2013 (the “Expiration Date”), unless earlier redeemed or cancelled by the
Company.




TheRights are redeemable by the
Board at a redemption price of $0.00001 per Right (the “Redemption Price”)
any time prior to the earlier of (i) the Distribution Date and (ii) the
Expiration Date.  Immediately upon the action of the Board ordering
the redemption of the Rights, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.





As of the date of filing, no Rights
have been exercised or become exercisable.





Recent Sales of Unregistered
Securities




Set forth
below is information, as of December 31, 2009, regarding the numbers of shares
of capital stock, options, warrants and convertible debt sold by the Company
during the year ended December 31, 2009 and which were not previously reported
in a Quarterly report on Form 10-Q or in a Current Report on Form 8-K, without
registration under the Securities Act of 1933, as amended (the “Securities
Act”), as well as the consideration received by the Company for such
shares, options, warrants and convertible debt.




Sales of Common Stock and
Warrants





On
October 5, 2009, the Company issued 450,000 shares of its Common Stock to Eric
Swain in compliance with the terms of the Settlement Agreement and Release
entered into between the Company and Mr. Swain on October 2, 2009. The
securities were issued in connection with an exemption from registration
provided by Section 4(2) of the Securities Act.





On
November 30, 2009, the Company issued 300,000 shares of its Common Stock to AGS
Capital Group, LLC, valued at $240,000, pursuant to the terms of the REF
Agreement entered into between the Company and AGS Capital Group, LLC on
November 24, 2009. The securities were issued in connection with an exemption
from registration provided by Section 4(2) of the Securities Act.





On
December 16, 2009, the Company issued and sold 250,000 shares of its Common
Stock to Patrick Doherty for $125,830. The securities were issued in connection
with an exemption from registration provided by Section 4(2) of the Securities
Act.




20




Securities Issued For
Services Provided





The Company issued the following shares
of stock for the provision of services pursuant to an exemption from
registration provided by Section 4(2) of the Securities Act.





Common
Stock





Name
                    
                    Shares Issued
                    
                    Date of Issuance
                    
                    Service Provided
                    
                    ValueWoody
      Fuel Consultants
                    
                    
                    250,000
                    
                    November
      20, 2009
                    
                    Consulting
                    
                    $
                    227,500Corporate
      Results, Inc.
                    
                    
                    250,000
                    
                    November
      25, 2009
                    
                    Consulting
                    
                    $
                    217,500Private
      Capital Group, Inc.
                    
                    
                    500,000
                    
                    December
      16, 2009
                    
                    Consulting
                    
                    $
                    290,000Brian
      Ettinger
                    
                    
                    150,000
                    
                    December
      17, 2009
                    
                    Board
      of Director
                    
                    $
                    87,000Kim
      O’Brien
                    
                    
                    200,000
                    
                    December
      17, 2009
                    
                    Board
      of Director
                    
                    $
                    116,000Jonathan
      Simon
                    
                    
                    200,000
                    
                    December
      17, 2009
                    
                    Board
      of Director
                    
                    $
                    116,000Westerman
      Ball Ederer Miller & Sharfstein, LLP
                    
                    
                    200,000
                    
                    December
      17, 2009
                    
                    Legal
                    
                    $
                    124,000Brian
      Ettinger
                    
                    
                    250,000
                    
                    December
      18, 2009
                    
                    Consulting
                    
                    $
                    145,000Gunnadoo
      Consulting LLC
                    
                    
                    100,000
                    
                    December
      21, 2009
                    
                    Consulting
                    
                    $
                    58,000





Warrants to Purchase Common
Stock





The Company issued the
following warrants for the provision of services pursuant to an exemption
from registration provided by Section 4(2) of the Securities Act.





Name
                  
                  Number of
                    Warrants
                    Issued
                  
                  Date of Issuance
                  
                  Value
                  
                  
                  Exercise
                    Price
                  
                  Expiration DateWoody
      Fuel Consultants
                  
                  
                  100,000
                  
                  November
      20, 2009
                  
                  $
                  54,650
                  
                  
                  $
                  0.85 per
      share
                  
                  November
      20, 2011Corporate
      Results, Inc.
                  
                  
                  100,000
                  
                  November
      23, 2009
                  
                  $
                  52,750
                  
                  
                  $
                  0.85 per
      share
                  
                  November
      23, 2011Peter
      A. Worthington
                  
                  
                  200,000
                  
                  December
      15, 2009
                  
                  $
                  80,000
                  
                  
                  $
                  0.40
      per share
                  
                  April
      7, 2013





Issuer Purchases of Equity
Securities





There were no repurchases of equity
securities by us or any affiliated purchasers during the fourth quarter of the
year ended December 31, 2009.




Item
6. Selected Financial Data




As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.




21




Item
7. Management’s Discussion and Analysis of Financial Condition and Results of
Operation





Overview





Since the
acquisitions of the assets of CRC and Mobilestream in 2006, our business became,
and continues to be: (i) the design, manufacture and sale of machinery and
equipment units, embodying the Technology for decomposing petroleum-based
materials by subjecting them to microwave radiation at specifically selected
frequencies for a time sufficient to at least partially decompose the materials
and focused on specific applications; (ii) the ownership and operation of plants
to use the Technology in conjunction with other investors and (iii) the
formation of joint-venture and licensing relationships with established
companies for exploitation of the Technology.Currently, our efforts are directed
principally to the design, manufacture and sale of machinery and equipment.
Under the Company’s current strategy, the Company’s revenue is likely to be
generated from the development, licensing or sale of our proprietary Technology
and/or design, manufacture and sale of machinery and equipment
units.  For machinery and equipment, sales revenue will be recognized
when the machinery and equipment is shipped, installed and operating
successfully at the destination site.  For licensing agreements,
revenue is recognized when services have been rendered per the terms of the
licensing agreements.




In October 2008, we completed our first
commercial prototype machine that uses our Technology for decomposing tires, the
Patriot-1. The Company will continue to test and refine the features of the
prototype for use with tires and other "feedstocks", i.e. materials that would
be amenable to the Company's Technology. The Company intends to work with
prospective customers to create systems for the manipulation of large amounts of
tires to be processed through a machine.




We have no manufacturing capability of
our own. We have completed a prototype machine, Patriot-1 and this
prototype machine is being tested initially to apply our microwave Technology to
the decomposition of tires as waste and to retrieve commercially viable
components there from in the form of carbon, liquid hydrocarbons which can be
converted to electricity, and gas. We will use our prototype primarily to
confirm and refine the principles that will be utilized in commercial scale
operations of our Technology. We also will use it to test various feedstocks,
materials that can benefit from the application of our Technology, prior to
releasing processes for production. The prototype will also be used on a limited
basis to show customers that the process works as applied to a specific
feedstock and is viable for commercialization.




We do not intend to research nor
represent to potential customers the commercial uses or revenues they may derive
from the end-products generated using our Technology. Each potential customer
will be expected to evaluate for itself whether the commercialization and
disposition of the end products justifies the cost to purchase and install one
of our machines.




Results Of
Operations




Results of Operations for the Years
Ended December 31, 2009 compared to December 31, 2008




(A)              REVENUES




The Company earned $180,000 in revenues
from operations for the year ended December 31, 2009 and had no revenues for the
year ended December 31, 2008.  Revenue recorded for the 2009 fiscal
year was derived from a Joint Development Agreement executed as of April
23, 2009 (the “JDA”).  See “Joint Development Agreement” above for
details.  Pursuant to the JDA, we received $300,000 on May 22, 2009
which was recorded as deferred revenue in the condensed consolidated balance
sheet.  Revenue is recognized when services have been
rendered.  As of December 31, 2009, a balance of $120,000 remains in
the deferred revenue account on the consolidated balance sheet.




Prior to September 2009, we had no
revenues from operations since the closing of the acquisitions of the assets of
Carbon Recovery Corporation in September 2006 and Mobilestream Oil, Inc. in
December 2006.




(B)   TOTAL
OPERATING EXPENSES




Total operating expenses consist of
professional fees, investor relations and investment banking fees, other general
and administrative expenses, and research and development
costs.  Total operating expenses were $14,146,611 for the twelve
months ended December 31, 2009 compared to $24,132,280 for the twelve months
ended December 31, 2008, a decrease of approximately $9,985,669 or approximately
41%.


22




Changes in General and Administrative
Expenses versus the prior year were the following:




For the fiscal year ended December 31,
2009 our general and administrative expenses decline approximately $10.7 million
dollars for a total of approximately $12,539,000, as compared to approximately
$23,261,000 for the fiscal year ended December 31, 2008. This significant
reduction was primarily due to a reduction in our investment banking fees,
investor relations and professional fees associated with the raise of capital.
The Company has recorded expenses for investment banking fees, investor
relations, and professional fees broadly to include expenses incurred for
ancillary activities and expenses for penalties and settlements related to
professional services, investment banking and public relations activities. Total
professional fees and investment banking fees and investor relations expenses
were approximately $16.3 million dollars for the twelve months ended December
31, 2008 compared to approximately $700,000 for the twelve months ended December
31, 2009, a decrease of approximately $15.6 million dollars.  The
Company issued 7,014,849 shares of common stock for services performed or to be
performed by non-employees, valued in the amount of $13.7 million dollars,
mainly for investment banking fees, investor relations and professional fees in
the fiscal year 2008. The Company issued minimal shares in the fiscal year 2009
which is the primary reason for the decline of approximately $15.6 million
in investment banking fees, investor relations and professional fees for the
twelve months ended December 31, 2009. The value of services was determined
based upon the stock market price at the date the stock was
issued.  Other changes in professional fees were as follows: a
decrease in legal fees of approximately $275,000, to approximately $563,000 for
the twelve months ended December 31, 2009 versus $838,000 in
2008.  Accounting fees increased from approximately $273,000 for
fiscal year 2008 to approximately $661,000 in fiscal year 2009, an increase of
approximately $388,000.  The significant increase in accounting fees
are due to the additional audit work needed to be performed by our auditors as a
result of the Company filing a Current Report on Form 8-K on April 2, 2009,
concerning non-reliance on previously issued financial statements.




Other general and administrative
(“other G&A”) expenses were approximately $6,303,000 for the twelve months
ended December 31, 2009 compared to $5,854,000 for the twelve months ended
December 31, 2008, an increase of approximately $449,000 or 7.7%
increase.  The increase in other G&A expenses for fiscal year
ended December 31, 2009 was due to the following:  (a) The total
salary & wages related expenses increased approximately $347,000, and direct
salary expenses increased approximately $260,000 because of addition of
employees, including the new Company CEO,  (b) Severance expenses
increased approximately $748,000 for the fiscal year 2009, to approximately $2.5
million dollars versus severance expenses in the amount of approximately $1.2
million dollars for the agreement that was reached with former CEO, Frank
Pringle and an expense of $1.2 million dollars was recorded in 2008; (c) an
expense of $560,000 was recorded in 2008 for indemnification costs due to the
potential expense of reimbursing Eric Swain, the Company’s new CEO, for expenses
related to Mr. Swain’s early termination of his employment with his prior
employer, Morgan Stanley;  (d) travel and entertainment was
approximately $278,000 for the fiscal year ended December 31, 2009, as compared
to approximately $192,000 for the fiscal year ended December 31, 2008, an
increase of approximately $86,000, mainly due to increased travel to the
production facility in Rockford, Illinois; (e)  payment to members of
the board of directors in the form of stock warrants began in 2008 and for the
twelve months ended December 31, 2009, the Company recorded expenses in the
amount of approximately $81,000, for compensation to Board of directs as
compared to approximately $113,000 for the twelve months ending December 31,
2008 and  (f)  rent costs increased approximately $90,000
for the twelve months ending December 31, 2009 as compared to the same period in
2008,  mainly due to an the new corporate headquarters in Mount
Laurel, New Jersey.




Research
and development (“R & D”) costs consist of all activities associated with
the development and enhancement of products using the Company’s
Technology.  R & D costs consist primarily of contract engineer
labor and salaries of our in-house engineers, lab supplies used in testing and
expenses of equipment used to test and develop our
Technology.   Research and development costs are expensed when
incurred.   R & D costs for the twelve months ended December
31, 2009 and 2008 were $1,607,395 and $871,622, respectively.  The
increase of $735,773 as compared to prior fiscal year can be attributed to the
following: Salary expenses increased approximately $479,000 for the full year
impact of five full time R&D employees, the use of outside consultants
increased approximately $155,000 versus the prior year, depreciation expense
increased approximately $308,000, mainly for the depreciation of the prototype
machine, Patriot-1, which is being depreciation over a three year period
beginning in first quart 2009, and lab supplies increased approximately $147,000
which were offset by a $350,000 decline in machine parts write-off taken in the
fiscal year 2008.


23




(C)
OPERATING LOSS




Operating loss for the year ended
December 31, 2009 was $13,966,611 compared to $24,132,280 for the year ended
December 31, 2009. The decrease in operating loss for the year ended December
31, 2009 of $10,165,669 was mostly attributable to the decrease in general and
administrative expenses as described above in paragraph (B) offset by the
increase in research and development expenses as well as the revenue from the
Joint Development Agreement. The operating loss from July 19, 2002 (inception)
to the year ended December 31, 2009 was $55,450,021 which was mostly
attributable from the general and administrative expenses with virtually no
offsetting revenue for this period.




(D)  OTHER
INCOME (EXPENSE)




Interest expense, interest income,
realized gains / (losses), change in fair value of derivative financial
instruments and other income are included in Other Income
(Expense).  Total other income was $1,674,507 for the twelve months
ended December 31, 2009 compared to other income of $8,636,931 for the twelve
months ended December 31, 2008, the decrease of $6,962,424 is primarily due to
the fair value change in the derivative financial instruments.




Interest expense for the twelve months
ended December 31, 2009 was $13,806 compared to $17,981 for the twelve months
ended December 31, 2008, a decrease of $4,175.  The 2009 lower
interest expense is the result of certain Company loans nearing
maturity.




Interest income for the twelve months
ending December 31, 2009 and 2008 was $116,506 and $185,025, respectively. The
twelve months’ decrease of $68,519 or 37% in interest income is attributed to
the Company having to use its surplus of cash for operation in fiscal year 2009.
In fiscal year ended December 31,2008 the Company had a surplus of cash as a
result of sales of common stock to investors. In April of 2008, $4,000,000 of
surplus cash was invested in short term investments.  Due to the
decline in the stock market in the fourth quarter of 2008 the Company
reclassified $837,850 on unrealized losses on its investments in preferred stock
to realized losses, as the impairment was deemed to be other than temporary at
December 31, 2008.  The Company liquidated all short-term investments
and recognized realized losses associated with these transactions in the amount
of $20,027 for the twelve months ended December 31, 2009.




At December 31, 2009 the change in the
fair value of derivative financial instruments resulted in income of $1,591,834
in 2008 versus income of $9,358,836 in 2008, for a change of
$7,767,002.




Other expenses for the twelve months
ending December 31, 2009 and 2008 were $0.0 and $7,181
respectively.




(E)   NET
LOSS




The net loss for the twelve months
ended December 31, 2009 was $12,292,104 ($0.19 per share) compared to
$15,495,349 ($0.33 per share) for the twelve months ended December 31, 2008, a
change of $3,203,245.  The Company continues to incur loses losses are
attributable to very little revenue stream, and the Company is still in
development stage.  The Company’s expenses have increased
significantly as a result of non-cash charges related to expenses for investment
banking, investor relations and public relations services as payments were made
by the issuance of common stock for such services rendered during the fiscal
year ended December 31, 2008. As a development stage company that began
operations in 2002, the Company has incurred $42,062,378 in cumulative total net
losses from inception through December 31, 2009.




24




OPERATING
ACTIVITIES


Net cash used in operating activities
was approximately $4,867,000 for the twelve months ended December 31, 2009
compared to approximately $5,175,000 for the twelve months ended December 31,
2008, a decrease of approximately $308,000. This $4.9 million and $5.2 million
use of cash is a result of operating expenses incurred for the fiscal years
ended December 31, 2009 and 2008, respectively. As a development stage company
that began operations in 2002, the Company has used net cash in operating
activities of approximately $17,411,366 from inception through December 31,
2009.




INVESTING
ACTIVITIES




Net cash provided by investing
activities was $2,059,648 for the twelve months ended December 31, 2009 and net
cash used in investing activities was $4,691,496 for the twelve months ended
December 31, 2008. Cash provided by investing activities for fiscal year 2009
was mainly the proceeds from the sales of the Company’s short-term investments.
For the fiscal year 2008 the cash used for investing activities was (a) the
purchases of marketable securities in amounts of $4 million dollars and (b)
purchases of materials in the amount of approximately $930,000 for construction
of our prototype machine.




LIQUIDITY
AND CAPITAL RESOURCES




As of December 31, 2009, the Company
had total current assets of $617,870 and total current liabilities of
$2,194,832, resulting in negative working capital of $1,576,962. At December 31,
2009, the Company's current assets consisted of $40,620 in cash and $577,250 in
prepaid services. As a development stage company that began operations in 2002,
the Company has incurred $42,062,378 in cumulative total net losses from
inception through December 31, 2009.




As of December 31, 2009, the Company
had only $40,620 in cash and cash equivalents.  The Company projects
total cash expenditures needed for the next twelve months ending December 31,
2010 of approximately $3.5 million (operating expenses of approximately $3.2
million and capital expenditures of approximately $0.3 million).  The
Company has taken extreme measures in reducing operating expenses, particularly
payroll expenditures by reducing salaries and by cutting staff to bare
minimum.  Our actual operations will be affected by reduction in our
payroll and staff related matters. These reductions will impact our timetables
for experimentation and testing trials.  Technological or engineering
difficulties are being solved by use of outside consultants. Due to the fact
that the Company incurred substantial net losses for the cumulative period from
July 19, 2002 (inception) to December 31, 2009 and that it currently has only a
small revenue stream to support itself, there is doubt about the Company’s
ability to continue as a going concern.




The Company has been successful in
obtaining the required cash resources by issuing stock to service some of the
Company's operations through the twelve months ended December 31, 2009 and
2008.  Net cash provided by financing activities was $834,115 for the
year ended December 31, 2009 compared to net cash provided by financing
activities of $11,099,837 for the year ended December 31, 2008, a reduction
change of $10,265,722. This decline was primarily the result of the decline in
the sales of common stock. During the twelve months ended December 31, 2008, the
Company sold 13,195,925 shares of common stock for gross proceeds of $12,892,731
as compared to only 250,000 shares of common stock for gross proceeds of
$125,830 for the twelve months ended December 31, 2009. Subsequent to the year
ended December 31, 2009, between January 1, 2010 and June 15, 2010 the Company
has sold 2,170,297 shares of its common stock for $722,535 in cash.




In addition to the sale of common stock
also between January 1, 2010 and June 15, 2010 the Company has received
approximately $1.2 million dollars in cash in exchange for numerous convertible
promissory notes payable. These convertible promissory notes payable can be
converted into our Series A Preferred Stock at a conversion prices of
approximately $0.24 per share, the notes have a maturity date of May 31, 2011,
none of the promissory notes have be converted to preferred stock as of the
issuance of these Consolidated financial Statements, 2010.




The Company has continued to issue
stock or options or warrants to various vendors (non-employees) as payments for
services rendered. For the twelve months ended December 31, 2009, the Company
issued 2,449,000 shares of common stock in payment of services valued at
$2,286,050. In the twelve months ended December 31, 2008, the Company issued
7,714,849 shares of common stock in payment of services valued at
$15,590,215, including 650,000 common stock shares granted to an investor
as part of a non-compliance clause in the contract with that
investor.  The grant of common stock was recorded as expense to the
consolidated statement of operations and comprehensive loss in the amount of
$1,358,500.  Warrants issued for services were valued using the
Black-Scholes option-pricing model, with expected volatility ranging from 115%
to 168%, risk-free interest rate ranging from .78% to 2.89% and expect life a
half year to five years.   For the fiscal year ended December 31,
2008, the Company also granted 9,537,782 warrants with an average excise price
of $2.00 in conjunction with the sale of common stock in a private
placement.  Since these warrants were part of the purchase agreement
they had no impact on the Company’s profit or loss.


25




For the twelve months ended December
31, 2009, the Company granted 3,000,000 common stock options to the
Chief Executive Officer for services to be provided, and the Company
recorded an expense of approximately $71,600 in the fiscal year ended December
31, 2009 to the consolidated statement of operation and comprehensive loss. Such
options were cancelled in November of 2010. For the twelve months ended December
31, 2008, the Company authorized the grant of 8,950,000 common stock options to
employees for services to be rendered or to be performed.




In September 2008, pursuant to a
Summary of Terms of Proposed Employment Agreement with Eric Swain, the Company’s
new CEO, and as part of a series of employment term sheets, the Company
authorized the grant of a total of 8,500,000 stock options to four key
executives.  5,000,000 of those stock options were granted to the
Company’s new CEO, Eric Swain.  The other 3,500,000 stock options were
granted to three other officers of the Company and were subject to stockholder
approval of an amendment to the Company’s stock option plan increasing the
number of authorized shares available for issuance under the
plan.  All of these options have an exercise price of
$1.18.  1,000,000 of Mr. Swain’s options vested immediately and the
balance will vest in equal annual installments of 1,000,000 options on September
23, 2009 and on each anniversary thereafter for the three years
thereafter.  Of the combined 3,500,000 options granted to the three
other executives, one-fifth of those options will vest immediately upon approval
of the amendment of the Company’s stock option plan and the remainder will vest
one-fifth on September 23, 2009 and an additional one-fifth on each anniversary
thereafter for the next three years, provided that the executives are employed
by the Company at each vesting date. As of December 31, 2008, total unrecognized
compensation cost related to unvested stock options for the CEO’s options is
approximately $4,160,000, which is to be recognized over the expected term of
five years. The assumptions used in the Black-Scholes option-pricing model used
to determine the fair value of the options are: a dividend yield of 0%; an
expected volatility rate of 123.5%; a risk-free interest rate of 2.93%; and an
expected life of approximately six years. Expected forfeitures were estimated to
be 0%.  No compensation expense was recorded for the 3,500,000 options
awaiting stockholders approval during the year ended December 31, 2008 because
options under an arrangement that is subject to stockholder approval are not
deemed to be granted until that approval is obtained unless approval is
essentially a formality which the Company has deemed not to be the case. No
expense was recorded as of December 31, 2009 for options awaiting stockholders
approval since they are not deemed to be granted until that approval is obtained
unless approval is essentially a formality which the Company has deemed not to
be the case.  For Mr. Swain’s options still to be delivered, the liability
was revalued to its fair value at December 31, 2009 and the compensation expense
was reduced by $568,000 in the financial statements. The expenses recorded were
valued using the present value of expected future outflows. Subsequent to year
end December 31, 2009 the Swain Severance Agreement was amended on January 26,
2010, the remaining 1.2 million shares of its registered common stock to be
issued on future dates in 2010 and 2011 was replaced by issuing Mr. Swain 1.4
million shares of its restricted common stock subject to SEC rule 144 on January
27, 2010.




On
February 9, 2010, the company agreed to exchange the 1,000,000 shares of the
Company’s Common Stock previously granted to Mr. Jeffrey Andrews, (former CFO)
exercisable at $1.18 per share, of which the option to purchase 400,000 shares
had already vested, subject to stockholder approval of an amendment to the plan
pursuant to which they were issued, was replaced with a Warrant to purchase
1,000,000 shares of the Company’s Common Stock at $1.18 per share, of which
400,000 is immediately exercisable and the remainder of which is exercisable on
January 31, 2011, except that the Warrant will become immediately exercisable in
full in the event that the Company terminates the Consulting Services Agreement
at any time or Mr. Andrews terminates the Consulting Services Agreement after
six months.  The Warrant expires on January 31, 2013.




26


On April 27, 2009, with the retirement
of Mr. Wayne Koehl, 600,000 of his options still waiting stockholders’ approval
were cancelled. Of the combined 2,900,000 options granted to Mr. Koehl and the
two other executives, one-fifth of these options will vest immediately upon
approval of the amendment of the Company’s stock option plan, and the remainder
are scheduled to vest one-fifth on September 23, 2009, and an additional
one-fifth on each anniversary thereafter, for the next three years, provided
that the executives are employed by the Company at each vesting date, or the
options are subject to the terms of a retirement or severance agreement. On
February 4, 2010 the Company entered into an agreement to exchange previously
granted employee stock options which were subject to shareholders approval for
Company warrants. Mr. Koehl was issued 400,000 warrants with an exercise price
of $1.18 per share in exchange for the 400,000 options, these warrants are
exercisable immediately and have an expiration date of December 31,
2018.




On
February 19, 2009, the Company authorized 75,000 common stock options to an
employee. These options have an exercise price of $1.27, and expire on
February 19, 2019. The option vest one-third on the one year anniversary of
the grant date, one-third on the two year anniversary of the grant date
one-third on the three year anniversary of the grant date. These options
were granted under the Company’s 2008 Incentive Stock Option Plan, as amended,
and are subject to stockholders’ approval of an Amendment to the Plan,
increasing the number of shares available for issuance. No expense has yet to be
recorded for the unapproved options.




On January 29, 2009, the Company
authorized 35,000 common stock options to staff employees. These options
have an exercise price of $1.02, an expiration date of ten years from grant date
and become fully vested on July 1, 2009. These options were granted under
the Company’s 2008 Incentive Stock Option Plan, as amended and are subject to
stockholders’ approval of an Amendment to the Plan, increasing the number of
shares available for issuance. No expense has yet to be recorded for the
unapproved options.




In November 2008, the Company
authorized the grant of 450,000 stock options to three employees which are also
subject to stockholder approval of an amendment to the Company’s stock option
plan increasing the number of authorized shares available for issuance under the
plan.  These options have an exercise price of $1.24 per share and
expire on November 21, 2018.  150,000 options vest immediately upon
stockholder approval of the stock option plan amendment, 150,000 vest on January
1, 2010, and the remainder vest on January 1, 2011.  The assumptions
used in the Black-Scholes option-pricing model used to determine the fair value
of the options are: a dividend yield of 0%; an expected volatility rate of
159.5%; a risk-free interest rate of 2.12%; and an expected life of
approximately six years. Expected forfeitures were estimated to be
0%.  No expense was recorded for the unapproved options during the
year ended December 31, 2008.




CAPITAL
RESOURCES




(A)   LONG-TERM
DEBT OBLIGATIONS




The Company entered in two loan
agreements for the purchase of equipment.  The principal amount of a
five year loan entered into in January 2006 is $75,000 with an interest rate of
13.43% annually and a monthly payment of $1,723.  In October 2006 the
Company entered into second loan with a principal amount of $73,817 at an
interest rate of 8.71% annually and was fully paid as of December 31,
2009.  The total remaining loan payments including interest is
approximately $19,000.




(B)   CAPITAL
LEASES




The Company leases certain phone and
computer equipment under an agreement that is classified as a capital lease. The
cost of equipment under capital leases is included in the balance sheets as part
of property and equipment. The monthly lease payments are $1,293 per month,
until June 2011.  The total future minimum lease payments are
$19,408.




27




(C)   OPERATING
LEASES


The Company has four separate lease
agreements. The Company leases two separate facilities in New Jersey. (i)
The lab and office space in New Jersey under a lease agreement that commenced
June 1, 2006, the monthly lease payments were $5,000 per month and the lease
expired on May 31, 2009. The Company entered into a new lease on May 12, 2009 to
rent only a portion of the current space, the monthly lease payments are
approximately $1,700 per month and the lease expires on May 31, 2012. (ii) The
Company also leases manufacturing space in Rockford, Illinois under a lease
agreement that commenced May 1, 2008, the monthly lease payments are $2,703 per
month and the lease expires on April 30, 2010. (iii)In October 2008, the Company
entered into a new lease for new corporate headquarters office space in New
Jersey, and a deposit of $47,500 was made in October 2008. The Company moved
into the 5,124 square feet of office space in March 2009. The lease is for five
years with monthly payments beginning at $6,567 per month and the lease expires
April 2014. (iv) The Company entered into a new lease for lab and office space
in North Carolina in March 2010. The lease is for five years with monthly
payments beginning at $13,613 per month and the lease expires March 2015. With
all leases, the Company is required to pay property taxes, utilities, insurance
and other costs relating to the leased facilities. In March of 2010, as a result
of the new North Carolina new lab facility, the Company terminated the lease for
the current R&D lab in Berlin, New Jersey, the Company was assessed a
judgment of approximately $47,000 for the remaining balance of the three year
lease and the Company is currently in settlement negotiation with lease
holder




Rent expense for the years ended
December 31, 2009 and 2008, and for the cumulative period July 19, 2002
(inception) to December 31, 2009 was approximately $151,000, $85,000 and
$399,000, respectively. The total future minimum annual lease payments are
approximately $1,278,000.




(D)   PURCHASE
OBLIGATIONS




In June 2007, the Company entered into
a purchase agreement with Ingersoll Production Systems of Rockford, Illinois to
build a commercial prototype machine. The total purchase commitment was
originally approximately $770,000.  The Company has paid approximately
$1,200,000 as of December 31, 2009 under this agreement.  This amount
is reflected in the accompanying 2008 consolidated balance sheet as part of the
construction in progress component of property and equipment, and, to the extent
of modifications to the prototype machine being made, in the accompanying 2008
consolidated statement of operations as R & D expense.  In
addition to the agreement with Ingersoll Production Systems, there are various
other suppliers with which the Company has purchase commitments, all commitments
related to the prototype machine have been accrued and expense as of the fiscal
year ended December 31, 2009.




OFF
BALANCE SHEET ARRANGEMENTS




We do not have any off-balance sheet
guarantees, interest rate swap transactions or foreign currency contracts. We do
not engage in trading activities involving non-exchange traded
contracts.




CRITICAL
ACCOUNTING POLICIES AND ESTIMATES




The discussion and analysis of our
financial condition and results of operations are based on our consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
consolidated financial statements requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities and expenses and related
disclosure of contingent assets and liabilities.  Certain critical
accounting policies requiring significant judgments, estimates and assumptions
are detailed below.  We consider an accounting estimate to be critical
if (1) it requires assumptions to be made that are uncertain at the time
the estimate is made and (2) changes to the estimate or different
estimates, that could have reasonably been used, would have materially changed
our consolidated financial statements.




Development Stage
Company




The Company is considered to be in the
development stage as defined the Financial Accounting Standards Board (“FASB”)
in accordance with Accounting Standards Codification (“ASC”), 915-205-45 "Accounting and Reporting by
Development Stage Enterprises"




Short-term
Investments




Cash in excess of operating
requirements is invested in marketable debt and equity securities, all of which
are classified as available for sale, and are carried at their fair
value.  The unrealized gains or losses of these investments, which are
deemed to be temporary in nature are recorded as part of accumulated other
comprehensive income (loss) in the consolidated statement of stockholders’
equity. Realized gains or loss and declines in value judged to be
other-than-temporary on these investments are recognized as realized gains or
losses in the consolidated statements of operations and comprehensive
loss.  As of December 31, 2008, the Company has reclassified a
significant amount of unrealized losses from the consolidated statement of
stockholders’ equity to the consolidated statement of operations and
comprehensive loss as realized losses due to the probability that the
Company may not get any new significant inflows of cash, and for the year
ended December 31, 2009, will have liquidated all of the short term investments
and recognized realized losses associated with these
transaction.


28




Patents




Legal fees associated with patents,
which are expected to be issued are recorded as prepaid patent costs on the
accompanying consolidated balance sheets.  Upon approval by the
relevant patent office, the prepaid patent costs will be reclassified to an
intangible asset, and amortized over the expected life of the
patent.  The value of the patent(s) will be reviewed each year for
possible impairment and expensed in the year it is determined that a write-down
in the value of the patent is required.  Prepaid patent costs
associated with patents which are not approved or abandoned are expensed in the
period in which such patents are not approved.




Research and Development
Costs




The
Company complies with the accounting and reporting requirements of SFAS No. 2,
“Accounting for Research and
Development Costs (as amended)”.Research and development (“R
& D”) costs consist of all activities associated with the development and
enhancement of products using the Company’s microwave technology.  R
& D costs consist primarily of contract engineer labor and salaries of our
in-house engineers, lab supplies used in testing and expenses of equipment used
to test and develop our Technology.   R & D costs are
expensed when incurred. The amounts charged to operations for the years ended
December 31, 2009 and 2008, and for the cumulative period July 19, 2002
(inception) to December 31, 2009 were $1,607,395, $871,622 and $2,888,434,
respectively.




Stock-Based
Compensation




Effective January 1, 2006, the Company
adopted FASB ASC No. 718, “Share-Based Payment,”
requiring the expense recognition of the estimated fair value of all share-based
payments issued to employees. Prior to this, the estimated fair value associated
with such awards was not recorded as an expense, but rather was disclosed in a
footnote to the Company’s consolidated financial statements. The compensation
cost associated with these awards is recorded as an expense within the same
functional expense category as cash compensation for the respective grantee. No
tax benefit has been recognized with respect to this expense.




The valuation of employee stock options
and warrants is an inherently subjective process since market values are
generally not available for long-term, non-transferable employee stock options
and warrants. Accordingly, an option pricing model is utilized to derive an
estimated fair value. In calculating the estimated fair value of its stock
options and warrants, the Company used a Black-Scholes pricing model which
requires the consideration of the following seven variables for purposes of
estimating fair value:





            the
      stock option or warrant exercise
price,





            the
      expected term of the option or
warrant,





            the
      grant date fair value of our common stock, which is issuable upon exercise
      of the option or warrant,





            the
      expected volatility of our common
stock,





            expected
      dividends on our common stock (we do not anticipate paying dividends for
      the foreseeable future),





            the
      risk free interest rate for the expected option or warrant term,
      and





            the
      expected forfeiture rate




Of the variables above, the selection
of an expected term and expected stock price volatility are the most subjective.
Our estimate of the expected term for options and warrants awarded in the year
ended December 31, 2009 was between six-months and five years and was derived
based on the weighted average of the sum of the vesting term and the original
contract term at the date of issuance. In estimating its stock price volatility,
the Company analyzed its historic volatility for a period equal to the expected
term of its stock options and warrants awarded for the year ended December 31,
2008, by reference to actual stock prices during this period and calculated an
estimated volatility between 117% to 159%.  The Company believes that
each of these estimates, including both expected term and volatility, is
reasonable in light of the data it has analyzed. However, as with any estimate,
the ultimate accuracy of these estimates is only verifiable over time. The
specific valuation assumptions noted above were applied to stock options and
warrants that the Company granted subsequent to its adoption of ASC No. 718. The
Company expects that share-based compensation expense will continue to have a
material impact on its financial results for all subsequent fiscal
years.


29




Prior to January 1, 2006, the Company
accounted for its stock-based compensation using the intrinsic value method of
accounting under the provisions of Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued
to Employees”(“APB No. 25”). The Company’s stock-based compensation
awards have generally been granted with an exercise price equal to the estimated
fair value of the underlying common stock on the grant date, and accordingly,
any stock-based compensation related to stock option grants was not material
under APB No. 25. The Company applied the disclosure provisions under ASC No.
718, “Accounting for
Stock-Based Compensation” and related interpretations as if the fair
value had been applied in measuring compensation expense.




The effect on the Company’s net loss as
if the Company had applied the fair value recognition provisions of ASC No. 718
to stock-based compensation during the cumulative period July 19, 2002
(inception) to December 31, 2009 was not material.




On
January 1, 2006, the Company adopted the provisions of ASC No. 718 using the
modified prospective transition method. The total expense associated with
stock-based employee compensation was approximately $2,276,000 for the year
ended December 31, 2009, and $1,040,000 for the year ended December 31, 2008 and
$3,316,000 for the period July 19, 2002 (inception) to December 31,
2009.




For non-employees, stock grants and
stock issued for services are valued at either the invoiced or contracted value
of services provided, or to be provided, or the fair value of stock at the date
the agreement is reached, whichever is more readily
determinable.  Warrants or options issued for services provided, or to
be provided, are valued at fair value at the date the agreement is
reached.




Earnings
(Loss) Per Share of Common Stock




The Company complies with the
accounting and reporting requirements of FASB ASC No. 260, “Earnings Per
Share”.   Basic loss per share is calculated by dividing
net loss attributable to common shares by the weighted average number of
outstanding common shares for the period.  Diluted earnings per common
share includes dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants and the conversion of
convertible preferred stock.




Unexercised common stock options and
warrants to purchase common stock, and preferred stock convertible into common
stock as of December 31, 2009 and 2008 respectively, are as
follows:




2009
                                    
                                    
                                    2008Options
                                    
                                    
                                    6,200,000
                                    
                                    
                                    
                                    5,200,000Warrants
                                    
                                    
                                    22,500,836
                                    
                                    
                                    
                                    21,425,795Convertible
      Preferred Stock
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,500Total
                                    
                                    
                                    28,700,836
                                    
                                    
                                    
                                    26,628,295




The foregoing common stock equivalents
were excluded from the calculation of diluted net loss per common share because
their inclusion would have been anti-dilutive as of December 31, 2009 and
2008.


30


Derivative Financial
Instruments




The Company accounts for financial
instruments that are indexed to and potentially settled in, its own stock in
accordance with the provisions of Emerging Issues Task Force (“EITF’) No. 00-19,
“Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in  a
Company’s Own
Stock”.  These financial instruments include freestanding
warrants and options to purchase the Company’s common
stock.   Under certain circumstances that would require the
Company to settle these equity items in cash, and without regard to probability,
EITF No. 00-19 would require the classification of all or part of the item as a
liability and the adjustment of that reclassified amount to fair value at each
reporting date, with such adjustments reflected in the Company’s consolidated
statements of operations.




Revenue
Recognition




The
Company recognizes revenues in accordance with the guidance in the Securities
and Exchange Commission (“SEC”) Staff Accounting Bulletin No.
104. Accordingly, revenue is recognized when persuasive evidence of an
arrangement exists, when the selling price is fixed or determinable, when
shipment or delivery or performance of services has been rendered and
collectability is reasonably assured.




Under the Company’s current strategy,
its revenue is likely to be generated from the development, licensing or sale of
our proprietary Technology and/or design, manufacture and sale of machinery and
equipment units. For machinery and equipment sales revenue will be
recognized when the machinery and equipment is shipped, installed and operating
successfully at the destination site. For a licensing agreement, revenue is
recognized when services have been rendered per the terms of the licensing
agreement.




For the year ended December 31, 2009
all of the Company’s revenues were generated from a licensing
agreement.




Recent
Accounting Pronouncements




For information regarding recent
accounting pronouncements and their effect on the Company, see “Recent
Accounting Pronouncements” in Note 2 to the consolidated financial
statements.




Contractual
Obligations





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.




Item
7A. 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
this information.




Item
8. Financial Statements and Supplementary Data.





Audited financial statements begin on
the following page of this report.


31


GLOBAL
RESOURCE CORPORATION




INDEX
TO FINANCIAL STATEMENTS





PageReports
      of Independent Registered Public Accounting Firms
              
              F-2Consolidated
      Financial Statements:Consolidated
      Balance Sheets
              
              F-5Consolidated
      Statements of Operations and Comprehensive loss
              
              F-6Consolidated
      Statements of Changes in Stockholders' Equity (Deficit)
              
              F-7Consolidated
      Statements of Cash Flows
              
              F-13Notes
      to Consolidated Financial Statements
              
              F-14


F-1




REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors and
 Stockholders
of Global Resource Corporation and Subsidiaries
 Morrisville,
North Carolina
 
 We have
audited the accompanying consolidated balance sheet of Global Resource
Corporation and Subsidiaries (collectively, the “Company”) (a development-stage
company), as
of December 31, 2009, and the related consolidated statements of operations and
comprehensive loss, stockholders’ equity (deficit), and cash flows for the year
then ended, and for the period from inception, July 19, 2002, through December
31, 2009. These consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. The Company’s consolidated
statement of operations and comprehensive loss, stockholders’ equity (deficit)
and cash flows for the period from inception, July 19, 2002, through December
31, 2008, were audited by other auditors whose report dated June 15, 2009,
includes an explanatory paragraph regarding substantial doubt about the
Company’s ability to continue as a going concern. Our opinion on the
consolidated statements of operations, stockholders’ equity and cash flows,
insofar as it relates to the amounts included for the period from July 19, 2002
through December 31, 2008, is based solely on the report of other
auditors.
 
 We
conducted our audit 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
consolidated 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 audit 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 consolidated 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
audit provides a reasonable basis for our opinion.
 
 In our
opinion,
based on our audit, and the report of other auditors, the consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of Global Resource Corporation and Subsidiaries as of
December 31, 2009, and the results
of their operations and their cash flows for the year then ended, and from the
period from inception, July 19, 2002, through December 31, 2009, in conformity
with accounting principles generally accepted in the United States of
America.
  F-2
  The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company is a development stage company,
which presently generates minimal operating revenues, has suffered recurring
losses, has a significant deficit accumulated during its development stage, and
requires substantial additional funds to complete development of its products
and continue operations. These factors raise substantial doubt about the
Company’s 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.
 
 CHERRY,
BEKAERT & HOLLAND, L.L.P.
 
 /s/
Cherry, Bekaert & Holland, L.L.P.
 
 Raleigh,
North Carolina
 December
27, 2010
  F-3
  Report of
Independent Registered Public Accounting Firm
 
 To the
Audit Committee of
 Global
Resource Corporation
 
 We have
audited the accompanying consolidated balance sheet of Global Resource
Corporation (a development stage company) (the “Company”) as of December 31,
2008 and the related consolidated statements of operations and comprehensive
loss, stockholders’ equity (deficit), and cash flows for the year ended December
31, 2008, and for the period from July 19, 2002 (inception) to December 31,
2008. These consolidated financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these consolidated 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 audits 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 financial statements referred to above present fairly, in all
material respects, the consolidated financial position of the Company as of
December 31, 2008, and the results of their consolidated operations and cash
flows for the year ended December 31, 2008 and the period from July 19, 2002
(inception) to December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has sustained net losses for the year ended
December 31, 2008, and for the period from July 19, 2002 (inception) to December
31, 2008 and currently does not have any significant revenue to fund future
operations, which raises 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.
  Rothstein,
      Kass & Company, P.C./s/
      Rothstein, Kass & Company, P.C.
 
 Roseland,
New Jersey
 June 15,
2009
  F-4





Global
Resource Corporation
 (A
Development Stage Company)
 Consolidated  Balance
Sheets
 December
31,  2009 and 2008


2009
                                            
                                            
                                            2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                            
                                            $
                                            40,620
                                            
                                            
                                            $
                                            2,013,730Short-term
      investments
                                            
                                            
                                            -
                                            
                                            
                                            
                                            2,557,274Prepaid
      services
                                            
                                            
                                            577,250
                                            
                                            
                                            
                                            1,508,875Total
      current assets
                                            
                                            
                                            617,870
                                            
                                            
                                            
                                            6,079,879Property
      and equipment, net of depreciation
                                            
                                            
                                            1,430,201
                                            
                                            
                                            
                                            1,358,299OTHER
      ASSETSDeposits
                                            
                                            
                                            124,330
                                            
                                            
                                            
                                            123,726Patents
                                            
                                            
                                            79,203Prepaid
      patent costs
                                            
                                            
                                            559,855
                                            
                                            
                                            
                                            383,685Total
      other assets
                                            
                                            
                                            763,388
                                            
                                            
                                            
                                            507,411TOTAL
      ASSETS
                                            
                                            $
                                            2,811,459
                                            
                                            
                                            $
                                            7,945,589LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                                            
                                            $
                                            1,094,844
                                            
                                            
                                            $
                                            889,489Deferred
      revenue
                                            
                                            
                                            120,000
                                            
                                            
                                            
                                            -Loans
      payable - equipment
                                            
                                            
                                            17,738
                                            
                                            
                                            
                                            34,850Capital
      lease obligation - equipment
                                            
                                            
                                            12,250
                                            
                                            
                                            
                                            9,543Royalty
      Advance
                                            
                                            
                                            750,000Severance
      payable
                                            
                                            
                                            200,000
                                            
                                            
                                            
                                            200,000Total
      current liabilities
                                            
                                            
                                            2,194,832
                                            
                                            
                                            
                                            1,133,882LONG-TERM
      LIABILITIESLoans
      payable - equipment, net of current portion
                                            
                                            
                                            
                                            
                                            
                                            
                                            16,821Capital
      lease obligation - equipment, net of current portion
                                            
                                            
                                            5,252
                                            
                                            
                                            
                                            15,742Severance
      payable, net of current portion
                                            
                                            
                                            1,435,485
                                            
                                            
                                            
                                            1,000,000Derivative
      financial instruments
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,591,834Total
      long-term liabilities
                                            
                                            
                                            1,440,737
                                            
                                            
                                            
                                            2,624,397Total
      liabilities
                                            
                                            
                                            3,635,569
                                            
                                            
                                            
                                            3,758,279COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITYPreferred
      stock A - $.001 par value 100,000,000 shares authorized, none issued and
      outstanding at December 31, 2009, 5,000 issued and outstanding at December
      31, 2008
                                            
                                            
                                            
                                            
                                            
                                            
                                            5Common
      stock, $.001 par value; 200,000,000 shares authorized, 74,100,664 shares
      issued and 67,405,703 outstanding at December 31, 2009, 69,549,164 shares
      issued and 62,854,203 outstanding at December 31, 2008
                                            
                                            
                                            74,100
                                            
                                            
                                            
                                            69,549Additional
      paid-in capital
                                            
                                            
                                            42,880,641
                                            
                                            
                                            
                                            35,842,053Accumulated
      other comprehensive loss
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (237,550
                                            )Deficit
      accumulated in the development stage
                                            
                                            
                                            (42,062,378
                                            )
                                            
                                            
                                            (29,770,274
                                            )892,363
                                            
                                            
                                            
                                            5,903,783Treasury
      Stock
                                            
                                            
                                            (1,716,473
                                            )
                                            
                                            
                                            (1,716,473
                                            )Total
      stockholders' equity
                                            
                                            
                                            (824,110
                                            )
                                            
                                            
                                            4,187,310TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                            
                                            $
                                            2,811,459
                                            
                                            
                                            $
                                            7,945,589




See
accompanying notes to the consolidated financial statements.





F-5




Global
Resource Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Operations and Comprehensive Loss


For the Years Ended
                    
                    
                    July
      19, 2002(Inception)December
      31
                    
                    
                    December
      31
                    
                    
                    to2009
                    
                    
                    2008
                    
                    
                    December 31, 2009REVENUES
                    
                    $
                    180,000
                    
                    
                    $
                    -
                    
                    
                    $
                    180,000COST
      OF REVENUES
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -GROSS
      PROFIT
                    
                    
                    180,000
                    
                    
                    
                    -
                    
                    
                    
                    180,000OPERATING
      EXPENSESGeneral
      and administrative expenses
                    
                    
                    12,539,216
                    
                    
                    
                    23,260,658
                    
                    
                    
                    52,561,587Research
      and development expenses
                    
                    
                    1,607,395
                    
                    
                    
                    871,622
                    
                    
                    
                    2,888,434Total
      operating expenses
                    
                    
                    14,146,611
                    
                    
                    
                    24,132,280
                    
                    
                    
                    55,450,021OPERATING
      LOSS
                    
                    
                    (13,966,611
                    )
                    
                    
                    (24,132,280
                    )
                    
                    
                    (55,270,021
                    )OTHER
      INCOME (EXPENSE)Loss
      on deposit and other
                    
                    
                    
                    
                    
                    
                    (7,181
                    )
                    
                    
                    (179,893
                    )Net
      realized loss on short-term investments
                    
                    
                    (20,027
                    )
                    
                    
                    (881,768
                    )
                    
                    
                    (901,795
                    )Change
      in fair value of derivative financial instruments
                    
                    
                    1,591,834
                    
                    
                    
                    9,358,836
                    
                    
                    
                    13,951,679Interest
      expense
                    
                    
                    (13,806
                    )
                    
                    
                    (17,981
                    )
                    
                    
                    (70,278
                    )Interest
      income
                    
                    
                    116,506
                    
                    
                    
                    185,025
                    
                    
                    
                    407,930Total
      other income (expense)
                    
                    
                    1,674,507
                    
                    
                    
                    8,636,931
                    
                    
                    
                    13,207,643NET
      LOSS
                    
                    $
                    (12,292,104
                    )
                    
                    $
                    (15,495,349
                    )
                    
                    $
                    (42,062,378
                    )OTHER
      COMPREHENSIVE LOSSUnrealized
      loss on short-term investments
                    
                    
                    
                    
                    
                    
                    (1,075,400
                    )
                    
                    
                    (1,075,400
                    )Realized
      loss on short-term investments, net of taxes, reclassified from
      accumulated other comprehensive loss
                    
                    
                    
                    
                    
                    
                    837,850
                    
                    
                    
                    837,850COMPREHENSIVE
      LOSS
                    
                    $
                    (12,292,104
                    )
                    
                    $
                    (15,732,899
                    )
                    
                    $
                    (42,299,928
                    )BASIC
      AND DILUTED LOSS PER COMMON SHARE
                    
                    $
                    (0.19
                    )
                    
                    $
                    (0.33
                    )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES
                    
                    
                    63,819,499
                    
                    
                    
                    47,215,783





See
accompanying notes to the consolidated financial statements.




F-6




Global Resource Corporation
 (A
Development Stage Company)
 Consolidated
Statements of  Stockholders' Equity (Deficit)
 
 (Restated)
                                        
                                        
                                        Deficit
                                        
                                        
                                        (Restated)
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        Accumulated
                                        
                                        
                                        (Restated)Preferred
      Stock A
                                        
                                        
                                        Preferred
      Stock B
                                        
                                        
                                        Common
      Stock
                                        
                                        
                                        Additional
                                        
                                        
                                        Accumulated
                                        
                                        
                                        
                                        
                                        
                                        Stock
                                        
                                        
                                        
                                        
                                        
                                        OtherPreferred
                                        
                                        
                                        Par
      Value $.001
                                        
                                        
                                        Preferred
                                        
                                        
                                        Par
      Value $.001
                                        
                                        
                                        Common
                                        
                                        
                                        Par
      Value $.001
                                        
                                        
                                        Paid-In
                                        
                                        
                                        during
      the
                                        
                                        
                                        Deferred
                                        
                                        
                                        Subscription
                                        
                                        
                                        Treasury
                                        
                                        
                                        ComprehensiveShares
                                        
                                        
                                        $
      Amount
                                        
                                        
                                        Shares
                                        
                                        
                                        $
      Amount
                                        
                                        
                                        Shares
                                        
                                        
                                        $
      Amount
                                        
                                        
                                        Capital
                                        
                                        
                                        Development
      Stage
                                        
                                        
                                        Compensation
                                        
                                        
                                        Receivable
                                        
                                        
                                        Stock
                                        
                                        
                                        Loss
                                        
                                        
                                        TotalBalance
      at July 19, 2002 (Inception)
                                        
                                        
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -Issuance
      of initial founders' shares, September 9, 2002net
      of subsequent cancellations
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        2,555,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Common
      stock shares issued for cash :Common
      stock issued for cash in November 2002, at $.50 per share plus 29,000
      warrants
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        29,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        14,500
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        14,500Common
      stock shares issued for services rendered:Common
      stock issued for services rendered, on September 10, 2002, at $0.472 per
      share
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        1,000,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        472,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        472,000Common
      stock issued for services rendered, in November and December , 2002, at
      $0.50 per share, plus 13,600 warrants
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        13,600
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        6,800
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        6,800Net
      loss for the period July 19, 2002 (Inception) through December 31, 2002
      (Restated, see Note 19)
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (508,508
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (508,508
                                        )Balance
      at December 31, 2002  (Restated, see Note 19)
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,597,600
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        493,300
                                        
                                        
                                        
                                        (508,508
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (15,208
                                        )Re-issuance
      of initial founders' shares, July 2003
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        1,455,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Common
      stock shares issued for cash :Common
      stock issued for cash from January 2003 to December 2003, at $.50 per
      share plus 519,800 warrants
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        519,800
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        259,900
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        259,900Stock
      subscriptions receivable, net
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (14,340
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (14,340
                                        )Net
      loss for the year ended December 31, 2003, (Restated, see Note
      19)
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (203,659
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (203,659
                                        )Balance
      at December 31, 2003 (Restated, see Note 19)
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        5,572,400
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        753,200
                                        
                                        
                                        
                                        (712,167
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (14,340
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        26,693Common
      stock shares issued for cash :Common
      stock issued for cash from January 2004 to December 2004, at $.50 per
      share plus 917,645 warrants
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        917,645
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        553,105
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        553,105Common
      Stock Shares issued for services rendered:Common
      stock issued for services rendered on October 12, 2004, at $1.00 per
      share
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        545,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        545,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (545,000
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Other:Common
      stock issued in exchange for real estate on August 25, 2004 at $1.00 per
      share plus 500,000 warrants
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        500,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        500,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        500,000Common
      stock issued in exchange for real estate on September 7, 2004 at $1.00 per
      share plus 150,000 warrants
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        150,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        150,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        150,000Common
      stock issued as charitable contribution on October 12, 2004, at $1.00 per
      share
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        50,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        50,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        50,000Initial
      founders' shares cancelled on October 28, 2004
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (250,000
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -Stock
      subscriptions receivable, net
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (74,240
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (74,240
                                        )Net
      loss for the year ended December 31, 2004
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (672,219
                                        )
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        (672,219
                                        )Balance
      at December 31, 2004
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        7,485,045
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        2,551,305
                                        
                                        
                                        
                                        (1,384,386
                                        )
                                        
                                        
                                        (545,000
                                        )
                                        
                                        
                                        (88,580
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        533,339
 
 See
accompanying notes to the consolidated financial statements.
  F-7
  Global
Resource Corporation
 (A
Development Stage Company)
 Consolidated
Statements of  Stockholders' Equity (Deficit)
 
 (Restated)
                                                          
                                                          
                                                          Deficit
                                                          
                                                          
                                                          (Restated)
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          Accumulated
                                                          
                                                          
                                                          (Restated)Preferred
      Stock A
                                                          
                                                          
                                                          Preferred
      Stock B
                                                          
                                                          
                                                          Common
      Stock
                                                          
                                                          
                                                          Additional
                                                          
                                                          
                                                          Accumulated
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          Stock
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          OtherPreferred
                                                          
                                                          
                                                          Par
      Value $.001
                                                          
                                                          
                                                          Preferred
                                                          
                                                          
                                                          Par
      Value $.001
                                                          
                                                          
                                                          Common
                                                          
                                                          
                                                          Par
      Value $.001
                                                          
                                                          
                                                          Paid-In
                                                          
                                                          
                                                          during
      the
                                                          
                                                          
                                                          Deferred
                                                          
                                                          
                                                          Subscription
                                                          
                                                          
                                                          Treasury
                                                          
                                                          
                                                          ComprehensiveShares
                                                          
                                                          
                                                          $
      Amount
                                                          
                                                          
                                                          Shares
                                                          
                                                          
                                                          $
      Amount
                                                          
                                                          
                                                          Shares
                                                          
                                                          
                                                          $
      Amount
                                                          
                                                          
                                                          Capital
                                                          
                                                          
                                                          Development
      Stage
                                                          
                                                          
                                                          Compensation
                                                          
                                                          
                                                          Receivable
                                                          
                                                          
                                                          Stock
                                                          
                                                          
                                                          Loss
                                                          
                                                          
                                                          TotalCommon
      stock shares issued for cash :Common
      stock issued for cash from January 2005 to December 2005 at $1.00 per
      share plus 163,980 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          165,980
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          181,980
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          181,980Common
      stock issued for cash from September 2005 to December 2005 at $2.00 per
      share plus 270,470 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          270,470
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          443,930
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          443,930Common
      stock issued for cash on December 30 and 31, 2005, at $1.02 per share plus
      126,705 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          126,705
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          163,362
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          163,362Common
      stock issued for cash on December 30, 2005, at $.99 per share plus 8,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          2,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,985
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,985Common
      stock issued for cash on December 30, 2005, at $.73 per share plus 66,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          16,500
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          12,033
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          12,033Common
      stock issued for cash on December 30, 2005, at $.70 per share plus 472,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          118,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          82,808
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          82,808Common
      stock issued for cash on December 30, 2005, at $.65 per share plus 105,200
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          26,300
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          17,050
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          17,050Common
      stock issued for cash on December 30, 2005, at $.64 per share plus 60,800
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          15,200
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          9,750
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          9,750Common
      stock issued for cash on December 30, 2005, at $.36 per share plus 18,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          4,500
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,610
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,610-Common
      Stock Shares issued for services rendered:Common
      stock issued for services rendered from March 2005 to December 2005, at
      $1.00 per share, plus 53,000 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          53,500
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          53,500
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          53,500Other:Common
      stock issued in exchange for real estate on January 18,  2005 at
      $1.00 per share plus 80,800 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          80,800
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          80,800
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          80,800Common
      stock  issued to Careful Sell Holdings, LLC to acquire
      technology with zero value  on February 23, 2005
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          7,500,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          -Common
      stock  issued to Careful Sell Holdings, LLC to acquire
      technology with zero value  on March 29, 2005
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          30,000,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          -Common
      stock issued for payment of debts on March 11, 2005, at $1.00 per share
      plus 1,087 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,087
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,087
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,087Stock
      subscriptions receiveable, net
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          10,398
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          10,398Amortization
      of deferred compensation
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          109,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          109,000Net
      loss for the year ended December 31, 2005
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (1,291,169
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (1,291,169
                                                          )Balance
      at December 31, 2005
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          45,866,087
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          3,601,200
                                                          
                                                          
                                                          
                                                          (2,675,555
                                                          )
                                                          
                                                          
                                                          (436,000
                                                          )
                                                          
                                                          
                                                          (78,182
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          411,463Common
      stock shares issued for cash :Common
      stock issued for cash on February 9, 2006, at $.31 per share plus 52,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          26,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          8,125
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          8,125Common
      stock issued for cash on March 17, 2006, at $.36 per share plus 308,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          154,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          55,175
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          55,175Common
      stock issued for cash on May 20, 2006, at $.49 per share plus 10,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          6,436
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          3,148
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          3,148Common
      stock issued for cash on June 12, 2006, at $.50 per share plus 50,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          25,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          12,485
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          12,485Common
      stock issued for cash on September 14, 2006, at $.35 per share plus
      863,200 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          431,600
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          288,207
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          288,207Common
      stock issued for cash from February 1, 2006 to September 15, 2006 at $1.00
      per share plus 1,337,450 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,309,650
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,318,010
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          1,318,010Common
      stock issued for cash in February 2006 and July  2006, at $1.02
      per share plus 922,000 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          486,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          495,614
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          495,614Common
      stock issued for cash on January 9, 2006, at $1.18 per share plus 61,000
      warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          61,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          72,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          72,000Common
      stock issued for cash from January 2006 to September 15, 2006 at $2.00 per
      share plus 391,100 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          286,600
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          558,112
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          558,112Common
      Stock Shares issued for services rendered:Common
      stock issued for services rendered, on September 22,  2006, at
      $1.04 per share plus 14,123 warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          14,123
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          14,746
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          14,746Common
      stock issued for services rendered to old GRC (shell)'s officer, on
      September 23,  2006, at $2.00 per share
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          25,000
                                                          
                                                          
                                                          
                                                          25
                                                          
                                                          
                                                          
                                                          49,975
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          50,000Other:Common
      stock issued in exchange for investment in real estate on September
      18,  2006, at $2.00 per share, plus 22,500
    warrants
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          22,500
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          45,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          45,000Common
      stock  issued for conversion of old GRC (shell)'s debt on
      September 26, 2006, at approximately $0.05 per share
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          2,681,837
                                                          
                                                          
                                                          
                                                          2,682
                                                          
                                                          
                                                          
                                                          118,000
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          120,682Stock
      subscriptions receiveable, net
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (582,511
                                                          )
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          (582,511
                                                          )
 
 See
accompanying notes to the consolidated financial statements.
  F-8
 Global
Resource Corporation
 (A
Development Stage Company)
 Consolidated
Statements of  Stockholders' Equity (Deficit)
 
 (Restated)
                                  
                                  
                                  Deficit
                                  
                                  
                                  (Restated)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  Accumulated
                                  
                                  
                                  (Restated)Preferred
      Stock A
                                  
                                  
                                  Preferred
      Stock B
                                  
                                  
                                  Common
      Stock
                                  
                                  
                                  Additional
                                  
                                  
                                  Accumulated
                                  
                                  
                                  
                                  
                                  
                                  Stock
                                  
                                  
                                  
                                  
                                  
                                  OtherPreferred
                                  
                                  
                                  Par
      Value $.001
                                  
                                  
                                  Preferred
                                  
                                  
                                  Par
      Value $.001
                                  
                                  
                                  Common
                                  
                                  
                                  Par
      Value $.001
                                  
                                  
                                  Paid-In
                                  
                                  
                                  during
      the
                                  
                                  
                                  Deferred
                                  
                                  
                                  Subscription
                                  
                                  
                                  Treasury
                                  
                                  
                                  ComprehensiveShares
                                  
                                  
                                  $
      Amount
                                  
                                  
                                  Shares
                                  
                                  
                                  $
      Amount
                                  
                                  
                                  Shares
                                  
                                  
                                  $
      Amount
                                  
                                  
                                  Capital
                                  
                                  
                                  Development
      Stage
                                  
                                  
                                  Compensation
                                  
                                  
                                  Receivable
                                  
                                  
                                  Stock
                                  
                                  
                                  Loss
                                  
                                  
                                  TotalReclass
      deferred compensation due to adoption of SFAS 123(R)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (436,000
                                  )
                                  
                                  
                                  
                                  
                                  
                                  436,000
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  -Amortization
      of deferred compensation
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  109,000
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  109,000Effect
      of reverse merger September 22, 2006
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  72,241
                                  
                                  
                                  
                                  48,761
                                  
                                  
                                  
                                  (169,444
                                  )
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (120,683
                                  )Common
      and Preferred Stock A issued for merger with Mobilestream Oil, Inc. on
      December 31, 2006, at $0.26 per share plus 27,205,867
    warrants
                                  
                                  
                                  35,236,188
                                  
                                  
                                  
                                  35,236
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  11,145,255
                                  
                                  
                                  
                                  11,145
                                  
                                  
                                  
                                  3,310,274
                                  
                                  
                                  
                                  (10,498
                                  )
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  3,346,157Cancellation
      of shares for merger with Mobilestream, Inc. on November 28,
      2006
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (37,500,000
                                  )
                                  
                                  
                                  (37,500
                                  )
                                  
                                  
                                  37,500
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  -Reclassification
      of derivative liability on warrants
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (16,139,529
                                  )
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (16,139,529
                                  )Net
      loss for the year ended December 31, 2006
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (5,010,541
                                  )
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  (5,010,541
                                  )Balance
      at December 31, 2006
                                  
                                  
                                  35,236,188
                                  
                                  
                                  
                                  35,236
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  25,113,329
                                  
                                  
                                  
                                  25,113
                                  
                                  
                                  
                                  (6,648,402
                                  )
                                  
                                  
                                  (7,696,594
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (660,693
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (14,945,340
                                  )Common
      stock shares issued for cash :Common
      stock issued for cash from January 29, 2007 to February 21, 2007, at $0.30
      per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  17,500
                                  
                                  
                                  
                                  18
                                  
                                  
                                  
                                  5,232
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  5,250Common
      stock issued for cash from April 2, 2007 to June 25, 2007 at $0.32 per
      share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  499,564
                                  
                                  
                                  
                                  500
                                  
                                  
                                  
                                  157,709
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  158,209Common
      stock issued for cash on March 7, 2007, at $1.08 per share (from stock to
      be issued liability)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  186,822
                                  
                                  
                                  
                                  187
                                  
                                  
                                  
                                  201,156
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  201,343Common
      stock issued for cash on October 25,  2007, at $2.00 per
      share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  2,500
                                  
                                  
                                  
                                  2
                                  
                                  
                                  
                                  4,998
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  5,000Common
      stock issued for cash on December 20, 2007, at $1.00 per share plus
      625,000 warrants
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  1,000,000
                                  
                                  
                                  
                                  1,000
                                  
                                  
                                  
                                  999,000
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  1,000,000Common
      Stock Shares issued for services rendered:Common
      stock issued for services rendered, on March 19, 2007 and July 9, 2007, at
      $1.00 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  9,700
                                  
                                  
                                  
                                  10
                                  
                                  
                                  
                                  9,690
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  9,700Common
      stock issued for services rendered, on March 19 and 20, 2007, at $0.50 per
      share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  31,000
                                  
                                  
                                  
                                  31
                                  
                                  
                                  
                                  20,969
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  21,000Common
      stock issued to employee for services rendered, on April
      20,  2007, at $1.38 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  250,000
                                  
                                  
                                  
                                  250
                                  
                                  
                                  
                                  344,750
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  345,000Common
      stock issued for services rendered, on May 30,  2007, at $1.05
      per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  3,417
                                  
                                  
                                  
                                  3
                                  
                                  
                                  
                                  3,301
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  3,304Common
      stock issued to employee for services rendered, on June 1, 2007, at $1.36
      per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  194,500
                                  
                                  
                                  
                                  195
                                  
                                  
                                  
                                  264,325
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  264,520Common
      stock issued for services rendered, on July 18,  2007, at $0.80
      per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  37,500
                                  
                                  
                                  
                                  37
                                  
                                  
                                  
                                  29,963
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  30,000Common
      stock issued to employee for services rendered, on August
      1,  2007, at $4.43 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  100,000
                                  
                                  
                                  
                                  100
                                  
                                  
                                  
                                  442,900
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  443,000Common
      stock issued to employee for services rendered, on August
      19,  2007, at $4.50 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  250,000
                                  
                                  
                                  
                                  250
                                  
                                  
                                  
                                  1,124,750
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  1,125,000Common
      stock issued for services rendered, on August 30,  2007, at
      $2.27 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  3,745
                                  
                                  
                                  
                                  3
                                  
                                  
                                  
                                  8,497
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  8,500Common
      stock issued for services rendered, on August 30,  2007, at
      $0.69 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  30,041
                                  
                                  
                                  
                                  30
                                  
                                  
                                  
                                  20,698
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  20,728Common
      stock issued for services rendered, on August 31,  2007, at
      $3.41per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  361,000
                                  
                                  
                                  
                                  361
                                  
                                  
                                  
                                  1,230,649
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  1,231,010Common
      stock issued for services to be performed, service valued on September 14,
      2007, at $2.29 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  150,000
                                  
                                  
                                  
                                  150
                                  
                                  
                                  
                                  343,350
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  343,500Common
      stock issued to employee for services rendered, on October
      1,  2007, at $2.60 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  300,000
                                  
                                  
                                  
                                  300
                                  
                                  
                                  
                                  779,700
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  780,000Common
      stock issued for services to be performed, service valued on October 02,
      2007, at $2.47 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  350,000
                                  
                                  
                                  
                                  350
                                  
                                  
                                  
                                  864,150
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  864,500Common
      stock issued for services to be performed, service valued on October 02,
      2007, at $2.40 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  75,000
                                  
                                  
                                  
                                  75
                                  
                                  
                                  
                                  179,926
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  180,001Common
      stock issued for services rendered, on October 9, 2007, at $2.69 per
      share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  47,579
                                  
                                  
                                  
                                  47
                                  
                                  
                                  
                                  127,703
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  127,750Common
      stock issued to employee for services rendered, on October 22, 2007, at
      $1.86 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  50,000
                                  
                                  
                                  
                                  50
                                  
                                  
                                  
                                  92,950
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  93,000Common
      stock issued for services rendered, on October 29, 2007, at $2.25 per
      share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  150,000
                                  
                                  
                                  
                                  150
                                  
                                  
                                  
                                  337,350
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  337,500Common
      stock issued for services rendered, on November 9, 2007, at $3.23 per
      share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  130,000
                                  
                                  
                                  
                                  130
                                  
                                  
                                  
                                  419,770
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  419,900Common
      stock issued for services rendered, on November 19,  2007, at
      $3.50 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  50,000
                                  
                                  
                                  
                                  50
                                  
                                  
                                  
                                  174,950
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  175,000Common
      stock issued for services rendered, on November 26,  2007, at
      $3.01 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  30,000
                                  
                                  
                                  
                                  30
                                  
                                  
                                  
                                  90,270
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  90,300Common
      stock issued for services rendered, on December 3,  2007, at
      $2.00 per share
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  45,094
                                  
                                  
                                  
                                  45
                                  
                                  
                                  
                                  89,955
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  90,000
 
 See
accompanying notes to the consolidated financial statements.
  F-9




Global
Resource Corporation


(A
Development Stage Company)


Consolidated
Statements of  Stockholders' Equity (Deficit)




(Restated)
                                    
                                    
                                    Deficit
                                    
                                    
                                    (Restated)
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    Accumulated
                                    
                                    
                                    (Restated)Preferred Stock A
                                    
                                    
                                    Preferred Stock B
                                    
                                    
                                    Common Stock
                                    
                                    
                                    Additional
                                    
                                    
                                    Accumulated
                                    
                                    
                                    
                                    
                                    
                                    Stock
                                    
                                    
                                    
                                    
                                    
                                    OtherPreferred
                                    
                                    
                                    Par Value $.001
                                    
                                    
                                    Preferred
                                    
                                    
                                    Par Value $.001
                                    
                                    
                                    Common
                                    
                                    
                                    Par Value $.001
                                    
                                    
                                    Paid-In
                                    
                                    
                                    during the
                                    
                                    
                                    Deferred
                                    
                                    
                                    Subscription
                                    
                                    
                                    Treasury
                                    
                                    
                                    ComprehensiveShares
                                    
                                    
                                    $ Amount
                                    
                                    
                                    Shares
                                    
                                    
                                    $ Amount
                                    
                                    
                                    Shares
                                    
                                    
                                    $ Amount
                                    
                                    
                                    Capital
                                    
                                    
                                    Development Stage
                                    
                                    
                                    Compensation
                                    
                                    
                                    Receivable
                                    
                                    
                                    Stock
                                    
                                    
                                    Loss
                                    
                                    
                                    TotalCommon stock
      issued for services rendered, on December 4,  2007, at $3.15 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    157,450
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    157,500Common
      stock issued for services rendered, on December 11,  2007, at
      $2.50 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    200,000
                                    
                                    
                                    
                                    200
                                    
                                    
                                    
                                    499,800
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    500,000Common
      stock issued for services rendered, on December 17,  2007, at
      $1.446 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    400,000
                                    
                                    
                                    
                                    400
                                    
                                    
                                    
                                    578,052
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    578,452Common
      stock issued for services rendered, on December 17,  2007, at
      $2.50 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    100,000
                                    
                                    
                                    
                                    100
                                    
                                    
                                    
                                    249,900
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    250,000Common
      stock issued for services rendered, on December 18,  2007, at
      $3.02 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    150,950
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    151,000Common
      stock issued for services rendered, on December 21,  2007, at
      $3.00 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    40,000
                                    
                                    
                                    
                                    40
                                    
                                    
                                    
                                    119,960
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    120,000Common
      stock issued for services rendered, on December 27,  2007, at
      $3.10 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    154,950
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    155,000Other:Preferred
      Stock B Shares issued for settlement of services
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,000
                                    
                                    
                                    
                                    1
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    399,999
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    400,000Treasury
      stock, purchased from former officer on May 17, 2007, at $.70 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (94,961
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (66,473
                                    )
                                    
                                    
                                    
                                    
                                    
                                    (66,473
                                    )Stock
      subscriptions receiveable, net
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    475,000
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    475,000Amortization
      of deferred compensation
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    109,000
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    109,000Reclassification
      of derivative liability into additional paid in capital due to
      cancellation of warrants
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,187,850
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,187,850Net
      loss for the year ended December 31, 2007 (Restated, see Note
      20)
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (6,578,331
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (6,578,331
                                    )Balance
      at December 31, 2007 (Restated, see Note 20)
                                    
                                    
                                    35,236,188
                                    
                                    
                                    
                                    35,236
                                    
                                    
                                    
                                    1,000
                                    
                                    
                                    
                                    1
                                    
                                    
                                    
                                    30,263,330
                                    
                                    
                                    
                                    30,358
                                    
                                    
                                    
                                    6,328,170
                                    
                                    
                                    
                                    (14,274,925
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (185,693
                                    )
                                    
                                    
                                    (66,473
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (8,133,326
                                    )Common
      stock shares issued for cash :Common
      stock issued for cash on February 19, 2008, at $2.00 per
    share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    17,000
                                    
                                    
                                    
                                    17
                                    
                                    
                                    
                                    33,983
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    34,000Common
      stock issued for cash on March 5, 2008, at $1.61 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    31,057
                                    
                                    
                                    
                                    31
                                    
                                    
                                    
                                    49,969
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000Common
      stock issued for cash from March 18, 2008 to  October 15, 2008
      at $1.00 per share, plus 6,081,768 warrants
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    8,808,987
                                    
                                    
                                    
                                    8,809
                                    
                                    
                                    
                                    8,799,779
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    8,808,588Common
      stock issued for cash on March 26, 2008, at $1.18 per
share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    9,000
                                    
                                    
                                    
                                    9
                                    
                                    
                                    
                                    10,611
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    10,620Common
      stock issued for cash on April 11, 2008, at $1.11 per share, plus
      1,929,775  warrants
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,929,775
                                    
                                    
                                    
                                    1,930
                                    
                                    
                                    
                                    2,148,662
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,150,592Common
      stock issued for cash on April 25, 2008, at $1.19 per share, plus
      1,487,139 warrants
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,487,139
                                    
                                    
                                    
                                    1,487
                                    
                                    
                                    
                                    1,771,366
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,772,853Common
      stock issued for cash on May 15, 2008, at $1.10 per share plus 39,100
      warrants
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    39,100
                                    
                                    
                                    
                                    39
                                    
                                    
                                    
                                    42,891
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    42,930Common
      stock issued for cash on August 21, 2008, at $.88 per
share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    10,000
                                    
                                    
                                    
                                    10
                                    
                                    
                                    
                                    8,740
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    8,750Common
      stock issued for cash on September 4, 2008, at $1.04 per
    share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    13,867
                                    
                                    
                                    
                                    14
                                    
                                    
                                    
                                    14,384
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    14,398Common
      stock issued on December 16, 2008, at $0 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    850,000
                                    
                                    
                                    
                                    850
                                    
                                    
                                    
                                    1,089
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,939Common
      stock shares issued for services
      rendered:Common
      stock issued for services rendered, on February 1, 2008, at $2.95 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    100,000
                                    
                                    
                                    
                                    100
                                    
                                    
                                    
                                    294,900
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    295,000Common
      stock issued for services rendered, on February 6, 2008, at $2.63 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    150,000
                                    
                                    
                                    
                                    150
                                    
                                    
                                    
                                    394,350
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    394,500Common
      stock issued for services rendered, on February 13, 2008, at $2.39 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    12,500
                                    
                                    
                                    
                                    13
                                    
                                    
                                    
                                    29,862
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    29,875Common
      stock issued for services rendered, on February 15, 2008, at $2.42 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    20,000
                                    
                                    
                                    
                                    20
                                    
                                    
                                    
                                    48,380
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    48,400Common
      stock issued for services rendered, on February 28, 2008, at $2.15 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    25,000
                                    
                                    
                                    
                                    25
                                    
                                    
                                    
                                    53,725
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    53,750Common
      stock issued for services rendered, on February 29, 2008, at $2.19 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    175,000
                                    
                                    
                                    
                                    175
                                    
                                    
                                    
                                    383,075
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    383,250Common
      stock issued for services rendered, on March 14, 2008, at $2.10 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    5,000
                                    
                                    
                                    
                                    5
                                    
                                    
                                    
                                    10,495
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    10,500Common
      stock issued for services rendered, on March 18, 2008 and March 19, 2008
      at $1.60 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    79,950
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    80,000Common
      stock issued for services rendered, on March 31, 2008 and April 4, 20008
      at $1.90 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,436,666
                                    
                                    
                                    
                                    1,437
                                    
                                    
                                    
                                    2,728,228
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,729,665Common
      stock issued for services rendered, on April 1, 2008, at $1.95 per
      share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    70,000
                                    
                                    
                                    
                                    70
                                    
                                    
                                    
                                    136,430
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    136,500Common
      stock issued for penalty, on April 2, 2008, at $1.84 per
    share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    91,950
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    92,000Common
      stock issued for services rendered, on April 14,  2008, at $3.05
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    150,000
                                    
                                    
                                    
                                    150
                                    
                                    
                                    
                                    457,350
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    457,500Common
      stock issued for services rendered, on April 29,  2008, at $3.07
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    883,333
                                    
                                    
                                    
                                    883
                                    
                                    
                                    
                                    2,710,950
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,711,833Common
      stock issued for services rendered, on May 7,  2008, at $2.55
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,000,000
                                    
                                    
                                    
                                    1,000
                                    
                                    
                                    
                                    2,549,000
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    2,550,000Common
      stock issued for services rendered, on May 12,  2008, at $2.65
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    20,000
                                    
                                    
                                    
                                    20
                                    
                                    
                                    
                                    52,980
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    53,000Common
      stock issued for services rendered, on May 13,  2008, at $2.79
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    50
                                    
                                    
                                    
                                    139,450
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    139,500Common
      stock issued for services rendered, on June 3,  2008, at $2.10
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    150,000
                                    
                                    
                                    
                                    150
                                    
                                    
                                    
                                    314,850
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    315,000Common
      stock issued for services rendered, on June 11, 2008 and June 13, 2008 at
      $2.25 per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    213,750
                                    
                                    
                                    
                                    214
                                    
                                    
                                    
                                    480,724
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    480,938Common
      stock issued for penalty to "POOF", on June 30,  2008, at $2.09
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    650,000
                                    
                                    
                                    
                                    650
                                    
                                    
                                    
                                    1,357,850
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,358,500Common
      stock issued for services rendered, on July 14,  2008, at $1.66
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    200,000
                                    
                                    
                                    
                                    200
                                    
                                    
                                    
                                    331,800
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    332,000Common
      stock issued for services rendered, on July 25,  2008, at $1.40
      per share
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    75,000
                                    
                                    
                                    
                                    75
                                    
                                    
                                    
                                    104,925
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    105,000




See
accompanying notes to the consolidated financial statements.





F-10




Global
Resource Corporation


(A
Development Stage Company)


Consolidated
Statements of  Stockholders' Equity (Deficit)




(Restated)
                                
                                
                                Deficit
                                
                                
                                (Restated)
                                
                                
                                
                                
                                
                                
                                
                                
                                Accumulated
                                
                                
                                (Restated)Preferred Stock A
                                
                                
                                Preferred Stock B
                                
                                
                                Common Stock
                                
                                
                                Additional
                                
                                
                                Accumulated
                                
                                
                                
                                
                                
                                Stock
                                
                                
                                
                                
                                
                                OtherPreferred
                                
                                
                                Par Value $.001
                                
                                
                                Preferred
                                
                                
                                Par Value $.001
                                
                                
                                Common
                                
                                
                                Par Value $.001
                                
                                
                                Paid-In
                                
                                
                                during the
                                
                                
                                Deferred
                                
                                
                                Subscription
                                
                                
                                Treasury
                                
                                
                                ComprehensiveShares
                                
                                
                                $ Amount
                                
                                
                                Shares
                                
                                
                                $ Amount
                                
                                
                                Shares
                                
                                
                                $ Amount
                                
                                
                                Capital
                                
                                
                                Development Stage
                                
                                
                                Compensation
                                
                                
                                Receivable
                                
                                
                                Stock
                                
                                
                                Loss
                                
                                
                                TotalCommon
      stock issued for services rendered, on August 8,  2008, at $1.03
      per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                75,000
                                
                                
                                
                                75
                                
                                
                                
                                77,175
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                77,250Common
      stock issued for services rendered, on August 25,  2008, at
      $1.25 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                6,000
                                
                                
                                
                                6
                                
                                
                                
                                7,494
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                7,500Common
      stock issued for services rendered, on September 8, 2008, at $.96 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                1,500,000
                                
                                
                                
                                1,500
                                
                                
                                
                                1,438,500
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                1,440,000Common
      stock issued for services rendered, on October 7, 2008, at $1.49 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                100,000
                                
                                
                                
                                100
                                
                                
                                
                                148,900
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                149,000Common
      stock issued for services rendered, on October 15, 2008, at $1.25 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                60,000
                                
                                
                                
                                60
                                
                                
                                
                                74,940
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                75,000Common
      stock issued for services rendered, on October 20, 2008, at $1.50 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                125,000
                                
                                
                                
                                125
                                
                                
                                
                                187,375
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                187,500Common
      stock issued for services rendered, on October 24, 2008, at $1.37 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                100,000
                                
                                
                                
                                100
                                
                                
                                
                                136,900
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                137,000Common
      stock issued for services rendered, on October 31, 2008, at $1.55 per
      share, plus 300,000 warrants
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                150,000
                                
                                
                                
                                150
                                
                                
                                
                                232,350
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                232,500Common
      stock issued for services rendered, on December 16, 2008, at $1.35 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                12,600
                                
                                
                                
                                13
                                
                                
                                
                                16,997
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                17,010Common
      stock issued for services rendered, on December 18, 2008, at $1.08 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                100,000
                                
                                
                                
                                100
                                
                                
                                
                                107,900
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                108,000Common
      stock issued to employees for services rendered, on June 26, 2008, at
      $2.08 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                7,500
                                
                                
                                
                                8
                                
                                
                                
                                16,632
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                16,640Common
      stock warrants and option
      activity:Common
      Stock Warrants issued for services (BOD) on February 7, 2008, at $2.43 per
      share (6,000 warrants)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                21,870
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                21,870Common
      Stock Warrants issued for services (BOD) on May 21, 2008, at $2.47 per
      share (9,000 warrants)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                14,795
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                14,795Common
      Stock Warrants issued for services (BOD) on September 23,  2008,
      at $2.25 per share (25,000 warrants)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                50,000
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                50,000Common
      Stock Warrants issued for services (BOD) on  November 13, 2008,
      at $1.35 per share (20,000 warrants)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                24,600
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                24,600Common
      Stock Warrants issued for services to non-employee on September 3, 2008,
      at $2.75 per share (76,500 warrants)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                78,030
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                78,030Common
      Stock Warrants issued for services to non-employee on October 1, 2008, at
      $1.36 per share (300,000 warrants)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                102,285
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                102,285Common
      Stock Warrants exercised cashless by Nutmeg/Black Diamond on April 2,
      2008, at $1.84 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                124,489
                                
                                
                                
                                124
                                
                                
                                
                                (124
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -Common
      Stock Warrants exercised cashless by POOF on July 3, 2008, at $1.42 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                325,957
                                
                                
                                
                                326
                                
                                
                                
                                (326
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -Common
      Stock Options issued to employee on  October 1, 2008, at fair
      value of $1.04 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                1,040,000
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                1,040,000Other:Preferred
      stock B - converted to common stock on April 8, 2008
                                
                                
                                
                                
                                
                                
                                
                                
                                (1,000
                                )
                                
                                
                                (1
                                )
                                
                                
                                206,559
                                
                                
                                
                                207
                                
                                
                                
                                (206
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -Preferred
      stock A - converted by former officer into common stock on June 25,
      2008
                                
                                
                                (1,791,064
                                )
                                
                                
                                (1,791
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                895,532
                                
                                
                                
                                895
                                
                                
                                
                                896
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -Preferred
      stock A - converted by former officer into common stock on August 13,
      2008
                                
                                
                                (33,440,124
                                )
                                
                                
                                (33,440
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                16,720,062
                                
                                
                                
                                16,720
                                
                                
                                
                                16,720
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -Treasury
      stock, purchased from former officer on August 13, 2008, for $.25 per
      share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (6,600,000
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (1,650,000
                                )
                                
                                
                                
                                
                                
                                (1,650,000
                                )Stock
      subscription receivable, net
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (130,518
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                185,693
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                55,175Record
      other comprehensive loss - net unrealized gain /(loss) on short-term
      investments :Other
      comprehensive loss - net unrealized loss recorded at June 30,
      2008
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (142,312
                                )
                                
                                
                                (142,312
                                )Other
      comprehensive loss - net unrealized loss recorded at September 30,
      2008
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (819,015
                                )
                                
                                
                                (819,015
                                )Other
      comprehensive loss - net unrealized loss recorded at December
      31,2008
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (114,073
                                )
                                
                                
                                (114,073
                                )Reclassification
      of unrealized loss deemed to be other than temporary
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                837,850
                                
                                
                                
                                837,850Amortization
      and write-off of deferred compensation
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                218,000
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                218,000Net
      loss for the year ended December 31, 2008
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (15,495,349
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (15,495,349
                                )Balance
      at December 31, 2008
                                
                                
                                5,000
                                
                                
                                $
                                5
                                
                                
                                
                                -
                                
                                
                                $
                                -
                                
                                
                                
                                62,854,203
                                
                                
                                $
                                69,549
                                
                                
                                $
                                35,842,053
                                
                                
                                $
                                (29,770,274
                                )
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                (1,716,473
                                )
                                
                                $
                                (237,550
                                )
                                
                                $
                                4,187,310Common
      stock shares issued for cash :Common
      stock issued for cash on December 15, 2009, at $0.50 per
    share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                250,000
                                
                                
                                
                                250
                                
                                
                                
                                125,581
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                125,831Common
      stock shares issued for services
      rendered:Common
      stock issued for services rendered, on January 8,  2009, at
      $1.17 per share plus 150,000 warrants
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                60,000
                                
                                
                                
                                60
                                
                                
                                
                                70,140
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                70,200Common
      stock issued for services rendered, on February 24,  2009, at
      $1.30 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                15,000
                                
                                
                                
                                15
                                
                                
                                
                                19,485
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                19,500Common
      stock issued for services rendered, on March 20,  2009, at $1.25
      per share plus 60,041 warrants
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                19,000
                                
                                
                                
                                19
                                
                                
                                
                                23,731
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                23,750Common
      stock issued for services rendered, on April 22,  2009, at $1.13
      per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                225,000
                                
                                
                                
                                225
                                
                                
                                
                                254,025
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                254,250Common
      stock issued for services rendered, on March 24,  2009, at $1.37
      per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                105,000
                                
                                
                                
                                105
                                
                                
                                
                                143,745
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                143,850Common
      stock issued for services rendered, on May 12,  2009, at $1.64
      per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                300,000
                                
                                
                                
                                300
                                
                                
                                
                                491,700
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                492,000Common
      stock issued for services rendered, on September 10,  2009, at
      $0.90 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                125,000
                                
                                
                                
                                125
                                
                                
                                
                                112,375
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                112,500Common
      stock issued for services rendered, on October 10,  2009, at
      $1.08 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                600,000
                                
                                
                                
                                600
                                
                                
                                
                                647,400
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                648,000Common
      stock issued for services rendered, on October 10,  2009, at
      $1.08 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                450,000
                                
                                
                                
                                450
                                
                                
                                
                                485,550
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                486,000Common
      stock issued for services rendered, on November 20,  2009, at
      $0.91 per share
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                250,000
                                
                                
                                
                                250
                                
                                
                                
                                227,250
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                227,500




See
accompanying notes to the consolidated financial statements.





F-11




Global
Resource Corporation


(A
Development Stage Company)


Consolidated
Statements of  Stockholders' Equity (Deficit)




(Restated)
                            
                            
                            Deficit
                            
                            
                            (Restated)
                            
                            
                            
                            
                            
                            
                            
                            
                            Accumulated
                            
                            
                            (Restated)Preferred
      Stock A
                            
                            
                            Preferred
      Stock B
                            
                            
                            Common
      Stock
                            
                            
                            Additional
                            
                            
                            Accumulated
                            
                            
                            
                            
                            
                            Stock
                            
                            
                            
                            
                            
                            OtherPreferred
                            
                            
                            Par
      Value $.001
                            
                            
                            Preferred
                            
                            
                            Par
      Value $.001
                            
                            
                            Common
                            
                            
                            Par
      Value $.001
                            
                            
                            Paid-In
                            
                            
                            during
      the
                            
                            
                            Deferred
                            
                            
                            Subscription
                            
                            
                            Treasury
                            
                            
                            ComprehensiveShares
                            
                            
                            $
      Amount
                            
                            
                            Shares
                            
                            
                            $
      Amount
                            
                            
                            Shares
                            
                            
                            $
      Amount
                            
                            
                            Capital
                            
                            
                            Development
      Stage
                            
                            
                            Compensation
                            
                            
                            Receivable
                            
                            
                            Stock
                            
                            
                            Loss
                            
                            
                            TotalCommon
      stock issued for services rendered, on November 23,  2009, at
      $0.87 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            250,000
                            
                            
                            
                            250
                            
                            
                            
                            217,250
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            217,500Common
      stock issued for services rendered, on November 30,  2009, at
      $0.80 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            300,000
                            
                            
                            
                            300
                            
                            
                            
                            239,700
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            240,000Common
      stock issued for services rendered, on December 17,  2009, at
      $0.62 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            400,000
                            
                            
                            
                            400
                            
                            
                            
                            231,600
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            232,000Common
      stock issued for services rendered, on December 15,  2009, at
      $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            200,000
                            
                            
                            
                            200
                            
                            
                            
                            115,800
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            116,000Common
      stock issued for services rendered, on December 15,  2009, at
      $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            200,000
                            
                            
                            
                            200
                            
                            
                            
                            115,800
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            116,000Common
      stock issued for services rendered, on December 16,  2009, at
      $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            200,000
                            
                            
                            
                            200
                            
                            
                            
                            137,663
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            137,863Common
      stock issued for services rendered, on December 17,  2009, at
      $0.62 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            500,000
                            
                            
                            
                            500
                            
                            
                            
                            309,500
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            310,000Common
      stock issued for services rendered, on December 21,  2009, at
      $0.59 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            100,000
                            
                            
                            
                            100
                            
                            
                            
                            58,900
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            59,000-Common
      stock warrants and option
      activity:Common
      Stock Warrants issued for services to non-employees on January 2, 2009, at
      $1.50 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            103,147
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            103,147Common
      Stock Warrants issued for services to non-employees on February 18, 2009,
      at $2.50 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            31,666
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            31,666Common
      Stock Warrants issued for services to non-employees on March 2, 2009, at
      $1.02 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            54,618
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            54,618Common
      Stock Warrants issued for services (BOD) on March 27, 2009, at $1.04 per
      share (30,000 warrants)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            27,119
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            27,119Common
      Stock Warrants issued for services (BOD) on August 5, 2009, at $1.10 per
      share (25,000 warrants)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            24,519
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            24,519Common
      Stock Warrants amortization expense for warrants issued for services to
      non-employees on October 31, 2008, at $1.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            306,855
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            306,855Record
      Common Stock Options expense for options issued to former employee
      on  October 5, 2009, at fair value of $1.18 per
      share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            1,986,236
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            1,986,236Common
      Stock Warrants issued for services to non-employees on April 1, 2009, at
      $1.50 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            98,661
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            98,661Common
      Stock Warrants issued for services to non-employees on April 1, 2009, at
      $1.01 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            140,880
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            140,880Common
      Stock Warrants issued for services to non-employees on November 11, 2009,
      at $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            54,653
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            54,653Common
      Stock Warrants issued for services to non-employees on November 23, 2009,
      at $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            17,584
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            17,584Common
      stock Warrants issued for services to former employee on December 15, 2009
      at $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            93,836
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            93,836Common
      stock Warrants issued for services to former employee on December 15, 2009
      at $0.58 per share
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            71,616
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            71,616--Other:
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            --Preferred
      stock A - converted to common stock on January 6, 2009
                            
                            
                            (5,000
                            )
                            
                            
                            (5
                            )
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            2,500
                            
                            
                            
                            2
                            
                            
                            
                            3
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            --Record
      other comprehensive loss - unrealized loss recorded at July 31,
      2009
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            237,550
                            
                            
                            
                            237,550-Net
      loss for the year ended December 31, 2009
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (12,292,104
                            )
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (12,292,104
                            )Balance
      at December 31, 2009
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            67,405,703
                            
                            
                            $
                            74,100
                            
                            
                            $
                            42,880,641
                            
                            
                            $
                            (42,062,378
                            )
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            (1,716,473
                            )
                            
                            $
                            -
                            
                            
                            $
                            (824,110
                            )




See
accompanying notes to the consolidated financial statements.





F-12




Global
Resource Corporation


(A
Development Stage Company)
 Consolidated
Statements of Cash Flows
 (With
Cumulative Totals Since Inception)


July 19, 2002For The Years Ended
                  
                  
                  (Inception)December 31,
                  
                  
                  December 31,
                  
                  
                  to2009
                  
                  
                  2008
                  
                  
                  December 31, 2009CASH FLOWS FROM
      OPERATING ACTIVITIESNet
      loss
                  
                  $
                  (12,292,104
                  )
                  
                  $
                  (15,495,349
                  )
                  
                  $
                  (42,062,378
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                  
                  
                  375,393
                  
                  
                  
                  98,909
                  
                  
                  
                  657,246Preferred
      stock issued for services
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  400,000Common
      stock issued for services
                  
                  
                  1,512,488
                  
                  
                  
                  12,973,550
                  
                  
                  
                  22,385,309Amortization
      of prepaid common stock issued for services
                  
                  
                  2,393,425
                  
                  
                  
                  2,616,667
                  
                  
                  
                  5,783,550Common
      stock warrants and options issued for services
                  
                  
                  2,051,390
                  
                  
                  
                  1,331,579
                  
                  
                  
                  3,382,969Amortization
      of deferred compensation
                  
                  
                  
                  
                  
                  
                  218,000
                  
                  
                  
                  545,000Loss
      on sale of property and equipment
                  
                  
                  32,486
                  
                  
                  
                  7,181
                  
                  
                  
                  51,441Loss
      on sale of real estate and forfeiture of deposit
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  212,936Loss
      on sale of short-term investments
                  
                  
                  17,438
                  
                  
                  
                  
                  
                  
                  
                  17,438Change
      in severance payable non-cash
                  
                  
                  1,035,485
                  
                  
                  
                  
                  
                  
                  
                  1,035,485Change
      in fair value of derivative financial instruments
                  
                  
                  (1,591,834
                  )
                  
                  
                  (9,358,836
                  )
                  
                  
                  (13,951,679
                  )Other
      than temporary losses on short-term investments
                  
                  
                  237,550
                  
                  
                  
                  837,850
                  
                  
                  
                  1,075,400Common
      stock issued as charitable contribution
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  50,000Changes
      in operating assets and liabilitiesPrepaid
      services
                  
                  
                  931,625
                  
                  
                  
                  (85,000
                  )
                  
                  
                  846,625Deposits
                  
                  
                  (604
                  )
                  
                  
                  (48,866
                  )
                  
                  
                  (179,330
                  )Prepaid
      patent costs
                  
                  
                  (255,373
                  )
                  
                  
                  (240,622
                  )
                  
                  
                  (639,058
                  )Accounts
      payable and accrued liabilities
                  
                  
                  765,762
                  
                  
                  
                  769,901
                  
                  
                  
                  1,857,680Deferred
      revenue
                  
                  
                  120,000
                  
                  
                  
                  
                  
                  
                  
                  120,000Severance
      payable
                  
                  
                  (200,000
                  )
                  
                  
                  1,200,000
                  
                  
                  
                  1,000,000Total
      adjustments
                  
                  
                  7,425,231
                  
                  
                  
                  10,320,313
                  
                  
                  
                  24,651,012Net
      cash used in operating activities
                  
                  
                  (4,866,873
                  )
                  
                  
                  (5,175,036
                  )
                  
                  
                  (17,411,366
                  )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment - equipment & machinery
                  
                  
                  (74,718
                  )
                  
                  
                  (138,743
                  )
                  
                  
                  (666,697
                  )Purchase
      of property and equipment - construction-in-progress
                  
                  
                  (422,908
                  )
                  
                  
                  (930,079
                  )
                  
                  
                  (1,352,987
                  )Proceeds
      from sale of property and equipment
                  
                  
                  
                  
                  
                  
                  10,000
                  
                  
                  
                  44,200Proceeds
      from sale of real estate
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  617,864Purchase
      of short-term investments
                  
                  
                  
                  
                  
                  
                  (4,586,334
                  )
                  
                  
                  (4,586,334
                  )Proceeds
      from sale of short-term investments
                  
                  
                  2,557,274
                  
                  
                  
                  953,660
                  
                  
                  
                  3,510,934Net
      cash provided by (used in) investing activities
                  
                  
                  2,059,648
                  
                  
                  
                  (4,691,496
                  )
                  
                  
                  (2,433,020
                  )CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance
      of common stock for cash
                  
                  
                  125,831
                  
                  
                  
                  12,892,731
                  
                  
                  
                  21,128,006Proceeds
      from stock subscription receivable
                  
                  
                  
                  
                  
                  
                  55,175
                  
                  
                  
                  (130,518
                  )Proceeds
      from royalty advance
                  
                  
                  750,000
                  
                  
                  
                  
                  
                  
                  
                  750,000Purchase
      of treasury stock
                  
                  
                  
                  
                  
                  
                  (1,650,000
                  )
                  
                  
                  (1,716,473
                  )Repayment
      of loans payable and capital lease obligation
                  
                  
                  (41,716
                  )
                  
                  
                  (198,069
                  )
                  
                  
                  (146,009
                  )Net
      cash provided by (used in) financing activities
                  
                  
                  834,115
                  
                  
                  
                  11,099,837
                  
                  
                  
                  19,885,006NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                  
                  
                  (1,973,110
                  )
                  
                  
                  1,233,305
                  
                  
                  
                  40,620CASH
      AND CASH EQUIVALENTS - BEGINNING OF PERIOD
                  
                  
                  2,013,730
                  
                  
                  
                  780,425CASH
      AND CASH EQUIVALENTS - END OF PERIOD
                  
                  $
                  40,620
                  
                  
                  $
                  2,013,730
                  
                  
                  $
                  40,620SUPPLEMENTAL
      DISCLOSURES OF NON-CASH ACTIVITIES:Interest
      Paid
                  
                  $
                  9,124
                  
                  
                  $
                  17,981
                  
                  
                  $
                  65,596






F-13




Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 NOTE
      1 –
              NATURE OF BUSINESS AND
      BASIS OF PRESENTATION
 
 Nature of
Business
 
 Global
Resource Corporation’s (“GRC” or the “Company”) business plan is to research,
develop and market the business of decomposing petroleum-based materials by
subjecting them to a fixed-frequency microwave radiation (the “Technology”) at
specifically selected frequencies for a time sufficient to at least partially
decompose the materials, converting the materials into hydrocarbons and fossil
fuels from sources such as tires, oil shale, capped wells, shale deposits and
waste oil streams.
 
 The
Company’s business goals for exploitation of the Technology are as
follows:
 
 1)   The
      design, manufacture and sale of machinery and equipment units, embodying
      the Technology.
 2)   The
      ownership and operation of plants to use the Technology in conjunction
      with other investors.
 3)   The
      formation of joint venture relationships with established
      companies.
 
 The
Company is considered to be in the development stage as defined the Financial
Accounting Standards Board (“FASB”) in accordance with Accounting Standards
Codification (“ASC”), 915-205-45 "Accounting and Reporting by
Development Stage Enterprises".  The Company has devoted
substantially all of its efforts to business planning and development, as well
as allocating a substantial portion of its time and resources in bringing its
product to the market and the raising of capital. The Company has begun
generating revenue from licensing agreements and has taken a conditional order
for one development prototype machine related to one of those license agreements
as of December 31, 2009.
 
 Basis of
Presentation
 
 The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
pursuant to the rules and regulations of the Securities and Exchange Commission
(“SEC”).
 
 Prior to
September 22, 2006, GRC was a shell company (“old GRC (shell)”).
 
 On
September 22, 2006, the old GRC (shell) completed the acquisition of Carbon
Recovery Corporation (“CRC”), a New Jersey corporation formed on July 19, 2002,
pursuant to a July 2006 plan and agreement of reorganization (“July 2006 CRC
Acquisition Agreement”).  See Recapitalization Transaction described
below.
 
 On
December 31, 2006, the Company completed the acquisition of Mobilestream Oil,
Inc. (“Mobilestream”) in a transaction deemed to be a merger of entities under
common control.  See Mobilestream Transaction described
below.
  F-14
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Recapitalization
Transaction
 
 Each of
the foregoing transactions changed the reporting entity of the
Company.  As a result of the CRC transaction, the Company’s reporting
reflected the historical accounts of CRC.  Subsequently, as a result
of the Mobilestream transaction, the Company’s financial statements were
combined with Mobilestream on an “as-if” pooling basis since the date common
control was established. As a result of a February 2006 recapitalization
transaction between Mobilestream, legal acquirer, and PSO Enterprises, Inc.
(“PSO”) (surviving corporation of a January 2006 merger with a related party,
Careful Sell Holdings, LLC (“Careful Sell”)), accounting acquirer, common
control was established at February 17, 2005, the inception date of Careful
Sell.
 
 Pursuant
to the July 2006 CRC Acquisition agreement which was effectuated on September
22, 2006, the old GRC (shell) assumed certain specified liabilities of CRC
and  issued 48,688,996 shares of its common stock (including
37,500,000 shares representing Mobilestream’s ownership of the identical number
of shares of CRC common stock) to CRC for substantially all of the assets of
CRC.  The assets of CRC, which were carried at a book value of zero,
included an exclusive license from Mobilestream to exploit the patent pending
application for the use of the Technology.  As part of the
transaction, in exchange for CRC’s 3,908,340 Class B warrants, 1,397,600 Class D
warrants and 1,397,600 Class E warrants, old GRC (shell) issued to the holders
thereof  an identical number (and classes) of warrants.  The
Class B and Class D warrants have an exercise price of $2.75 and the Class E
warrants have an exercise price of $4.00.  See Note 11 for further
discussion of the accounting for the warrants.
 
 The above
transaction has been accounted for as a reverse merger (recapitalization) with
CRC being deemed the accounting acquirer and old GRC (shell) being deemed the
legal acquirer.  No goodwill has been recognized since old GRC (shell)
was a shell company.  Accordingly, the historical financial
information presented in the accompanying consolidated financial statements is
that of CRC as adjusted to give effect to any difference in the par value of the
legal acquirer’s and the accounting acquirer’s stock with an offset to
additional paid-in capital.  The historical basis of the assets and
liabilities of CRC, the accounting acquirer, have been carried over in the
recapitalization.
 
 Net
liabilities of old GRC (shell) as of September 22, 2006 were as
follows:
 
 Intangible
      asset
              
              $
              -Liabilities:Convertible
      debenture with accrued interest
              
              
              120,683Total
      net liabilities
              
              $
              120,683
  F-15
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Mobilestream
Transaction
 
 On
December 31, 2006, the Company acquired the assets of Mobilestream pursuant to a
plan and agreement of reorganization dated November 28, 2006 (the "Mobilestream
Acquisition Agreement") between the Company and Mobilestream. At the time of the
Mobilestream Transaction, Frank Pringle (“Pringle”), our former Chief Executive
Officer owned approximately 86% of all the issued and outstanding shares of
Mobilestream.  The Mobilestream assets acquired consisted of (i) the
then four patents pending for the Technology carried at a book value of zero,
(ii) approximately $1,678,000 of cash and (iii) approximately $149,000 of fixed
assets.  Mobilestream also owned 37,500,000 shares of the Company’s
common stock which was cancelled as part of the transaction.  The
Company issued 11,145,225 shares of its Common Stock to Mobilestream and
35,236,188 shares of its 2006 Series of Convertible Preferred Stock (or
“Preferred Stock A”) to the holder of the 2006 series of convertible preferred
stock of Mobilestream.  Lastly, the Company issued to Mobilestream
27,205,867 common stock purchase warrants (the "Mobilestream Warrants") to
purchase shares of its common stock on the basis of one Mobilestream Warrant for
each three shares of either Mobilestream common stock or preferred stock,
exercisable at $4.75 per share.   The 23,500,000 Mobilestream
Acquisition Warrants issued directly to Mr. Pringle were not held in a
liquidating trust as required by the terms of the Mobilestream acquisition
agreement.  Although these warrants were not held in the liquidating
trust, the Company believes that they should still be subject to the terms of
the Mobilestream acquisition documents.  On October 23, 2007, the
Company cancelled the 23,500,000 Mobilestream Acquisition Warrants which were
voluntary return to the Company by Mr. Pringle.  See Note 11 for
further discussion of the Mobilestream Warrants.  The total cost of
the acquisition of Mobilestream has been allocated to the assets acquired and
the liabilities assumed based on their historical cost in accordance with ASC
No. 805-10-65, “Business
Combinations,, Transactions between Entities under Common
Control”.
 
 Careful
Sell
 
 Careful
Sell was a Delaware limited liability company formed and managed by Pringle, the
Company’s former Chief Executive Officer.  Pringle and his spouse, a
former director of the Company, owned all of the limited liability interests of
Careful Sell.  Careful Sell was the owner of all rights to the
inventions of Pringle.  In February 2005, CRC formalized a prior
intended agreement with Careful Sell (“February 2005 Agreement”).  The
February 2005 Agreement transferred to CRC, the rights to commercialize such
inventions and to operate and use the related processes and apparatus to make,
sell, use and otherwise dispose of products which may be processed utilizing the
inventions.  As consideration, CRC issued Careful Sell 37,500,000
shares of its common stock.  The February 2005 Agreement superseded a
prior agreement not formalized between CRC and the managing members of Careful
Sell in 2002.
  F-16
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 NOTE
2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Principles of
Consolidation
 
 The
consolidated financial statements include the accounts of GRC and its
wholly-owned subsidiaries, Global Scientific Corporation and Global Heavy Oil
Corporation. All significant intercompany balances and transactions have been
eliminated in consolidation.
 
 Use of
Estimates
 
 The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.
 
 Cash and Cash
Equivalents
 
 The
Company considers all highly-liquid debt instruments and other short-term
investments with an initial maturity of three months or less to be cash or cash
equivalents.
 
 At
December 31, 2009, the Company maintained cash and cash equivalent balances at
two financial institutions, each of which is insured for up to $250,000 by the
Federal Deposit Insurance Corporation.  At December 31, 2009 the
Company had no uninsured cash and cash equivalent balances.
 
 Start-up
Costs
 
 In
accordance with FASB ASC 720-15-15, “Reporting on the Costs of Start-up
Activities”, the Company expensed all costs incurred in connection with
the start-up and organization of the Company.
 
 Revenue
Recognition
 
 The
Company recognizes revenues in accordance with the guidance in the Securities
and Exchange Commission (“SEC”) Staff Accounting Bulletin No.
104.  Accordingly, revenue is recognized when persuasive evidence of
an arrangement exists, when the selling price is fixed or determinable, when
shipment or delivery or performance of services has been rendered and
collectability is reasonably assured.
 
 Under the
Company’s current strategy, its revenue is likely to be generated from the
development, licensing or sale of our proprietary Technology and/or design,
manufacture and sale of machinery and equipment units.  For machinery
and equipment sales revenue will be recognized when the machinery and equipment
is shipped, installed and operating successfully at the destination
site.  For a licensing agreement, revenue is recognized when services
have been rendered per the terms of the licensing agreement.
 
 For the
year ended December 31, 2009 all of the Company’s revenues were generated from a
licensing agreement (see Footnote 14 Schlumberger Agreement).
  F-17
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Short-term
Investments
 
 Cash in
excess of operating requirements is invested in marketable debt and equity
securities, all of which are classified as available for sale, and are carried
at their fair value.  The unrealized gains or losses of these
investments, which are deemed to be temporary in nature are recorded as part of
accumulated other comprehensive income (loss), were included in the consolidated
statements of operations and comprehensive income and also in the consolidated
statement of stockholders’ equity. Realized gains or loss and declines in value
judged to be other-than-temporary on these investments are recognized as
realized gains or losses in the consolidated statements of operations and
comprehensive income.  As of December 31, 2008, the Company had
reclassified a significant amount of unrealized losses from the consolidated
statement of stockholders’ equity and other comprehensive loss in the
consolidated statement of operations to realized losses in the consolidated
statement of operations and comprehensive income due to the probability that the
Company may not get any new significant inflows of cash, and for the year ended
December 31, 2009, will have liquidated all of the short-term investments and
recognized realized losses associated with these transactions.
 
 Property and
Equipment
 
 Property
and equipment are stated at cost less accumulated depreciation and amortization.
The Company computes depreciation and amortization using the straight-line
method over the estimated useful lives of the assets acquired as
follows:
 
 Testing
      equipment
                
                5 – 7 yearsVehicles
                
                3
      – 5 yearsOffice
      and computer equipment
                
                3
      – 5 yearsLeasehold
      improvements
                
                3   yearsPhone
      equipment – Capital lease
                
                3   yearsPrototype
      – “Patriot-1”
                
                3   years
 
 For the
year ended December 31, 2008 the Company had Construction-in-progress which
consists of a commercial prototype machine “Patriot-1” which was under
construction and was not put into service until June 2009.  Beginning
in June 2009, this prototype machine will be used to demonstrate the
capabilities of the Technology. This prototype machine is classified as
Prototype equipment and will be depreciated over the useful life, three
years.
 
 When
assets are retired or otherwise disposed of, the cost and related accumulated
depreciation or amortization are removed from the accounts, and any resulting
gain or loss is reflected in the consolidated statements of
operations.  Repairs and maintenance that do not extend the useful
lives of the related assets are expensed as incurred.
 
 Long-lived
Assets
 
 In
accordance with ASC 360-10-50 “Accounting for the Impairment or
Disposal of Long-Lived Assets”, property and equipment and other
long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of these assets may not be
recoverable.  The Company assesses an asset for impairment based on
estimated future cash flows from the asset.  If the carrying amount of
an asset exceeds its estimated future cash flows, an impairment charge is
recognized by the amount by which the carry amount of the asset exceeds the fair
value of the assets.
  F-18
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Patents
 
 Legal
fees associated with patents, which are expected to be issued, are recorded as
prepaid patent costs on the accompanying consolidated balance
sheets.  Upon approval by the relevant patent office, the prepaid
patent costs will be reclassified to an intangible asset, and amortized over the
expected life of the patent. The
value of the patent(s) will be reviewed each year for possible impairment and
expensed in the year it is determined that a write-down in the value of the
patent is required.  Prepaid patent costs associated with patents
which are not approved or abandoned are expensed in the period in which such
patents are not approved.
 
 Research and Development
Costs
 
 The
Company complies with the accounting and reporting requirements of FASB ASC
730-10, “Accounting for
Research and Development Cost)”.Research and development (“R
& D”) costs consist of all activities associated with the development and
enhancement of products using the Company’s microwave Technology.  R
& D costs consist primarily of contract engineer labor and salaries of our
in-house engineers, lab supplies used in testing and expenses of equipment used
to test and develop our Technology.   R & D costs are
expensed when incurred.   The amounts charged to operations for
the years ended December 31, 2009 and 2008, and for the cumulative period July
19, 2002 (inception) to December 31, 2009 were $1,607,395, $871,622, and
$2,888,434, respectively.
 
 Stock-Based
Compensation
 
 Effective
January 1, 2006, the Company adopted FASB ASC No. 718 (formerly SFAS No. 123R),
“Share-Based Payment,”
requiring the expense recognition of the estimated fair value of all share-based
payments issued to employees. Prior to this, the estimated fair value associated
with such awards was not recorded as an expense, but rather was disclosed in a
footnote to the Company’s consolidated financial statements. The compensation
cost associated with these awards is recorded as an expense within the same
functional expense category as cash compensation for the respective grantee. No
tax benefit has been recognized with respect to this expense.
 
 The
valuation of employee stock options and warrants is an inherently subjective
process since market values are generally not available for long-term,
non-transferable employee stock options and warrants. Accordingly, an option
pricing model is utilized to derive an estimated fair value. In calculating the
estimated fair value of its stock options and warrants, the Company used a
Black-Scholes pricing model which requires the consideration of the following
seven variables for purposes of estimating fair value:
 
 ·
              the
      stock option or warrant exercise
price,
 ·
              the
      expected term of the option or
warrant,
 ·
              the
      grant date fair value of our common stock, which is issuable upon exercise
      of the option or warrant,
 ·
              the
      expected volatility of our common
stock,
 ·
              expected
      dividends on our common stock (we do not anticipate paying dividends for
      the foreseeable future),
  F-19
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 ·
              the
      risk free interest rate for the expected option or warrant term,
      and
 ·
              the
      expected forfeiture rate.
 
 Of the
variables above, the selection of an expected term and expected stock price
volatility are the most subjective. Our estimate of the expected term for
options and warrants awarded in the years ended December 31, 2009 and 2008 was
between six-months and five years and was derived based on the weighted average
of the sum of the vesting term and the original contract term at the date of
issuance. In estimating its stock price volatility, the Company analyzed its
historic volatility for a period equal to the expected term of its stock options
and warrants awarded for the years ended December 31, 2009 and 2008, by
reference to actual stock prices during this period and calculated an estimated
volatility between 115% to 168%.  The Company believes that each of
these estimates, including both expected term and volatility, is reasonable in
light of the data it has analyzed. However, as with any estimate, the ultimate
accuracy of these estimates is only verifiable over time. The specific valuation
assumptions noted above were applied to stock options and warrants that the
Company granted subsequent to its adoption of ASC No. 718. The Company expects
that share-based compensation expense will continue to have a material impact on
its financial results for all subsequent fiscal years.
 
 Prior to
January 1, 2006, the Company accounted for its stock-based compensation using
the intrinsic value method of accounting under the provisions of Accounting
Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to
Employees”. The Company’s stock-based compensation awards have generally
been granted with an exercise price equal to the estimated fair value of the
underlying common stock on the grant date, and accordingly, any stock-based
compensation related to stock option grants was not material under APB No. 25.
The Company applied the disclosure provisions under ASC  No. 718,
“Accounting for Stock-Based
Compensation” and related interpretations as if the fair value had been
applied in measuring compensation expense.
 
 The
effect on the Company’s net loss as if the Company had applied the fair value
recognition provisions of ASC No. 718 to stock-based compensation during the
cumulative period July 19, 2002 (inception) to December 31, 2008 was not
material.
 
 On
January 1, 2006, the Company adopted the provisions of ASC 718 using the
modified prospective transition method. The total expense associated with
stock-based employee compensation was approximately $2,276,000 for the year
ended December 31, 2009, and $1,040,000 for the year ended December 31, 2008 and
$3,316,000 for the period July 19, 2002 (inception) to December 31,
2009.
 
 For
non-employees, stock grants and stock issued for services are valued at either
the invoiced or contracted value of services provided, or to be provided, or the
fair value of stock at the date the agreement is reached, whichever is more
readily determinable.  Warrants or options issued for services
provided, or to be provided, are valued at fair value at the date the agreement
is reached.
  F-20
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Earnings (Loss) Per Share of
Common Stock
  The
Company complies with the accounting and reporting requirements of ASC No. 260,
“Earnings Per
Share”.   Basic loss per share is calculated by dividing
net loss attributable to common shares by the weighted average number of
outstanding common shares for the period.  Diluted earnings per common
share includes dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants and the conversion of
convertible preferred stock.
 
 Unexercised
common stock options and warrants to purchase common stock, and preferred stock
convertible into common stock as of December 31, 2009 and 2008 respectively, are
as follows:
 
 2009
              
              
              2008Options
              
              
              6,200,000
              
              
              
              5,200,000Warrants
              
              
              22,500,836
              
              
              
              21,425,795Convertible
      preferred stock
              
              
              -
              
              
              
              2,500Total
              
              
              28,700,836
              
              
              
              26,628,295
 
 The
foregoing common stock equivalents were excluded from the calculation of diluted
net loss per common share because their inclusion would have been anti-dilutive
as of December 31, 2009 and 2008.
 
 Income
Taxes
 
 The
Company accounts for income taxes in accordance with ASC No. 740, “Accounting for Income Taxes”,
which requires an asset and liability approach to financial accounting and
reporting for income taxes.  Deferred income tax assets and
liabilities are computed annually for differences between the financial
statement and the tax basis of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected affect taxable
income.  Valuation allowances are established when necessary to reduce
deferred tax assets to the amounts expected to be realized (see Note
7).
 
 The
Company also complies with the provisions of the ASC No. 740-10 (formerly FIN
No. 48 “Accounting for
Uncertainty in Income Taxes”.  The regulation prescribes a
recognition threshold and measurements process for recording in the financial
statements uncertain tax positions taken or expected to be taken in a tax
return.  The regulation also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosures and transitions.  The Company adopted ASC 740-10 (formerly
FIN 48) effective January 1, 2007 and its adoption did not have an impact on the
Company’s consolidated financial position, results of operations or cash
flows.
  F-21
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Derivative Financial
Instruments
 
 The
Company’s derivative financial instruments include freestanding warrants and
options to purchase the Company’s common stock.   The Company’s
derivative liabilities relate solely to the CRC Acquisition agreement Class B,
class D and class E warrants.  Under certain circumstances that would
require the Company to settle these instruments in cash, and without regard to
probability, the Company classifies of all these instruments as
liabilities.  The Company adjusts these financial instruments to fair
value at each reporting date, with such adjustments reflected in the Company’s
consolidated statements of operations and comprehensive loss.
 
 Fair Value
Measurements
 
 On
January 1, 2008, the Company adopted FASB ASC 820-20-50 (formerly SFAS No. 157)
“Fair Value
Measurements”.  The FASB ASC provision defines fair value,
provides a consistent framework for measuring fair value under generally
accepted accounting principles and expands fair value financial statement
disclosure requirements.  Fair value valuation techniques are based on
observable and unobservable inputs.  Observable inputs reflect readily
obtainable data from independent sources, while unobservable inputs reflect our
market assumptions. The provision classifies these inputs into the following
hierarchy:
 
 ·
              Level
      1 Inputs – Quoted prices for identical instruments in active
      markets
 ·
              Level
      2 Inputs – Quoted prices for similar instruments in active markets; quoted
      prices for  identical or similar instruments in markets that are
      not active; and model-derived valuation whose inputs are observable or
      whose significant value drivers are
observable
 ·
              Level
      3 Inputs – Instruments with primarily unobservable value
      drivers
 
 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 — Overall(“ASC 105-10”).  ASC 105-10 establishes
the FASB Accounting Standards
Codification(the “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 U.S.
generally accepted accounting principles (“GAAP”).  Rules and
interpretive releases of the SEC under authority of federal securities laws are
also sources of authoritative U.S. GAAP for SEC registrants.
 
 Effective
January 1, 2009, the Company adopted FASB ASC Topic 805, Business Combinations(“ASC
805”).  ASC 805 establishes principles and requirements for how the
acquirer of a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree.  ASC 805 also provides guidance for
recognizing and measuring the goodwill acquired in the business combination and
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination.  ASC 805 also provides guidance for recognizing changes
in an acquirer’s existing income tax valuation allowances and tax uncertainty
accruals that result from a business combination transaction as adjustments to
income tax expense.
  F-22
 
 Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 In
April 2009, the FASB issued updated guidance related to business
combinations, which is included in the Codification in ASC 805-20, Business Combinations — Identifiable
Assets, Liabilities and Any Non-controlling Interest(“ASC
805-20”).  ASC 805-20 amends and clarifies ASC 805 to address
application issues regarding initial recognition and measurement, subsequent
measurement and accounting and disclosure of assets and liabilities arising from
contingencies in a business combination.  In circumstances where the
acquisition date fair value for a contingency cannot be determined during the
measurement period and it is concluded that it is probable that an asset or
liability exists as of the acquisition date and the amount can be reasonably
estimated, a contingency is recognized as of the acquisition date based on the
estimated amount.  ASC 805-20 is effective for assets or liabilities
arising from contingencies in business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008.  The Company does not expect the
adoption of this ASC to have any material impact on its consolidated financial
statements.
 
 In May
2009, the FASB issued general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or available to be issued.  The Company adopted these
standards as of and for the year ending December 31, 2009.
 
 Reclassifications
 
 Certain
amounts for the year ended December 31, 2008 have been reclassified in the
comparative consolidated financial statements to be comparable to the
presentation for the year ended December 31, 2009.   These
reclassifications, along with certain income adjustments, are further described
in Note 20.
 
 NOTE
3-           GOING
CONCERN
 
 As shown
in the accompanying consolidated financial statements, the Company incurred
substantial net losses in the amount of $12,292,104 and $15,495,349 for the
years ended December 31, 2009 and 2008, respectively, and $42,062,378 for the
cumulative period from July 19, 2002 (inception) to December 31, 2009. The
Company also had negative cash flows from its operations in the amount of
$4,866,873, $5,175,036, and $17,411,366 for the years ended December 31, 2009
and 2008, respectively, and for the cumulative period from July 19, 2002
(inception) to December 31, 2009.  Additionally, the Company has had
no material revenue since inception.
 
 Based on
the Company’s current operating plan, total cash expenditures needed for the
next twelve months are expected to exceed the Company’s cash of approximately
$41,000 as of December 31, 2009.  The Company’s assessment of its cash
needs may be affected by changes in the assumptions relating to the Company’s
strategy, technological and engineering requirements in the development of its
products as well as payroll, staff and administrative related
matters.
 
 On April
23, 2009, the Company, through a wholly-owned subsidiary, entered into a Joint
Development Agreement pursuant to which the Company received $300,000 on May 22,
2009 and another $300,000  in April 2010 and upon a successful
completion of Phase I of the Agreement and the beginning of Phase II the Company
is to receive a $1,000,000 one-time engineering fee (See Note 14 – Commitments
and Contingencies – Schlumberger Agreement).  On October 14, 2009, the
Company entered into a licensing and purchasing agreement and received a
$750,000 licensing fee (see Note 14 – Commitments and Contingencies – Universal
Alternative fuels Agreement).
  F-23
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 The
Company has completed a development prototype fixed frequency microwave reactor
system, named “Patriot-1” which it has used to demonstrate the decomposition of
tires into diesel oil, combustible gas and carbon char.  During May
4-8, 2009 and June 8-11, 2009, the Company provided public demonstrations of the
Patriot-1 to prospects, partners and dignitaries at its outside contract
manufacturer’s facility (Ingersoll Production System) located in Rockford,
Illinois and has since relocated the Patriot-1 to a new facility in North
Carolina in April 2010.  As of December 31, 2009, the Company did not
have any committed orders for its equipment.  (However, see Note 14 -
with respect to an order for a development prototype machine received on October
14, 2009 from Universal Alternative Fuels, Inc.).  Management believes
that it will take the Company approximately twelve months to deliver a system
from the time the Company receives an order. Management currently anticipates
that each order will be accompanied by a deposit from the purchaser which will
be recorded as deferred revenue until the equipment is shipped, installed and
operating successfully at the destination site.
 
 The
Company’s plans to address the expected cash shortfall are dependent upon its
ability to raise capital or to secure significant sales orders of our system as
a source of revenue.  Subsequent to the balance sheet date of December
31, 2009, the Company has raised approximately $2.0 million in cash from various
equity and debt transactions.  There is no guarantee that the Company
will be able to raise enough capital or generate revenues to sustain its
operations thus raising substantial doubt about the Company’s ability to
continue as a going concern.  The accompanying consolidated financial
statements have been prepared assuming the Company will continue as a going
concern, which contemplates the realization of assets and liabilities in the
normal course of business.
 
 The
consolidated financial statements do not include any adjustments relating to the
recoverability or classification of recorded assets and liabilities that might
result should the Company be unable to continue as a going
concern.
  F-24
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 NOTE
      4-
              PROPERTY AND
      EQUIPMENT
 
 Property
and equipment as of December 31, 2009 and 2008 were as
follows:
 
 Estimated
      Useful
                                                                  Lives
      (Years)
                                                                
                                                                
                                                                2009
                                                                
                                                                
                                                                2008Testing
      equipment
                                                                
                                                                5 –
      7
                                                                
                                                                
                                                                $
                                                                493,906
                                                                
                                                                
                                                                $
                                                                493,906Vehicles
                                                                
                                                                3 –
      5
                                                                
                                                                
                                                                
                                                                0
                                                                
                                                                
                                                                
                                                                44,952Office,
      future & computer equipment
                                                                
                                                                3 –
      5
                                                                
                                                                
                                                                
                                                                132,079
                                                                
                                                                
                                                                
                                                                57,362Leasehold
      improvements
                                                                
                                                                3
                                                                
                                                                
                                                                
                                                                17,820
                                                                
                                                                
                                                                
                                                                17,820Phone
      equipment –Capital lease
                                                                
                                                                3
                                                                
                                                                
                                                                
                                                                32,432
                                                                
                                                                
                                                                
                                                                32,432Prototype
      – “Patriot-1”
                                                                
                                                                3
                                                                
                                                                
                                                                
                                                                1,352,986
                                                                
                                                                
                                                                
                                                                930,079Total
                                                                
                                                                
                                                                
                                                                2,029,223
                                                                
                                                                
                                                                
                                                                1,576,551Less
      accumulated depreciation and amortization
                                                                
                                                                
                                                                
                                                                599,022
                                                                
                                                                
                                                                
                                                                218,252Net
      Property and Equipment
                                                                
                                                                
                                                                
                                                                
                                                                
                                                                $
                                                                1,430,201
                                                                
                                                                
                                                                $
                                                                1,358,299
 
 Depreciation
expense charged to operations for the years ended December 31, 2009 and 2008,
and the cumulative period July 19, 2002 (inception) to December 31, 2009, was
$375,393, $98,909 and $657,246, respectively.
 
 The
prototype machine Patriot-1 was completed in second quarter 2009, prior to that
it was consider Construction-in-progress.  In the second quarter of
2008, it was determined that some modifications were needed and some parts
became obsolete, so a charge of $303,449 was taken to R & D expense at that
time. The completed commercial prototype machine will be used to demonstrate the
capabilities of the Technology and will not be sold.
 
 NOTE
      5 -
              LOAN PAYABLE – OFFICER
      OF THE COMPANY
 
 On
November 28, 2007, the chief financial officer (“CFO”), Jeffery J. Andrews,
loaned the Company $150,000 at an interest rate of 9.5%.   In
April 2008, the Company repaid $120,000 of the loan.  The remaining
balance of $30,000, as well as the accrued interest amount of $6,173, was repaid
in full in August 2008.  Interest expense on the loan had been accrued
and expensed monthly.
  F-25
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 NOTE
6 - LOAN PAYABLE –
EQUIPMENT
 
 In
January 2006, the Company entered into a five year loan related to the purchase
of new equipment. The principal amount of the loan is $75,000, and it bears
interest at a rate of 13.43% annually.  Monthly payments on the loan,
including interest, are approximately $1,700.  In October 2006, the
Company entered into a three year loan related to the purchase of lab
equipment.  The principal amount of the loan is $73,817, and it bears
interest at a rate of 8.71% per annum. Monthly payments on the loan, including
interest, are approximately $2,400.
 
 2009
                
                
                2008$75,000
      Loan at 13.43%
                
                $
                17,738
                
                
                $
                33,475$73,817
      Loan at 8.71%
                
                
                -
                
                
                
                18,19617,738
                
                
                
                51,671Less
      current maturities
                
                
                17,738
                
                
                
                34,850Loans
      payable, long-term
                
                $
                -
                
                
                $
                16,821
 Aggregate
future principal payments are $17,738 for the year ending December 31, 2010 and
none for the years beyond 2010.
 
 NOTE
7-  PROVISION FOR INCOME
TAXES
 
 At
December 31, 2009 and 2008, the deferred tax assets consist of the
following:
 
 2009
                
                
                2008Net
      operating loss carryforwards
                
                $
                1,113,000
                
                
                $
                467,000Temporary
      difference due to start up costs
                
                
                21,180,000
                
                
                
                16,265,00022,293,000
                
                
                
                16,732,000Valuation
      allowance
                
                
                (22,293,000
                )
                
                
                (16,732,000
                )Deferred
      tax assets, net of allowance
                
                $
                -
                
                
                $
                -
 Deferred
income taxes are recognized primarily for the temporary differences created on
the timing of the reporting of various start up costs for financial statement
and income tax purposes.  The Company has a net operating loss
carryforward of approximately $2,783,000 for federal and state tax
purposes.  This operating loss carryforward may be used to offset
future taxable income through 2028.
 
 The
Company established valuation allowances equal to the full amount of the
deferred tax assets due to the uncertainty of the utilization of the operating
losses in future periods.  In addition, utilization of the net
operating loss carry-forward may be limited based upon changes in ownership
interests.  For the years ending December 31, 2009 and 2008, the
Company’s effective tax rate differs from the federal statutory rate of 34%
principally due to the effect of temporary differences created due to the timing
of deductibility of a significant portion of the Company’s
expenses.
  F-26
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 NOTE
8 -      CAPITAL
LEASES
 
 In June
2008, the Company entered into a three-year capital lease related to the
purchase of new phone equipment.At December 31, 2009,
the total cost of the phone equipment is $32,432, and the accumulated
depreciation is $17,117. The lease payments are
$1,293 per month. As of December 31, 2009, the minimum lease payments under the
capital lease are as follows:
 
 Year
      ending
                
                Amount2010
                
                $
                15,5162011
                
                
                3,892Total
      minimum lease payments
                
                
                19,408Less
      amounts representing interest
                
                
                1,906Present
      value of net minimum lease payments
                
                
                17,502Less
      current obligations
                
                
                12,250Long-term
      portion of obligation under capital lease
                
                $
                5,252
 NOTE
      9 -
              OPERATING
      LEASES
 
 The
Company has four separate lease agreements.  The Company leases two
separate facilities in New Jersey.  (i)  The lab and office
space in New Jersey under a lease agreement that commenced June 1, 2006, the
monthly lease payments were $5,000 per month and the lease expired on May 31,
2009. The Company entered into a new lease on May 12, 2009 to rent only a
portion of the current space, the monthly lease payments are approximately
$1,700 per month and the lease expires on May 31, 2012, (see Note 22 -
subsequent events).  (ii) The Company also leases manufacturing space
in Rockford, Illinois under a lease agreement that commenced May 1, 2008, the
monthly lease payments are $2,703 per month and the lease expires on April 30,
2010.  (iii)In October 2008, the Company entered into a new lease for
office space in New Jersey, and a deposit of $47,500 was made in October
2008.  The Company moved into the 5,124 square feet of office space in
March 2009.   The lease is for five years with monthly payments
beginning at $6,567 per month and the lease expires April 2014.  (iv)
The Company entered into a new lease for lab space and office space for new
corporate headquarters in North Carolina in March 2010.   The
lease is for five years with monthly payments beginning at $13,613 per month and
the lease expires March 2015.   With all leases, the Company is
required to pay property taxes, utilities, insurance and other costs relating to
the leased facilities.
 
 Rent
expense for the years ended December 31, 2009 and 2008, and for the cumulative
period July 19, 2002 (inception) to December 31, 2009 was approximately
$151,000, $85,000 and $399,000, respectively.
  F-27
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Minimum
lease payments under the operating lease are approximately as
follows:
 
 Year Ending December
      31,2010
                  
                  
                  234,0002011
                  
                  
                  270,0002012
                  
                  
                  265,0002013
                  
                  
                  263,0002014
                  
                  
                  201,0002015
                  
                  
                  45,000$
                  1,278,000
  NOTE
10 -     RELATED PARTY
TRANSACTIONS
 
 During
the period July 19, 2002 (inception) through December 31, 2006, Lois Pringle
loaned the Company funds totaling $63,550 to cover various operating
expenses.  The loan was non-interest bearing and had no specific
repayment terms.  The balance of this loan was repaid in March
2006.
 
 During
the period July 19, 2002 (inception) through December 31, 2006, the Company paid
Allen & Allen Marketing, Inc., an entity controlled by David Allen, a former
Director and Vice-President of the Company, total payments of approximately
$148,000 for consulting services.
 
 On May
17, 2007, the Company authorized the purchase of shares of the Company’s common
stock from Lois Pringle, wife of Pringle, the Company’s then CEO.  The
Company purchased 94,961 shares for $66,471 in cash (see Note 11).
 
 On August
13, 2008, the Company authorized the purchase of shares of the Company’s common
stock from Pringle, the Company’s then Chairman.  The Company
purchased 6,600,000 shares for $1,650,000 in cash (see Note 11).
 
 For the
years ended December 31, 2009 and 2008, and for the period from July 19, 2002
(inception) to December 31, 2008, the Company has made payments directly to
Pringle, Lois Pringle (as former CEO), and other persons related to Pringle of
approximately $0, $4,000, and $408,000, respectively.  Of the
cumulative amount since inception, approximately $351,000 were payments for
services provided to the Company, and the remainder of $57,000 were for
reimbursement of expenses.
 
 The
Company has engaged Clark Resources, Inc. (“Clark”), a governmental relations
consulting firm located in Harrisburg, Pennsylvania, to provide consulting
services with respect to governmental issues concerning permits and
funding.  The Company has a monthly retainer agreement with Clark and
for the years ended December 31, 2009 and 2008, and for the cumulative period
July 12, 2002 (inception) to December 31, 2009, paid Clark Resources a total of
$15,000, $60,000, and $169,670, respectively.  The president and CEO
of Clark is Frederick A. Clark, who has served as a director of the Company
since December 2006.  On March 8, 2010, Mr. Clark resigned as a member
of the Board of directors (see Note 22-Subsequent events).
  F-28
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 In
November 2007, the Company entered into a six month consulting agreement with
Worldwide Strategic Partners, Inc. (“Worldwide”), a corporation in which General
Lincoln Jones III, one of our directors, has an ownership interest in excess of
ten percent. The consulting agreement was executed and delivered approximately
six-months before General Jones became a director of our Company. Subsequent to
the execution of the consulting agreement with Worldwide, the Company issued a
total of 150,000 shares of its common stock to Worldwide and its assignees
valued at $448,000 through June 30, 2008, of which 31,250 shares were
distributed to General Jones. On May 26, 2008, the Company and Worldwide
terminated the November 2007 consulting agreement by agreeing to pay Worldwide a
total of 275,000 shares of its common stock for services rendered, inclusive of
the 150,000 shares previously issued. The residual expense of $281,250
associated with consulting services was recorded to the consolidated statement
of operations and comprehensive loss in general and administrative expenses in
the third quarter of 2008.  On May 26, 2008, the Company entered into
a new five-year consulting agreement with Worldwide expiring on May 26, 2013,
pursuant to which Worldwide will identify potential acquisition candidates or
joint venture partners for the Company, and upon closing a transaction with any
such candidate, the Company will pay Worldwide a fee based upon a percentage of
the value of the transaction beginning with 5% of the first $1,000,000 dollars,
and declining 1% for each successive $1,000,000 increase in transaction value
until Worldwide receives 1% of the transaction value in excess of
$4,000,000.  On March 8, 2010, General Jones III resigned as a member
of the Board of directors (see Note 22-Subsequent events).
 
 On
September 4, 2008, the Company entered into a consulting agreement with Paul
Sweeney for services relating to investor relations and other investment banking
services.  On September 8, 2008, the Company issued 1,500,000 shares
of its common stock to Mr. Sweeney valued at $1,440,000 for his consulting
services.  The Company recorded an expense of $960,000, for the year
ended December 31, 2009 and $480,000 for the year ended December 31, 2008
respectively in the consolidated statements of operations and comprehensive loss
for the twelve month periods ended December 31, 2009.   Mr. Paul
Sweeney has served as a director of the Company since August 2008.
 
 On
October 1, 2008, the Company entered into a four month consulting agreement with
LP (Origination) Limited (“LP”), a company incorporated in the United Kingdom,
to provide consulting services relating to the oil and gas
industries.  The Company issued 100,000 shares of its common stock to
LP on October 7, 2008 for payment of these consulting services,
and  $37,250 of the total charge of $149,000 was recorded as prepaid
services on the condensed consolidated balance sheet at December 31,
2008.  The president of LP is Peter A. Worthington, who has served as
a director of the Company since August 2008.  On May 28, 2009, the
Board of Directors of the Company appointed Mr. Worthington as Interim Chairman
of the Board of Directors.  On July 6, 2009, the Board of Directors
appointed Mr. Worthington as the Company’s Chief Executive
Officer.  In addition to the common shares issued to LP, the Company
also paid a fee in December 2008 in the amount of $90,000 to Mr. Worthington for
the services provided under the agreement.  On May 11, 2009, the
Company entered into another consulting agreement with LP with an effective date
of April 7, 2009, pursuant to which LP has agreed to perform management
advisory, strategic planning and other consulting services as the Company may
request from time to time for a term ending on April 6, 2010, in return for (i)
a payment of $100,000 conditioned upon and to be paid after a specified amount
of sales have been made and for which LP had some significant involvement as set
forth in the consulting agreement, and (ii) 300,000 shares of the Company’s
common stock, which  was  issued on May 12,
2009.  The latest consulting agreement may be renewed by either party
for an additional one year term.   For the twelve months periods
ended December 31, 2009, a charge of approximately $492,250, respectively was
made to operations with respect to consulting expense, which is reflected in
general and administrative expenses on the consolidated statements of operations
and comprehensive loss. Mr. Worthington did not collect a salary for his work as
interim CEO and Chairman of the Board of directors, he was only reimbursed for
living and travel expenses on behalf of the Company but the Company did record
an accrual and an expense of $45,000 for projected compensation costs for his
services as CEO and Chairman of the Board of directors. On November 11, 2009,
Mr. Worthington resigned from the position of Chief Executive Officer of the
Company as well as from its Board of Directors, including as Interim Chairman of
the Board. On December 15, 2009, the Board of Directors awarded Mr. Worthington
200,000 warrants of the Company’s common stock with an exercise price of $.40
per share, an expense of $93,836 was recorded to the consolidated statement of
operations and comprehensive loss for the year ended December 31, 2009, these
warrants were not excisable until April 7, 2010, and expire on April 7,
2012.
  F-29
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 During
the twelve months year ended December 31, 2009 Jonathan Simon, a member of the
Board of Directors since 2007, incurred expenses in the amount of $54,900 on the
behalf of the Company.  The Company recorded an accrual to accounts
payable and expensed $54,900 to the financial statements for the year ended
December 31, 2009, (see Note 22 – subsequent events for details on
settlement).
 
 On
November 11, 2009, the Board elected Mr. Brian Ettinger to the Board of
Directors of the Company and appointed him as the Chairman of the Board, filling
the vacancy created by the resignation of Mr. Worthington.   Mr.
Ettinger, a consultant to the Company since 2008, currently serves as the CEO
and General Counsel for Worldwide Strategic Partners, Inc.
(“WSP”).  General Lincoln Jones III, a former director of the Company,
owns in excess of ten percent of WSP.  The Company currently has a
consulting agreement in place with WSP.  Since January 1, 2008, in
connection with consultant services provided by Mr. Ettinger to the Company, the
Company issued to Mr. Ettinger the following securities: (i) on June 13, 2008,
the Company issued 57,500 shares of its Common Stock to Mr. Ettinger as payment
for consulting services rendered valued at $129,375; (ii) on October 1, 2008,
the Company issued to Mr. Ettinger warrants to purchase 300,000 shares of its
Common Stock in partial payment of consulting services to be performed, which
warrants have an exercise price of $2.00, with 100,000 warrants vesting on each
of June 10, 2009, January 10, 2010 and June 10, 2010; (iii) on October 31, 2008,
the Company issued 150,000 shares of its Common Stock to Mr. Ettinger for
consulting services rendered valued at $232,500; (iv) on April 1, 2009, the
Company issued to Mr. Ettinger warrants to purchase 200,000 shares of its Common
Stock in partial payment of consulting services to be performed, which warrants
have an exercise price of $1.10 per share and expire on varying dates ranging
from January 10, 2012 to June 10, 2012; and (v) on April 22, 2009, the Company
issued 225,000 shares of its Common Stock to Mr. Ettinger for consulting
services rendered valued at $254,250.   On December 15, 2009, the
Company issued Mr. Ettinger 250,000 shares of its Common Stock for consulting
services rendered in November 2009, the services were valued at $145,000 using
the closing day stock price and recorded to the financial
statements.   Also on December 15, 2009 the Company issued Mr.
Ettinger 150,000 shares of its Common Stock for becoming the Company’s Chairman
of the Board of Directors, an expense of $87,000, using the closing day stock
price, was recorded to the statement of operations and comprehensive loss for
the year ended December 31, 2009.   On January 1, 2010, the
Company entered into another Consulting Services Agreement with Brian Ettinger,
the Chairman of the Board of Directors of the Company.  Pursuant to
the Consulting Services Agreement, (A) Mr. Ettinger agreed to provide the
Company with certain consulting services outside his duties as Chairman of the
Board of Directors of the Company and (B) as compensation for the consulting
services to be provided by Mr. Ettinger pursuant to the Consulting Services
Agreement, the Company agreed to issue to Mr. Ettinger (i) 375,000 shares of its
Common Stock (valued at $0.58 per share, the last sale price per share of the
Company’s Common Stock as reported by the Pink Sheets on December 31, 2009),
which shares may be required to be assigned back to the Company in the event of
the termination of the Consulting Services Agreement under certain
circumstances, and (ii) warrants to purchase a total of 500,000 shares of the
Company’s Common Stock at an exercise price of $0.58 per share, half of which
warrants vest on each of July 1, 2010 and January 1, 2011 and which warrants are
exercisable for a 24 month period following the respective vesting
dates. On July 16, 2010 Mr. Ettinger resigned as Chairman of the Board of
Directors and the Company entered into a new consulting service agreement with
Mr. Ettinger (See note 22, subsequent events).
  F-30
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 NOTE
11 - STOCKHOLDERS’ EQUITY
 
 General
 
 On
December 11, 2007, the Company adopted the following Amendments to the Articles
of Incorporation:  (i) reduced the authorized number of shares of
common stock which the Company may issue from 2,000,000,000 to
200,000,000.  (ii) increase the authorized number of preferred shares
which the Company may issue from 50,000,000 to 100,000,000. (iii) reduce the
conversion rate on the 2006 Series of Convertible Preferred Stock that may be
converted into common stock from two shares of common stock to one-half of one
share of common stock for each share of 2006 Series of Convertible Preferred
Stock.
 
 Common and preferred stock
activity related to the Recapitalization and Mobilestream
Transactions
 
 In 2006,
old GRC (shell) issued 48,688,996 shares of its common stock in the
Recapitalization Transaction (see Note 1). The 48,688,996 share issuance
represented the outstanding number of common shares of CRC (the accounting
acquirer) prior to the Recapitalization Transaction, hence retroactive
restatement of historically reported CRC common shares was not necessary. The
72,241 shares of common stock reflected in the accompanying consolidated
statement of stockholders’ equity for the year ended December 31, 2006 reflects
the common shares retained by the shareholders of old GRC (shell).
 
 In 2006,
the Company issued 11,145,225 shares of its common stock and 35,236,188 shares
of its Preferred Stock A in the Mobilestream Transaction (see Note
1).  Mobilestream owned 37,500,000 shares of the Company’s common
stock which was cancelled as part of the Mobilestream Transaction. 35,231,188
shares of the  Preferred Stock A was converted into common stock
during 2008 and the remaining 5,000 shares of the Preferred Stock A was
converted to common stock in January 2009 (see Preferred Stock below for details
of the transactions).
  F-31
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Common stock
financing
 
 During
the year ended December 31, 2009, the Company issued 250,000 shares of common
stock at an average of approximately $0.50 per share for a total of $125,830 in
cash.  The issuance with a private investor and were sold at a
discount on the market price.
 
 During
the year ended December 31, 2008, the Company issued 13,195,925 shares of common
stock at an average of approximately $1 per share and 9,537,782 common stock
purchase warrants for a total of $12,892,731 in cash.  The issuances
were conducted primarily through two private placement offerings to foreign
investors and were sold at a discount on the market price.
 
 During
the year ended December 31, 2007, the Company issued 1,706,386 shares of its
common stock at an average of approximately $.80 per share and 1,706,386 common
stock purchase warrants for a total of $1,168,462 in cash. The issuances
included shares sold at a discount to the market price in a private placement
offering to foreign investors and under a common stock purchase agreement with a
third party.  Also during the year ended December 31, 2007, the
Company issued 186,822 shares of common stock for cash received in 2006 which
was classified as a liability on the December 31, 2006 consolidated balance
sheet, stock to be issued, for $201,343.
 
 On
December 21, 2007, the Company and Professional Offshore Opportunity Fund, Ltd.
(“POOF”) entered into a common stock purchase agreement pursuant to which the
Company sold 1,000,000 shares of its common stock to POOF for $1,000,000. As
part of the common stock purchase agreement, the Company and POOF deposited an
additional 250,000 shares and $250,000, respectively, into escrow with POOF
having the option to purchase the shares.   On June 23, 2008,
POOF exercised its option to purchase the additional 250,000 shares for
$250,000.  Also, as part of the same transaction, the Company issued
625,000 warrants to purchase shares of its common stock to POOF with an exercise
price of $1.50. The warrants contained a cashless exercise provision and on July
3, 2008, POOF converted all of the warrants through a cashless exercise for
325,957 shares of the Company’s common stock. Under the common stock purchase
agreement, the Company deposited 650,000 shares of its common stock in escrow to
be delivered to POOF if the Company did not have a registration statement for
the shares of common stock and warrants it had sold to POOF declared effective
by the Securities and Exchange Commission (“SEC”) on or before June 30, 2008.
The Company did not fulfill that condition, and the 650,000 shares of its common
stock were delivered to POOF on June 30, 2008. The Company recognized an expense
in the accompanying 2008 consolidated statement of operations and comprehensive
loss in the amount of $1,358,500 related to the penalty.
 
 During
the year ended December 31, 2006, the Company issued 2,786,286 shares of common
stock at an average of approximately $1 per share and 2,786,286 common stock
purchase warrants for a total of $2,810,877 in cash.
 
 From July
19, 2002 (inception) to December 31, 2005, the Company (as CRC), issued
2,212,100 shares of common stock at an average of approximately $.80 per share
and 2,212,100 common stock purchase warrants for a total of $1,742,012 in
cash.
 
 During
2002 and 2003, the Company issued 3,760,000 shares of its common stock, net of
cancellations, to the founders of the Company.
  F-32
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Common stock issued for
services to non-employees
 
 During
the year ended December 31, 2009, the Company issued a total of 2,699,000 shares
of its common stock to non-employees for services rendered during the year or to
be rendered.  These services were valued at
$2,431,050.   Included in the 2,699,000 shares of common stock
issued to non- employees
is 850,000 shares for services to be provided through December
2010.  The unamortized amount of prepaid services at December 31, 2009
is $577,250 (see Note 13).  The Company recorded $1,853,800 as general
and administrative expenses related to these issuances in the accompanying
consolidated statement of operations and comprehensive loss for the year ended
December 31, 2009.  The Company also issued 1,050,000 shares of common
stock to a former employee as part of a severance agreement, the value of the
stock issue was $1,134,000 (see Note 14).
 
 During
the year ended December 31, 2008, the Company issued a total of 7,714,849 shares
of its common stock to non-employees for services rendered during the year or to
be rendered.  These services were valued at
$15,590,217.   Included in the 7,714,849 shares of common stock
issued to non- employees
is 2,050,000 shares for services to be provided through September
2009.  The unamortized amount of prepaid services at December 31, 2008
is $1,423,875 (see Note 13).  The Company recorded $12,313,796 as
general and administrative expenses related to these issuances in the
accompanying consolidated statement of operations and comprehensive loss for the
year ended December 31, 2008.
 
 During
the year ended December 31, 2007, the Company issued a total of 2,394,076 shares
of its common stock to non-employees for services rendered during the year.
These services were valued at $5,861,244 and were recorded as general and
administrative expenses on the accompanying consolidated statement of operations
and comprehensive loss.
 
 Included
in the 2,514,669 shares of common stock issued to non-employees are 925,000
shares for services to be provided through September and October of
2008.  The unamortized amount of prepaid services at December 31, 2007
is $1,808,042.  For the year ended December 31, 2007, $773,459 of
expense was recorded as general and administrative expenses on the consolidated
statement of operations and comprehensive loss related to the services performed
during 2007 for these transactions.
 
 In
September 2006, the Company issued 39,123 shares of its common stock and 39,123
common stock purchase warrants to non-employees for services rendered during the
year; these services were valued at $64,721 were recorded as general and
administrative expenses on the accompany consolidated statement of operations
and comprehensive loss.
 
 In
September 2006, the Company issued 22,500 shares of its common stock and 22,500
common stock purchase warrants in exchange for real estate land which was valued
at $45,000.
 
 From July
19, 2002 (inception) to December 31, 2005, the Company (as CRC), issued
1,067,100 shares of its common stock and 1,067,100 common stock purchase
warrants at an average price of approximately $.50 per share, for a total of
$532,300.
 
 From July
19, 2002 (inception) to December 31, 2005, the Company (as CRC), issued 730,800
shares of its common stock and 730,800 common stock purchase warrants in
exchange for real estate which was valued at $730,800.
  F-33
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 From July
19, 2002 (inception) to December 31, 2005, the Company (as CRC), issued 50,000
shares of its common stock as a charitable contribution.  This
transaction was valued at $1 per share, or $50,000 in total, and was recorded as
general and administrative expenses on the accompanying consolidated statement
of operations and comprehensive loss.
 
 Common stock issued for
services to employees
 
 The
Company issued common stock under the “2008 Employee Compensation and Stock
Option Plan”.  A total of 550,000 shares were issued during the year
ended December 31, 2009, and were valued at $319,000. This amount was expensed
as salaries in general and administrative expenses on the consolidated statement
of operations and comprehensive loss for the year ended December 31,
2009.
 
 The
Company issued common stock under the “2008 Employee Compensation and Stock
Option Plan”.  A total of 5,500 shares were issued during the year
ended December 31, 2008, and were valued at $13,240. This amount was expensed as
salaries in general and administrative expenses on the consolidated statement of
operations and comprehensive loss for the year ended December 31,
2008.
 
 In 2007,
the Company issued common stock under the “2007 Employee Compensation and Stock
Option Plan”.  A total of 1,144,500 shares were issued during the
year, and were valued at $3,050,520. This amount was expensed as salaries in
general and administrative expenses on the consolidated statement of operations
and comprehensive loss for the year ended December 31, 2007.   As
part of the 1,144,500 shares issued in 2007, 800,000 shares valued at $2,250,000
were issued to Pringle, and 200,000 shares valued at $579,000 were issued to the
Company’s CFO.
 
 On
October 12, 2005, the Company issued 545,000 shares of its common stock to
Pringle for deferred compensation, valued at $545,000. The stock price on the
date of agreement was $1 per share and was used to determine fair value of this
transaction.  The common stock was to vest over a five-year period
commencing on January 1, 2005.  The Company recognized a related
expense of $27,250 per quarter, for a total of $109,000 per year, until December
31, 2009.  As of December 31, 2007, there was $218,000 of unrecognized
compensation costs related to the non-vested shares.  As a result of
the severance agreement executed with Pringle, this remaining balance of
unrecognized compensation cost was expensed to general and administrative
expenses on the consolidated statement of operations and comprehensive loss in
December of 2008.
 
 Other Common Stock
Transactions
 
 On
September 26, 2006, the Company issued 2,560,974 shares of common stock to the
holder of the convertible debenture which had a principal balance of $102,345
and accrued interest of $18,338, with a conversion price of $.045 per
share.  The total number of shares issuable upon conversion was
2,681,837 shares, but due to limitations in the convertible debenture agreement,
only 2,560,974 shares were then issuable, leaving a balance of 120,863 shares
which were issued by December 31, 2006.
  F-34
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Preferred
Stock
 
 In
January 2009, the remaining 5,000 shares of Preferred Stock A, held by a person
related to the Company’s former Chief Executive Officer, Frank Pringle
(“Pringle”), was converted into 2,500 shares of common stock.
 
 In
October 2007, the Company issued 1,000 shares of new convertible preferred stock
(“Preferred Stock B”) to complete a settlement agreement for services rendered.
These shares were convertible into common stock after one year, for which Rule
144 will apply, by dividing the $400 stated capital by the average of the
closing bid prices of such common stock for the twenty consecutive trading days
prior to
 and
including the day of conversion.  Preferred Stock B had no other
rights attached to it other than conversion rights.  In April 2008,
all of the Company’s Preferred Stock B, 1,000 shares were converted into 206,559
shares of the Company’s common stock.
 
 On
December 31, 2006, the Company issued 35,236,188 shares of Preferred Stock A in
the Mobilestream Transaction (see Note 1). Preferred Stock A had voting rights
to elect a majority of the Board of Directors as long as the Preferred Stock A
remained outstanding.  In the event of the liquidation, dissolution,
or winding-up of the Company, the holders of the Preferred Stock A were entitled
to receive a preferred distribution of $.001 per share, before any distribution
to holders of any junior series of preferred stock or the common
stock.   In June 2008, Pringle converted 1,791,064 shares of
Preferred Stock A into 895,532 shares of common stock.  Preferred
Stock A had rights to convert one share of preferred stock into one-half of one
share of the Company’s common stock.  In August 2008, Pringle
converted an additional 33,440,124 shares of Preferred Stock A into 16,720,062
shares of common stock.  The remaining 5,000 shares of Preferred Stock
A, held by a person related to Pringle, was converted to common stock on January
6, 2009.
 
 Treasury
Stock
 
 On May
17, 2007, the Company authorized the purchase of shares of the Company’s common
stock from Lois Pringle, spouse of Pringle.  The Company purchased
94,961 shares for $66,473 in cash.   On August 13, 2008, the
Company purchased 6,600,000 shares of the Company’s common stock from Pringle
for $1,650,000 in cash (see Note 10).
 
 Subscription
Receivable
 
 In 2006,
the Company contracted to sell some of its common stock on an installment basis.
As of December 31, 2007, the unpaid balance related to the contract was
$185,693.  In 2008, the Company determined that it was not going to
receive $130,518 of this amount, and it was written-off to additional paid-in
capital on the consolidated statement of stockholders’ equity in the fourth
quarter of 2008.
 
 Warrants
 
 During
the period from July 19, 2002 (inception) to December 31, 2009, the Company
granted two types of warrants: (a) Purchase warrants – sold in conjunction with
the sale of common stock and (b) Compensation warrants – grants to non-employee
consultants for services provided or to be provided.  Warrants issued
in association with the sale of common stock have no related expense, and
accordingly no effect on the Company’s results of operations. Fair value for
each warrant is calculated using the Black-Scholes option-pricing model and a
debit and credit is recorded to additional paid-in capital.
  F-35
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 For
Compensation warrants, the Company records the expense of options granted to
non-employee consultants for services based on the estimated fair value of the
warrants using the Black-Scholes option-pricing model on the grant
date.  The Company believes that the estimated fair value of the
warrants is more readily measurable than the fair value of services
rendered.
 
 The fair
value of the warrants was determined using the Black-Scholes option-pricing
model with the following assumptions:
 
 2009
              
              2008
              
              July 19, 2002
                (inception) to
                December 31, 2009Dividend
      yield
              
              0%
              
              0%
              
              0%Expected
      volatility
              
              115%-168%
              
              117%-159%
              
              100%
      - 240%Risk-free
      interest rate
              
              0.78%-2.89%
              
              1.61%-2.93%
              
              0.78%
      - 4.97%Expected
      life
              
              2-7
      years
              
              .5-5
      years
              
              .5
      - 7 yearExpected
      forfeiture rate
              
              0%
              
              0%
              
              0%
 F-36
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 A summary
of the status of the Company’s stock warrants from July 19, 2002 (inception) to
December 31, 2009 is as follows:
 
 Warrants
              
              
              Range of Exercise
                Price
              
              
              Weighted
                Average
                Exercise
                PriceGranted
              
              
              42,600
              
              
              $
              9.00
              
              
              $
              9.00Balance
      at December 31, 2002
              
              
              42,600
              
              
              $
              9.00
              
              
              $
              9.00Granted
              
              
              519,800
              
              
              $
              9.00
              
              
              $
              9.00Balance
      at December 31, 2003
              
              
              562,400
              
              
              $
              9.00
              
              
              $
              9.00Granted
              
              
              917,645
              
              
              $
              2.75 - $9.00
              
              
              $
              5.01Balance
      at December 31, 2004
              
              
              1,480,045
              
              
              $
              2.75
      - $9.00
              
              
              $
              6.52Granted
              
              
              2,082,042
              
              
              $
              2.75
      - $4.00
              
              
              $
              2.86Cancelled
              
              
              (893,920
              )
              
              $
              9.00
              
              
              $
              9.00Balance
      at December 31, 2005
              
              
              2,668,167
              
              
              $
              2.75
      - $9.00
              
              
              $
              2.84Granted
              
              
              33,909,407
              
              
              $
              2.75
      - $4.75
              
              
              $
              4.27Cancelled
              
              
              (2,668,167
              )
              
              $
              2.75 - $4.75
              
              
              $
              3.01Balance
      at December 31, 2006
              
              
              33,909,407
              
              
              $
              2.75
      - $4.75
              
              
              $
              4.41Granted
              
              
              2,069,606
              
              
              $
              .80
      - $4.00
              
              
              $
              1.78Cancelled
              
              
              (23,500,000
              )
              
              $
              4.75
              
              
              $
              4.75Exercised
              
              
              (150,000
              )
              
              $
              1.65 - $2.00
              
              
              $
              1.83Balance
      at December 31, 2007
              
              
              12,329,013
              
              
              $
              .80
      - $4.75
              
              
              $
              3.34Granted
              
              
              10,974,282
              
              
              $
              1.35
      - $4.00
              
              
              $
              1.96Cancelled
              
              
              (1,002,500
              )
              
              $
              1.50
      - $2.50
              
              
              $
              1.50Exercised
              
              
              (875,000
              )
              
              $
              1.65 - $2.00
              
              
              $
              1.60Balance
      at December 31, 2008
              
              
              21,425,795
              
              
              $
              .80
      - $4.75
              
              
              $
              2.79Granted
              
              
              1,075,041
              
              
              $
              .40 - $2.50
              
              
              $
              1.11Balance
      at December 31, 2009
              
              
              22,500,836
              
              
              $
              .40 - $4.75
              
              
              $
              2.71Exercisable
      at December 31, 2008
              
              
              10,716,388
              
              
              
              
              
              
              $
              2.00Exercisable
      at December 31, 2009
              
              
              11,266,429
              
              
              
              
              
              
              $
              1.97  F-37
 Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Warrants Outstanding
              
              
              Warrants ExercisableExercise
                Price
              
              Number
                Outstandingat
                12/31/09
              
              
              Weighted
                Average
                Remaining
                Contractual
                Life
              
              
              Weighted
                Average Exercise
                Price
              
              
              Number
                Exercisable
                12/31/09
              
              
              Weighted
                Average
                Exercise
                Price$
              0.40
              
              
              200,000
              
              
              
              3.33
              
              
              $
              0.40
              
              
              
              -
              
              
              $
              0.40$
              0.80
              
              
              400,000
              
              
              
              0.25
              
              
              $
              0.80
              
              
              
              400,000
              
              
              $
              0.80$
              0.85
              
              
              200,000
              
              
              
              1.91
              
              
              $
              0.85
              
              
              
              200,000
              
              
              $
              0.85$
              1.02
              
              
              60,000
              
              
              
              4.17
              
              
              $
              1.02
              
              
              
              60,000
              
              
              $
              1.02$
              1.04
              
              
              30,000
              
              
              
              4.24
              
              
              $
              1.04
              
              
              
              30,000
              
              
              $
              1.04$
              1.10
              
              
              225,000
              
              
              
              1.31
              
              
              $
              1.10
              
              
              
              25,000
              
              
              $
              1.10$
              1.35
              
              
              20,000
              
              
              
              3.87
              
              
              $
              1.35
              
              
              
              20,000
              
              
              $
              1.35$
              1.50
              
              
              300,000
              
              
              
              1.16
              
              
              $
              1.50
              
              
              
              75,000
              
              
              $
              1.50$
              2.00
              
              
              9,837,782
              
              
              
              0.10
              
              
              $
              2.00
              
              
              
              9,637,782
              
              
              $
              2.00$
              2.25
              
              
              25,000
              
              
              
              3.73
              
              
              $
              2.25
              
              
              
              25,000
              
              
              $
              2.25$
              2.50
              
              
              350,041
              
              
              
              0.29
              
              
              $
              2.50
              
              
              
              350,041
              
              
              $
              2.50$
              2.63
              
              
              6,000
              
              
              
              3.11
              
              
              $
              2.63
              
              
              
              6,000
              
              
              $
              2.63$
              2.75
              
              
              5,734,546
              
              
              
              1.00
              
              
              $
              2.75
              
              
              
              428,606
              
              
              $
              2.75$
              2.83
              
              
              9,000
              
              
              
              3.39
              
              
              $
              2.83
              
              
              
              9,000
              
              
              $
              2.83$
              4.00
              
              
              1,397,600
              
              
              
              1.00
              
              
              $
              4.00
              
              
              
              -
              
              
              $
              4.00$
              4.75
              
              
              3,705,867
              
              
              
              1.00
              
              
              $
              4.75
              
              
              
              -
              
              
              $
              4.7522,500,836
              
              
              
              
              
              
              $
              2.71
              
              
              
              11,266,429
              
              
              $
              1.97
 Purchased
warrants
 
 During
the year ended December 31, 2009, no purchase warrants were issued in
conjunction with the sale of common stock.
 
 During
the year ended December 31, 2008, in conjunction with the sale of common stock
primarily through two private placements offerings, the Company issued 9,537,782
common stock warrants, with an exercise price of $2.00 and an expiration date of
18 months from date of issuance of the common stock.  The warrants
were valued using the Black-Scholes options pricing model and recorded as a
debit and credit to additional paid-in capital.
 
 During
the year ended December 31, 2007, in conjunction with the sale of common stock
under the terms of a common stock purchase agreement with POOF, the Company
issued 625,000 common stock warrants, with an exercise price of $1.50 and an
expiration date of December 20, 2012.  The warrants were valued using
the Black-Scholes option pricing model and recorded as a debit and credit to
additional paid-in capital.
  F-38
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 On July
3, 2008, the 625,000 warrants issued to POOF were exercised in a cashless
transaction resulting in the issuance of 325,957 shares of common
stock.
 
 CRC and Mobilestream
Warrants (Derivative Liabilities)
 
 In
conjunction with the CRC Acquisition Agreement and the Mobilestream Acquisition
Agreement (together, “the 2006 Acquisition Agreements”) (see Note 1 – Nature of
Business and Basis of Presentation), the Company issued common stock purchase
warrants (“Acquisition Warrants”).   The Acquisition Warrants
consisted of 3,908,340 Carbon Recovery Class B Acquisition Warrants (“Class B
Warrants”), 1,397,600 Carbon Recovery Class D Acquisition Warrants (“Class D
Warrants”), 1,397,800 Carbon Recovery Class E Acquisition Warrants (“Class E
Warrants”)  and 27,205,867 Mobilestream Acquisition Warrants, of which
23,500,000 Mobilestream Acquisition Warrants were issued directly to Mr. Frank
Pringle and on October 23, 2007, the Company cancelled the 23,500,000
Mobilestream Acquisition Warrants which were voluntary return to the Company by
Mr. Pringle.  The Class B Warrants and the Class D Warrants each have
an exercise price of $2.75 and had an original expiration date of September 21,
2007.   The Class  E warrants have an exercise price of
$4.00 and had an original expiration date of September 21, 2007.  The
Mobilestream Acquisition Warrants have an exercise price of $4.75 and had an
original expiration date of December 31, 2007.  On September 21, 2007,
the Board of Directors extended the expiration date of all of the Acquisition
Warrants to December 31, 2007 and on December 31, 2007, the expiration date was
further extended until December 31, 2008.  In November 2008, the Board
of Directors amended the expiration date to 120 days subsequent to the effective
date of a successful registration statement filed with the SEC covering the
Acquisition Warrants.   On July 13, 2009, the Board of Directors
extended the expiration date of all of the Acquisition Warrants to March 31,
2010.  As of December 31, 2009 and through the date of this filing,
the Company has not had registration statements with respect to any of the
Acquisition Warrants declared effective by the SEC.  On January 19,
2010 the Board of Directors again extended the expiration date of all the
Acquisition Warrants to December 31, 2010.
 
 Pursuant
to the 2006 Acquisition Agreements, the Acquisition Warrants must be held in
liquidating trusts for the benefit of their beneficiaries indefinitely until
they are registered or an exemption from such registration is
available.  Further, unless the underlying shares have been
registered, the trustees of the liquidating trusts may serve written demand on
the Company that the shares issuable upon exercise of the Acquisition Warrants
held by the trusts be registered.  The 23,500,000 Mobilestream Acquisition
Warrants issued directly to Mr. Pringle were not held in a liquidating trust as
required by the terms of the Mobilestream acquisition
agreement.  Although these warrants were not held in the liquidating
trust, the Company believes that they should still be subject to the terms of
the Mobilestream acquisition documents and, accordingly, were included in the
computation of derivative liabilities as discussed below before they were
cancelled on October 23, 2007.
 
 The
Company analyzed the Acquisition Warrants in conjunction with the 2006
Acquisition Agreements as potential derivative financial instruments. Since the
trustees of the liquidating trusts can serve written demand on the Company that
the shares issuable upon the exercise of the Acquisition Warrants held by the
trusts be registered and the 2006 Acquisition Agreements (i) do not specify any
circumstances under which net-cash settlement would be permitted or required and
(ii) do not specify how the contract would be settled in the event the Company
is unable to deliver registered shares, the Acquisition Warrants do not meet all
of the conditions required for equity classification.  Since the
Acquisition Warrants are required to be registered, the Company is required to
classify them as derivative liabilities at the time of the respective effective
dates of each of the 2006 Acquisition Agreements.
  F-39
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 As
derivative liabilities, the Acquisition Warrants are measured at fair value at
each reporting period (marked to market) with gains and losses being recognized
in earnings.  The Acquisition Warrants continue to be accounted for as
derivative liabilities until a reclassification event such that the warrants are
exercised, cancelled, or expire.  Upon a reclassification event, the
Acquisition Warrants would be reclassified from liability back to equity after a
mark to market adjustment immediately prior to the reclassification
event.  The Company calculates fair value of the Acquisition Warrants
using a Black-Scholes option pricing model (see 2nd table
below for underlying assumptions).
 
 The
impact of the derivative financial instrument treatment of these warrants on the
Company’s financial statements as of December 31, 2006, 2007, 2008 and 2009 for
the years then ended are as follows:
  Date
                  
                  Transactions
                  
                  Derivative
                    liability
      on
                    Consolidated
                    balance
      sheet
                  
                  
                  Additional
      paid
                    in
      capital
                  
                  
                  Consolidated
                    statementof
                    operations2006
      activity9/22/2006
                  
                  Acquisition
      by GRC (Shell) of Carbon Recovery Corporation
                  
                  $
                  1,257,647
                  
                  
                  $
                  ( 1,257,647
                  )12/31/2006
                  
                  Acquisition
      by GRC of Mobilstream Oil, Inc.
                  
                  
                  14,881,881
                  
                  
                  
                  (14,881,881
                  )12/31/2006
                  
                  Total
      year re-valuation of Derivative liability
                  
                  
                  764,483
                  
                  
                  
                  
                  
                  
                  
                  (764,483
                  )Balance
      at December 31, 2006
                  
                  
                  16,904,011
                  
                  
                  
                  (16,139,528
                  )
                  
                  
                  (764,483
                  )2007
      activity10/22/2007
                  
                  Cancelation
      of 23,500,000 warrants, a related party (Pringle)
                  
                  
                  (2,187,850
                  )
                  
                  
                  2,187,85012/31/2007
                  
                  Total
      year re-valuation of Derivative liability
                  
                  
                  (3,765,492
                  )
                  
                  
                  
                  
                  
                  
                  3,765,492Balance
      at December 31, 2007
                  
                  
                  10,950,669
                  
                  
                  
                  (13,951,678
                  )
                  
                  
                  3,765,4922008
      activity12/31/2008
                  
                  Total
      year re-valuation of Derivative liability
                  
                  
                  (9,358,835
                  )
                  
                  
                  
                  
                  
                  
                  9,358,835Balance
      at December 31, 2008
                  
                  
                  1,591,834
                  
                  
                  
                  (13,951,678
                  )
                  
                  
                  9,358,8352009
      activity12/31/2009
                  
                  Total
      year re-valuation of Derivative liability
                  
                  
                  (1,591,834
                  )
                  
                  
                  
                  
                  
                  
                  1,591,834Balance
      at December 31, 2009
                  
                  $
                  — 0 —
                  
                  
                  
                  (13,951,678
                  )
                  
                  
                  1,591,834
  F-40
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 The
following table shows the variables used in the Black-Scholes option pricing
model calculation use to determine the fair values for the derivative liability
above:
 
 Warrants
                                                              
                                                              Date
                                                              
                                                              Exercise
                                                                Price
                                                              
                                                              
                                                              Market
                                                                Price
      of
                                                                Underlying
                                                                Common
                                                                Stock
                                                              
                                                              
                                                              Expected
                                                                Volatility
                                                                Rate
                                                              
                                                              
                                                              Risk
                                                                Free
                                                                Interest
                                                                Rate
                                                              
                                                              Expected
                                                                Remaining
                                                                LifeCRC    B
      & D
                                                              
                                                              Issuance
      date
                                                              
                                                              $
                                                              2.75
                                                              
                                                              
                                                              $
                                                              1.20
                                                              
                                                              
                                                              
                                                              100
                                                              %
                                                              
                                                              
                                                              4.97
                                                              %
                                                              1
      yearCRC    E
                                                              
                                                              
                                                              
                                                              $
                                                              4.00
                                                              
                                                              
                                                              $
                                                              1.20
                                                              
                                                              
                                                              
                                                              100
                                                              %
                                                              
                                                              
                                                              4.97
                                                              %
                                                              1
      yearMobilestream
                                                              
                                                              
                                                              
                                                              $
                                                              4.75
                                                              
                                                              
                                                              $
                                                              1.69
                                                              
                                                              
                                                              
                                                              150
                                                              %
                                                              
                                                              
                                                              4.94
                                                              %
                                                              1
      yearCRC    B
      & D
                                                              
                                                              12/31/2006
                                                              
                                                              $
                                                              2.75
                                                              
                                                              
                                                              $
                                                              1.69
                                                              
                                                              
                                                              
                                                              100
                                                              %
                                                              
                                                              
                                                              4.94
                                                              %
                                                              9
      monthsCRC    E
                                                              
                                                              
                                                              
                                                              $
                                                              4.00
                                                              
                                                              
                                                              $
                                                              1.69
                                                              
                                                              
                                                              
                                                              100
                                                              %
                                                              
                                                              
                                                              4.94
                                                              %
                                                              9
      monthsMobilestream
                                                              
                                                              
                                                              
                                                              $
                                                              4.75
                                                              
                                                              
                                                              $
                                                              1.69
                                                              
                                                              
                                                              
                                                              150
                                                              %
                                                              
                                                              
                                                              4.94
                                                              %
                                                              1
      yearCRC    B
      & D
                                                              
                                                              12/31/2007
                                                              
                                                              $
                                                              2.75
                                                              
                                                              
                                                              $
                                                              3.30
                                                              
                                                              
                                                              
                                                              134
                                                              %
                                                              
                                                              
                                                              3.26
                                                              %
                                                              1
      yearCRC    E
                                                              
                                                              
                                                              
                                                              $
                                                              4.00
                                                              
                                                              
                                                              $
                                                              3.30
                                                              
                                                              
                                                              
                                                              134
                                                              %
                                                              
                                                              
                                                              3.26
                                                              %
                                                              1
      yearMobilestream
                                                              
                                                              
                                                              
                                                              $
                                                              4.75
                                                              
                                                              
                                                              $
                                                              3.30
                                                              
                                                              
                                                              
                                                              134
                                                              %
                                                              
                                                              
                                                              3.26
                                                              %
                                                              1
      yearCRC    B
      & D
                                                              
                                                              12/31/2008
                                                              
                                                              $
                                                              2.75
                                                              
                                                              
                                                              $
                                                              1.07
                                                              
                                                              
                                                              
                                                              140
                                                              %
                                                              
                                                              
                                                              0.49
                                                              %
                                                              10 monthsCRC    E
                                                              
                                                              
                                                              
                                                              $
                                                              4.00
                                                              
                                                              
                                                              $
                                                              1.07
                                                              
                                                              
                                                              
                                                              140
                                                              %
                                                              
                                                              
                                                              0.49
                                                              %
                                                              10
      monthsMobilestream
                                                              
                                                              
                                                              
                                                              $
                                                              4.75
                                                              
                                                              
                                                              $
                                                              1.07
                                                              
                                                              
                                                              
                                                              140
                                                              %
                                                              
                                                              
                                                              0..49
                                                              %
                                                              10
      monthsCRC    B
      & D
                                                              
                                                              12/31/2009
                                                              
                                                              $
                                                              2.75
                                                              
                                                              
                                                              $
                                                              0.58
                                                              
                                                              
                                                              
                                                              .84
                                                              %
                                                              
                                                              
                                                              0.41
                                                              %
                                                              3
      monthsCRC    E
                                                              
                                                              
                                                              
                                                              $
                                                              4.00
                                                              
                                                              
                                                              $
                                                              0.58
                                                              
                                                              
                                                              
                                                              .84
                                                              %
                                                              
                                                              
                                                              0.41
                                                              %
                                                              3
      monthsMobilestream
                                                              
                                                              
                                                              
                                                              $
                                                              4.75
                                                              
                                                              
                                                              $
                                                              0.58
                                                              
                                                              
                                                              
                                                              .84
                                                              %
                                                              
                                                              
                                                              0.41
                                                              %
                                                              3
      months
 
 In the
calculations above, a 0% dividend yield was used.
 
 Compensation
warrants
 
 On August
5, 2009 the Company issued an aggregate of 25,000 warrants in connection with
the compensation to Board of Directors.  The warrants have exercise
prices of $1.10 and expire on August 5, 2014.  An expense of $24,519
was charged to general and administrative expenses in the accompanying
consolidated statement of operations and comprehensive loss for year ending
December 31, 2009.  The fair value of the warrants was determined
using the Black-Scholes option-pricing model.
 
 On March
27, 2009 the Company issued an aggregate of 30,000 warrants in connection with
the compensation to Board of Directors.  The warrants have exercise
prices of $1.04 and expire on March 27, 2014.  An expense of $27,119
was charged to general and administrative expenses in the accompanying
consolidated statement of operations and comprehensive loss for year ending
December 31, 2009.  The fair value of the warrants was determined
using the Black-Scholes option-pricing model.
  F-41
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 On
September 3, 2008, the Company granted a non-employee 76,500 common stock
warrants for services provided.  These warrants have an exercise price
of $2.75 and are exercisable until December 20, 2012.  An expense of
$78,030 was recorded to general and administrative expenses in the accompanying
consolidated statement of operations and comprehensive loss for the year ended
December 31, 2008.  The fair value of the warrants was determined
using the Black-Scholes option pricing model.
 
 On
October 1, 2008, the Company granted a non-employee 300,000 common stock
warrants as a portion of the payment for services to be
performed.  These warrants have an exercise price of $2.00, and
100,000 warrants vest on each of the following dates: June 10, 2009, January 10,
2010 and June 10, 2010. An expense of $102,285 was recorded to general and
administrative expenses in the accompanying consolidated statement of operations
and comprehensive loss for the year ended December 31, 2008.  The
unrecognized portion of the charge of $306,855 will be amortized over the
remaining vesting period.  The fair value of the warrants was
determined using the Black-Scholes option pricing model.
 
 Beginning
in 2008, the Board of Directors approved a compensation plan that granted each
director 3,000 warrants for each Board of Directors meeting attended. In the
third quarter of 2008, per board resolution, the compensation was increased to
5,000 warrants per meeting.  The exercise price of the warrants are
set at the closing price of the Company’s common stock on the day of the
meeting, and each warrant expires five years from the date of its issuance. The
Company has issued an aggregate of 40,000 warrants in connection with the
compensation plan during the year ended December 31, 2008.  The
warrants have exercise prices of $2.63, $2.83 and $2.25 for warrants issued
during the first, second and third quarters of 2008, respectively.  An
expense of $86,745 was charged to general and administrative expenses in the
accompanying consolidated statement of operations and comprehensive loss for
year ending December 31, 2008.  The fair value of the warrants was
determined using the Black-Scholes option-pricing model.
 
 On
November 13, 2008, the Company issued a total of 20,000 warrants; 10,000 each,
to two members of the Board of Directors as compensation for serving on the
Company’s audit committee.  The warrants have an excise price of $1.35
and expire on November 13, 2013.  An expense of $24,520 was charged to
general and administrative expenses in the accompanying consolidated statement
of operations and comprehensive loss for year ending December 31, 2008. The fair
value of the warrants was determined using the Black-Scholes option-pricing
model.
 
 In April
and May of 2008, 250,000 warrants were exercised in a cashless transaction,
resulting in the issuance of 124,489 shares of the Company’s common
stock.
 
 On
October 10, 2007, 150,000 warrants were exercised in a cashless transaction,
resulting in the issuance of 47,579 shares of the Company’s common
stock.
 
 Prior to
the year ended December 31, 2007, there were no warrants for services
issued.
  F-42
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 Employee
Options
 
 On
December 15, 2009  the Company authorized 3,000,000 common stock
options to the new Chief Executive Officer of the Company.  The 3
million common stock option award has a performance condition that the Company
raise $2 million dollars of capital infusion and enter into a business
relationship to sell a one unit of the Company’s 1 ton machine.  The
Company concluded that it is probable that it will achieve this milestone of
raising $2 million dollars and selling a one 1 ton machine within the next
twelve months.  The Company has determined that a requisite service
period to achieve the performance condition is twelve months and accordingly
will amortize the fair value of the 3 million options over this service period,
beginning December 15, 2009 and ending December 15, 2010.  Per FASB
ASC 718 stock-based compensation, since the Company has concluded that it is
probable that the performance condition will be achieved the Company will
recognize a compensation cost for award during the service period.  A
fair value of approximately $1,718,773 was calculated using the Black-scholes
valuation method,  the excise price use was $0.58 per share the close
price of the Company’s common stock on December 15, 2009, the expected life of
the options three years, volatility was 288.5%, risk free rate
1.38%.  For the year ended December 31, 2009, a half of months expense
in the amount of $71,600 was record to the consolidated statement of operations
and comprehensive loss and to the consolidated equity statement to additional
paid in capital account.
 
 On
February 19, 2009, the Company granted 75,000 common stock options to an
employee.  These options have an exercise price of $1.27, and expire
on February 19, 2019.  The options vest one-third on the one year
anniversary of the grant date, one-third on the two year anniversary of the
grant date one-third on the three year anniversary of the grant
date.  These options were granted under the Company’s 2008 Incentive
Stock Option Plan, as amended, and are subject to stockholders’ approval of an
Amendment to the Plan, increasing the number of shares available for issuance.
No expense has yet to be recorded for the unapproved options.
 
 On
January 29, 2009, the Company granted 35,000 common stock options to staff
employees.  These options have an exercise price of $1.02, an
expiration date of ten years from grant date and become fully vested on July 1,
2009.  These options were granted under the Company’s 2008 Incentive
Stock Option Plan, as amended and are subject to stockholders’ approval of an
Amendment to the Plan, increasing the number of shares available for issuance.
No expense has yet to be recorded for the unapproved options.
 
 On
September 23, 2008, as part of a series of employment term sheets, the
Company authorized the grant of a total of 8,500,000 stock options to four key
executives. 5,000,000 of those stock options were granted to Eric
Swain, the Company's Chief Executive officer.  The other 3,500,000
stock options were granted to three other officers of the Company and remain
subject to stockholders’ approval of an amendment to the Company's stock option
plan increasing the number of authorized shares available for issuance under the
plan.  All of these options have an exercise price of $1.18 per share
and expire ten years after the vesting date.  1,000,000 of Mr. Swain’s
options vested immediately and the balances were scheduled to vest in
equal annual installments of 1,000,000 options on September 23, 2009 and on each
anniversary thereafter for the three years thereafter.   On July 6,
2009, Mr. Swain’s employment with the Company was terminated and a subsequent
severance agreement was entered into between the Company and Mr. Swain on
October 2, 2009.   As part of the severance agreement, 2,000,000
of Mr. Swain’s options were cancelled.   (See Note 14 –
Commitments and Contingencies – Severance Agreements).   The
assumptions used in the Black-Scholes option-pricing model used to determine the
fair value of the options are: a dividend yield of 0%; an expected volatility
rate of 123.5%; a risk-free interest rate of 2.93%; and an expected life of
approximately six years. Expected forfeitures were estimated to be
0%.
  F-43
 
 Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 
 On
February 9, 2010 the Company entered into an agreement with Mr. Jeffrey Andrews
to exchange the 1,000,000 previously granted employee stock option which were
subject to shareholders approval for Company warrants.  Mr. Andrews
was issued 1,000,000 warrants with an exercise price of $1.18 per share, of
these warrants 400,000 are exercisable immediately and the 600,000 remaining
become excerisable on January 31, 2011, except that the remaining warrants will
become immediately exercisable in full in the event that the Company terminates
the consulting services of Mr. Andrews at any time after six
months.   The warrants have an expiration date of January 31,
2013.
 
 On April
27, 2009, with the retirement of Mr. Wayne Koehl, 600,000 of his options still
waiting stockholders’ approval were cancelled (see Note 14 for details). Of the
combined 2,900,000 options granted to Mr. Koehl and the two other executives,
one-fifth of these options will vest immediately upon approval of the amendment
of the Company’s stock option plan, and the remainder are scheduled to vest
one-fifth on September 23, 2009, and an additional one-fifth on each anniversary
thereafter, for the next three years, provided that the executives are employed
by the Company at each vesting date, or the options are subject to the terms of
a retirement or severance agreement.  On February 4, 2010 the Company
entered into an agreement to exchange previously granted  employee
stock options which were subject to shareholders approval
for  Company  warrants.  Mr. Koehl was issued
400,000 warrants with an exercise price of $1.18 per share in exchange for the
400,000 options, these warrants are exercisable immediately and have an
expiration date of December 31, 2018.
 
 In
November 2008, the Company authorized 450,000 stock options to three employees
which are also subject to stockholder approval.  These options have an
exercise price of $1.24 per share and expire on November 21,
2018.  150,000 options vest immediately (after stockholder approval),
150,000 vest on January 1, 2010, and the remainder are fully vested on January
1, 2011.  The assumptions used in the Black-Scholes option-pricing
model used to determine the fair value of the options are: a dividend yield of
0%; an expected volatility rate of 159.5%; a risk-free interest rate of 2.12%;
and an expected life of approximately six years. Expected forfeitures were
estimated to be 0%.  No expense was recorded for the unapproved
options during the year ended December 31, 2008.
 
 In March
2005, CRC issued 200,000 stock options to the CFO.  The options have
an exercise price of $1.00 per share and expire on December 31,
2014.  The options are fully vested as of December 31,
2008.  Prior to March 2005, the Company had not issued any employee
common stock purchase options.
  F-44
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
  A summary of the status of the
Company’s outstanding employee stock options as of December 31, 2009 is as
follows:
 
 Number of
                          OptionShares
                        
                        
                        Weighted
                          Average
                          Exerciseprice
                        
                        
                        Number of
                          VestedOption
                          sharesOptions
      from July 19, 2002 (inception) toDecember
      31, 2004
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        -Granted
                        
                        
                        200,000
                        
                        
                        $
                        1.00
                        
                        
                        
                        50,000Options
      as of December 31, 2005
                        
                        
                        200,000
                        
                        
                        $
                        1.00
                        
                        
                        
                        50,000Options
      as of December 31, 2006
                        
                        
                        200,000
                        
                        
                        $
                        1.00
                        
                        
                        
                        100,000Options
      as of December 31, 2007
                        
                        
                        200,000
                        
                        
                        $
                        1.00
                        
                        
                        
                        150,000Granted
                        
                        
                        5,000,000
                        
                        
                        $
                        1.18
                        
                        
                        
                        1,000,000Exercised
                        
                        
                        
                        
                        
                        $
                        -
                        
                        
                        
                        -Forfeited/expired
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        -Outstanding
      at December 31, 2008
                        
                        
                        5,200,000
                        
                        
                        $
                        1.18
                        
                        
                        
                        1,200,000Granted
                        
                        
                        3,000,000
                        
                        
                        $
                        0.58
                        
                        
                        
                        -Exercised
                        
                        
                        -
                        
                        
                        $
                        -
                        
                        
                        
                        -Forfeited/expired
                        
                        
                        (2,000,000
                        )
                        
                        $
                        -
                        
                        
                        
                        -Outstanding
      at December 31, 2009
                        
                        
                        6,200,000
                        
                        
                        $
                        0.88
                        
                        
                        
                        3,200,000
 
 The
3,460,000 options (for eight employees and one former employee) awaiting
stockholder approval are not included in summary table above because options
under an arrangement that is subject to shareholder approval are not deemed to
be granted until that approval is obtained, unless approval is essentially a
formality, which the Company has deemed not to be the case. Also see Note No. 22
subsequent events for new agreements on options awaiting stockholders’
approval
 
 As of
December 31, 2009, 3,200,000 options are vested and no options have been
exercised. The weighted average exercise price is $0.88.
 
 NOTE
12 -   DEPOSITS AND OTHER
ASSETS
 
 As of
December 31, 2009 and 2008, the balance of deposits and other assets was
$124,330 and $123,726, respectively.  At December 31, 2009, the
deposits consist of a $45,000 investment in land acquired through the issuance
of common stock in 2006, a $29,860 deposit made in August 2007 on a future lease
for additional equipment, a $1,366 lease deposit for offices in Rockford,
Illinois in April 2008, and a $47,500 deposit for newly leased offices in New
Jersey in November 2008.
 
 NOTE
13-    PREPAID
SERVICES
  During
the year ended December 31, 2009, the Company issued an aggregate 2,699,000
shares of common stock to non-employees for services to be performed under
various agreements. The transactions were valued at the fair value of the common
stock at the commitment date in the amount of $2,431,050, as that was deemed to
be the more readily determinable value.  In the accompanying
consolidated statement of operations and comprehensive loss for the year ended
December 31, 2009, a charge to general and administrative expenses related to
these agreements was made in the amount of $1,853,800.  The
unamortized amount as of December 31, 2009 is $577,250.
  During
the year ended December 31, 2008, the Company issued an aggregate 2,050,000
shares of common stock to non-employees for services to be performed under
various agreements. The transactions were valued at the fair value of the common
stock at the commitment date in the amount of $2,232,500, as that was deemed to
be the more readily determinable value.  In the accompanying
consolidated statement of operations and comprehensive loss for the year ended
December 31, 2008, a charge to general and administrative expenses related to
these agreements was made in the amount of $808,625.  The unamortized
amount as of December 31, 2008 is $1,423,875.  Also in October 2008,
the Company
paid two consultants a total of $215,000 in cash for services to be provided
over the next six months. A charge of $130,000 was expensed to general and
administrative expenses in the accompanying consolidated statement of operations
and comprehensive loss for the year ended December 31, 2008, $85,000 is the
unamortized amount associated with these cash transactions. The total
unamortized amount as of December 31, 2008 is $1,508,875.
  F-45
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 During
September and October 2007, the Company issued an aggregate 925,000 shares of
common stock to non-employees for services to be performed. The transactions
were valued at the fair value of the common stock at the commitment date in the
amount of $2,581,500, as that was deemed to be the more readily determinable
value.  Per the agreements, the services were to be provided over a
one-year period.  The fair value of the common stock of $2,581,500 was
amortized over a twelve-month period; the unamortized amount as of December 31,
2007 is $1,808,042.  Included in general and administrative expenses
in the accompanying consolidated statements of operations for the years ended
December 31, 2008 and 2007, is compensation related to these agreements in the
amounts of  $1,808,042 and $773,500, respectively.
  NOTE
14 - COMMITMENTS AND
CONTINGENCIES
 
 Severance
Agreement
 
 On July
6, 2009, the Company terminated the employment of Eric Swain, its Chief
Executive Officer, and removed him from the Company’s Board of
Directors.  On October 2, 2009, the Company finalized a Severance
Agreement with Mr. Swain (the “Swain Severance Agreement”).  The Swain
Severance Agreement replaced the prior terms of employment  that the
Company had with Mr. Swain.  Pursuant to the terms of the Swain
Severance Agreement, among other things, (a) of the options to purchase
5,000,000 shares of the Company’s common stock at an exercise price of $1.18 per
share previously granted to Mr. Swain, Mr. Swain shall retain 1,000,000 that
previously vested, 1,000,000 that will vest on December 1, 2009 and 1,000,000
that will vest on December 1, 2010, the remaining 2,000,000 being cancelled, (b)
the Company has agreed, subject to Mr. Swain’s continued compliance with the
terms of the Swain Settlement Agreement, (i) to pay to Mr. Swain certain
bonuses, if earned, payable to him under the prior terms of his employment
through January 6, 2011, and (ii) to issue to Mr. Swain an aggregate of
2,250,000 shares of its common stock on certain dates starting on October 6,
2009 and ending on October 6, 2011, of which 1,800,000 shares are to registered
under the Securities Act of 1933 pursuant to an effective registration statement
on Form S-8 filed on January 29, 2008 (“S-8 Shares”); (c) Mr. Swain has agreed
not to sell more than 35,000 S-8 shares during any calendar week; (d) the
Company will continue to provide full health insurance benefits to Mr. Swain
through July 5, 2010;  and (e) the Company transferred to Mr. Swain
the title of ownership of the Company’s car then in Mr. Swain’s
possession.  In compliance with the terms of the Swain Severance
Agreement, on October 5, 2009, the Company issued to Mr. Swain 450,000
restricted shares of its common stock .  In September of 2009, the
Company recorded a severance expense of $3,654,714 for the payments to be paid
by the Company to Mr. Swain pursuant to the Swain Settlement Agreement. For the
options still to be delivered, the liability was revalued to its fair value at
December 31, 2009 and the compensation expense was reduced by $568,000 in the
financial statements. The expenses recorded were valued using the present value
of expected future outflows. Subsequent to year end December 31, 2009 the Swain
Severance Agreement was amended on January 26, 2010, the remaining 1.2 million
shares of its registered common stock to be issued on future dates in 2010 and
2011 was replaced by issuing Mr. Swain 1.4 million shares of its restricted
common stock subject to SEC rule 144 on January 27, 2010, (see Note 22
subsequent events).
  F-46
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 On
November 12, 2008, the Company entered into a severance agreement with Pringle,
and 888 Corporation, a New Jersey corporation owned directly or indirectly by
Pringle (the "Severance Agreement").  The Severance Agreement replaces
a prior consulting agreement with 888 Corporation, which was approved by the
Board of Directors on May 21, 2008.  Pursuant to the Severance
Agreement, the Company has agreed to pay Pringle $200,000 per year for the
six-year period commencing on January 1, 2009 subject to Pringle and 888
Corporation’s continued compliance with the terms of the Severance Agreement.
Pursuant to the Severance Agreement, Pringle has returned 225,000 shares of the
Company’s common stock previously issued to him, and he resigned as a member of
the Company's Board of Directors and in all other capacities. Pringle also
agreed to restrict the amount of shares of the Company’s common stock that he or
his affiliates may sell to the following amounts: an aggregate of 400,000 shares
of the Company’s common stock in the three month period beginning February 1,
2009, an aggregate of 300,000 shares of the Company’s common stock in the
three-month period beginning May 1, 2009 and an aggregate of 250,000 shares of
Company’s common stock in any three-month period thereafter beginning with the
three-month period beginning August 1, 2009. The foregoing restrictions remain
in place until Pringle has less than 5,000,000 shares of Company’s common stock.
Any transfers by Pringle in accordance with the foregoing restrictions remain
subject to the Company's right of first refusal to purchase the stock. The
Severance Agreement also provides for: (i) the immediate termination of the
consulting agreement between the Company and 888 Corporation dated as of January
1, 2008 (though the Company has agreed to pay 888 Corporation the remainder of
any payments otherwise due them through December 31, 2008); (ii) a nine year
non-compete and non-solicitation agreement from Mr. Pringle; (iii) certain
representations, warranties and covenants from Pringle and associated
indemnification obligations; and (iv) mutual general releases and
non-disparagement provisions.  The Company has recorded a charge in
the amount of $1,200,000 charge to expense in the accompanying consolidated
statement of operations and comprehensive loss for the year ended December 31,
2008 related to the Severance Agreement.  The Company’s pledge of its
pending patents as collateral for the payments to Pringle was
eliminated.   On September 29, 2009, (i) the Company declined to
exercise its right of first refusal to purchase a total of 950,000 shares from
Mr. Pringle and (ii) the Company and Pringle agreed to amend the Severance
Agreement with respect to the selling restrictions (the
“Amendment”).  Pursuant to the Amendment, (i) Mr. Pringle agreed not
to sell, assign, transfer, pledge or encumber more than 20,000 shares of the
Company’s common stock per week commencing on September 28, 2009 and continuing
for the following 78 weeks thereafter, (ii) any transfers of shares that Mr.
Pringle agreed to make prior to September 28, 2009 would be made from the
950,000 shares that were permitted to be sold pursuant to the Severance
Agreement prior to November 1, 2009 and (iii) in all other respects, the terms
of the original Severance Agreement remain unchanged.   On
January 7, 2010, subsequent to the year ending December 31, 2009, the Company
entered into an addendum to severance agreement, the severance agreement was
amended as follows:  (i) reduce the current monthly cash payments to
$10,000 per month retroactively to December 2009, (ii) accruing the difference
of $6,667 per month as a liability, (iii) in consideration for this forbearance
the Company shall issue to Mr. Pringle on or before January 8, 2010, 100,000
shares of the Company’s common stock, (iii) pay a 100% of Mr. Pringle’s health
insurance coverage for the 12 month period covering 2010; (iv) Once the Company
has raised a total of $1.0 million dollars in new equity investments, the full
payments to Mr. Pringle shall recommence as of the first month of the succeeding
month and accrued liability shall be paid in six equal installments also
beginning as of the first month of the succeeding month; (v) all restrictions of
when Mr. Pringle can sell his stock are rescinded; (vi) the Company has had
ample opportunity to investigate any claims of Mr. Pringle or a Pringle related
party for which an offset would be made.  In May 2010 the Company has
raised a total of $1.0 million dollars in new equity investments, consequently
the full payments to Mr. Pringle shall recommence at $16,666 per month and the
accrued liability will begin to be paid in six equal installments.
  F-47
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 In 2005,
the Company granted Pringle 545,000 shares of its common stock as deferred
compensation.  The fair value of the common stock on the date of the
grant was $1 per share. The common stock was to vest over a five-year period
commencing January 1, 2005, with 27,250 shares vesting quarterly, or 109,000 per
year, and was expensed in the consolidated financial statements at a rate of
$27,250 per quarter, or $109,000 per year, until December 31,
2009.  As of December 31, 2007, there was $218,000 of unrecognized
compensation costs related to non-vested shares.  As a result of the
severance agreement with Pringle, this remaining balance of unrecognized
compensation costs was expensed to general and administrative expenses in
December 2008.
 
 Employment / Compensation
Agreements
 
 On
December 15, 2009 the Board of Directors approved the compensation packages for
the Chairman of the Board, the Chief Executive Officer and members of the Board
of directors.  The compensation packages are contingent upon the
Company achieving certain financial and operation milestones and are not
effective until the Company reaches predetermined
Milestones.   As of December 31, 2009 the company had not
achieved any of the milestone levels. Definition of Milestone: Milestone 1 is
defined as having the Company raising $2.0 million dollars of capital infusion
and entering into a business agreement for the sale of a 1 ton production
microwave unit machine.  Milestone 2 is defined as having the Company
raising $5.0 million dollars of capital infusion (the $5.0 million dollars
include the $2.0 million from milestone 1) and the enters into a business
agreement for the sale of three 1 ton production microwave unit machines or one
3 ton production microwave unit machine.
 
 Contingently
approved compensation for the Chairman of the Board: When milestone 2 objective
is achieved Mr. Brian Ettinger will receive (i) 100,000 shares of its
unregistered (rule 144 shares) common stock shares each quarter.  If
the average stock price remains above a $1.50 per share for three consecutive
months, the 100,000 shares of common stock issued per quarter will increase to
200,000 shares of its common stock. (ii) 100,000 stock option shares each
quarter.  If the average stock price remains above a $1.50 per share
for three consecutive months, the 100,000 stock options shares issued per
quarter will increase to 200,000 stock options. (iii) Mr. Ettinger is entitled
to receive a bonus of 1.5% of the profit before taxes for any joint ventures
and/or strategic alliances the Company enters into when the venture becomes
operational.  (iv)  If the Company is sold for over
$100,000,000 (not including a hostile takeover) during Mr. Ettinger’s tenure as
Chairman of the Board, he is entitled to receive a 1.5% bonus of the net
proceeds from the sale of the Company.  If Mr. Ettinger is terminated
as Chairman of the Board of Directors without cause, Mr. Ettinger is entitled to
500,000 shares of its common stock and 1.0 million stock option shares valued at
the stock price on the termination date.
  F-48
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 Contingently
approved compensation for the Chief Executive Officer: When milestone 1
objective is achieved Mr. Ken Kinsella will receive (i) a compensation package
of $300,000 a year, this compensation includes a salary of $277,200 per year,
car allowance of  $900 per month and a living allowance of $1,000 per
month, (ii) 3,000,000 stock options will be granted at the closing share price
on the date that the milestone 1 is achieved and these stock options are 100%
vested on the grant date and have a three year expiration date, an expense of
$71,616 was recorded to the consolidated statement of operations and
comprehensive loss (see note No. 11 above for detail under Employee options)
(iv) Mr. Kinsella is eligible to receive health insurance coverage provided by
the company.  (v) If Mr. Kinsella is terminated as CEO without cause,
he will be entitled to an additional 2.0 million common stock options valued at
the stock price on the termination date.  If the Company reaches a
milestone 2 objective the Board of Directors may award Mr. Kinsella additional
compensation at the discretion of the Board.
 
 Contingently
approved compensation for a member of the Board: When milestone 2 objective is
achieved Mr. Paul Sweeney will receive (i) $25,000 per quarter for services he
is currently providing as a consultant, (ii) a grant of 50,000 common stock
shares (unregister-Rule 144 shares) each quarter and if the average stock price
remains above a $1.50 per share for three consecutive months, the 100,000 shares
of common stock issued per quarter will increase to 200,000 shares of its common
stock,(ii) 100,000 stock option shares each quarter and if the average stock
price remains above a $1.50 per share for three consecutive months, the 100,000
stock options shares issued per quarter will increase to 200,000 stock
options:
 
 Contingently
approved compensation for a member of the Board: When milestone 2 objective is
achieved Mr. Peter Worthington, former CEO  will receive (i) 100,000
of the Company’s common stock options values at closing market price on date
issuance, exercisable up to 36 months from date of issuance, (ii) Mr.
Worthington will receive $45,000 in cash for services render as
CEO.
 
 Contingently
approved compensation based on the Company achieving milestone 2, the current
compensation for Board of Directors of receiving 5,000 stock warrants for
attending a board meeting will change to the following: (i) Chairman will
receive $50,000 in cash based on approximately 20 days full time work per year
comprising Board and shareholders meetings and general interaction with CEO,
executive team, other directors and Company shareholders; (ii) Board members
will receive $25,000 in cash based on approximately 10 days full time work per
year comprising Board and shareholders meetings and general interaction with
CEO, executive team, other directors and Company shareholders; (iii) if a Board
member is a committee chairman will receive $3,000 per meeting held as per
charter and if a Board member is a member of a committee will receive $2,500 per
meeting as per charter;  (iv) for all Board members reasonable
expenses will be reimbursed as approved by nominations and compensation
committee.  (v) Board member will be entitled to receive a bonus of
1.5% of the profit before taxes for any joint ventures and/or strategic
alliances the Company enters into when the venture becomes operational for five
years;  (vi)  If the Company is sold for over $100,000,000
(not including a hostile takeover) during the Board members tenure, the
member  is entitled to receive a 1.5% bonus of the net proceeds from
the sale of the Company.
  F-49
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 On
November 11, 2009, the Board of Directors approved the appointment of Mr. Ken
Kinsella to the position of Chief Executive Officer (“CEO”) of the
Company.  Mr. Kinsella is currently receiving the following
compensation: A salary of $12,000 per month, a car allowance of approximately
$900 per month, and a living allowance of approximately $1,000 per month for a
total compensation of   approximately $167,000, per year. He is
eligible to receive health insurance coverage provided by the
company.
 
 On
November 11, 2009, the Board of Directors elected Mr. Brian Ettinger to the
Board of Directors of the Company and appointed him as the Chairman of the Board
of Directors for a one year term.  On December 15, 2009, the Company
issued 150,000 shares of its common stock to Mr. Ettinger, (ii) the Company
renewed a consulting agreement with Mr. Ettinger, pursuant to the consulting
agreement Mr. Ettinger agreed to provide the Company with certain consulting
services outside his duties as Chairman of the Board of Directors of the Company
(see related party footnote No. 10 above for details of consulting
agreement).
 
 On July
6, 2009, the Board of Directors approved the appointment of Mr. Peter A.
Worthington as its Interim Chairman of the Board and to the position of Chief
Executive officer of the Company.  Mr. Worthington has been a member
of the Board of Directors since August 13, 2008.  Mr. Worthington
received no compensation for being interim chairman of the Board and CEO the
Company other than being reimbursed for living and travel
expenses.  The Company did accrue an expense of $45,000 for potential
compensation to be agreed upon which was recorded the statement of operations as
of December 31, 2009.  On November 11, 2009, Mr. Worthington resigned
from the position of CEO as well as from its Board of Directors, including as
Interim Chairman of the Board.  On December 15, 2009, the Board
approved 200,000 common stock options with an option price of $.40, are vested
immediately and have expire of three years from date of issuance for his efforts
as interim Chairman of the Board  and CEO.  An expense of
$45,000 was recorded to the statement of operation as of December 31,
2009.  The Board also determined that Mr. Worthington was owed $45,000
as salary compensation which can be paid upon the Company reaching a milestone
objective of the Company raising or having available $5.0 million dollars of
capital infusion.
 
 On
September 23, 2008, the Board of Directors approved employment letter agreements
with (i) the president of the Company, Jeffrey Kimberly, (ii) the Chief
Operating Officer (“COO”) of the Company, Wayne Koehl, and (iii) the CFO of the
Company, Jeffrey Andrews. These letter agreements amended and restated the terms
and conditions of employment of each of these executives of the
Company.
 
 Mr.
Kimberly's employment letter provides for an employment term of five years at an
annual salary beginning January 1, 2009 of $300,000, with an increase to
$375,000 if the Company reaches certain sales goals. Any other increase in
annual salary is subject to approval of the CEO of the Company and the Board of
Directors. Subject to approval by the stockholders of the Company, Mr. Kimberly
will be granted an option to purchase 1,500,000 shares of the Company’s common
stock. The exercise price for these options was set at the market closing bid
quotation on September 15, 2008 of $1.18. The options will be exercisable from
and after their respective vesting date, and for a period of ten years
thereafter. Options for 300,000 shares of common stock shall vest immediately on
September 23, 2008, and options for 300,000 additional shares of common stock
shall vest on September 23rd of each successive year between 2010 and 2013
inclusive, provided that Mr. Kimberly is still employed on the relevant vesting
date. These stock options are not deemed to be granted until stockholder
approval is obtained. Mr. Kimberly will be entitled to receive bonuses of
between 0.75% and 1.00% of the Company's gross profits on sales of equipment
after the Company reaches certain sales milestones. The Company shall pay the
monthly loan payments on Mr. Kimberly's car for two years and then pay off all
of the remaining loan balance on this automobile provided he is still employed
by the Company.  On March 25, 2010, the Company terminated Mr.
Kimberly’s contract (see Note 22 subsequent events).
  F-50
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 Mr.
Andrews' employment letter provides for an employment term of five years at an
annual salary for 2008 of $180,000, with an increase to $225,000 if the Company
reaches certain sales goals. Any other increase in annual salary is subject to
the approval of the CEO of the Company and the Board of Directors. Subject to
approval by the stockholders of the Company, Mr. Andrews will be granted an
option to purchase 1,000,000 shares of the Company’s common stock. The exercise
price for these options was set at the market closing bid quotation on September
15, 2008 of $1.18. The options will be exercisable from and after their
respective vesting date, and for a period of ten years thereafter. Options for
200,000 shares of common stock shall vest immediately on September 23, 2008, and
options for 200,000 additional shares of common stock shall vest on September
23rd of each successive year between  2010 and 2013 inclusive,
provided that Mr. Andrews is still employed on the relevant vesting date. These
stock options are not deemed to be granted until stockholder approval is
obtained.  Mr. Andrews will be entitled to receive bonuses of between
0.75% and 1.00% of the Company's gross profits on sales of equipment after the
Company reaches certain sales milestones.  Mr. Andrews shall also
receive a monthly automobile allowance of $500.   On February 9,
2010 the Company entered into a consultant agreement (see Note 22 – Subsequent
events below) with Mr. Andrews, this new consultant agreement replaces the prior
terms of employment that the Company had with Mr. Andrews.
 
 Mr.
Koehl's employment letter provides for an employment term of five years at an
annual salary for 2009 of $225,000, with an increase to $250,000 if the Company
reaches certain sales goals. Any other increase in annual salary is subject to
the approval of the CEO of the Company and the Board of
Directors.  Subject to approval of the stockholders of the Company,
Mr. Koehl will be granted an option to purchase 1,000,000 shares of common stock
of the Company. The exercise price for these options was set at the market
closing bid quotation on September 15, 2008 of $1.18. The options will be
exercisable from and after their respective vesting date, and for a period of
ten years thereafter. Options for 200,000 shares of common stock shall vest
immediately on September 23, 2008, and options for 200,000 additional shares of
common stock shall vest on September 23rd of each successive year between 2010
and 2013 inclusive, provided that Mr. Koehl is still employed on the relevant
vesting date. These stock options are not deemed to be granted until stockholder
approval is obtained. Mr. Koehl will be entitled to receive bonuses of between
0.75% and 1.00% of the Company's gross profits on sales of equipment after the
Company reaches certain sales milestones. Mr. Koehl shall also receive a monthly
automobile allowance of $500. On April 27, 2009, the Company entered into a new
agreement with Mr. Koehl.  This new agreement replaces the prior
employment agreement discussed above.  Pursuant to the new agreement,
Mr. Koehl no longer works for the Company, the Company has agreed to pay Mr.
Koehl his current salary for a period of approximately six months, ending on
October 31, 2009.  The new agreement also provides
that:  (a) Mr Koehl will be entitled to receive a bonus based upon
sales of equipment made by the Company solely to one certain
customer;  (b) Mr. Koehl shall be entitled to retain
the  options to purchase 200,000 shares of the Company’s common
stock  previously granted which are vested but are subject to the
shareholders approval and the options to purchase an additional 200,000 shares
of the Company’s common stock previously granted, also subject to the
shareholders approval, which were to vest on September 23, 2009 but shall now be
immediately vested;  (c)  the Company will continue to
provide medical coverage under the Company’s current health care benefits plan
for period of approximately six months ending on October 31,
2009.  Thereafter Mr. Koehl shall be entitled to elect to continue
such COBRA coverage for the remainder of the COBRA period, at Mr. Koehl’s own
expense.  On February 4, 2010 the Company entered into an second
agreement to exchange previously granted  employee stock option which
were subject to shareholders approval
for  Company  warrants.  Mr. Koehl was issued
400,000 warrants with an exercise price of $1.18 per share, this warrants are
exercise immediately and have an expiration date of December 31, 2018, (see Note
22 subsequent events for details).
  F-51
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 On
September 24, 2008, the Board of Directors of the Company approved the
appointment of Eric Swain as CEO of the Company.  In connection with
the appointment of Mr. Swain, the Board approved a summary of terms of a
proposed employment agreement to be entered into between the Company and Mr.
Swain. Mr. Swain's summary of terms provides for an employment term of five
years at an annual salary of $450,000 from the date of the execution of the
employment agreement through December 31, 2009, with an increase to $525,000 on
January 1, 2010 if the Company reaches at least one sales goal as defined in the
summary of terms. Any other increase in annual salary is to be determined based
on the terms of the employment contract. Mr. Swain shall be entitled to eighteen
months of severance payments equal to his current salary if the Company
terminates his employment without cause or if he terminates his employment with
good reason.  Mr. Swain will be granted an option to purchase
5,000,000 shares of the Company’s common stock. The exercise price for these
options was set at the market closing bid quotation on September 15, 2008 of
$1.18. The options will be exercisable from and after their respective vesting
date, and for a period of fifteen years thereafter. Options for 1,000,000 shares
of common stock shall vest immediately and options for 1,000,000 additional
shares of common stock
shall vest on September 23rd of each successive year between 2010 and 2013
inclusive, provided that Mr. Swain is still employed on the relevant vesting
date.
 
 Mr. Swain
will be entitled to receive bonuses, payable in the form of common stock or
options to purchase common stock equal to 0.75% of the Company's gross profits
on each sale of equipment over $25,000,000. Mr. Swain shall also receive a
monthly automobile allowance of $900. The Company has agreed that, if Mr. Swain
should incur costs (including legal expenses) arising from his previous
employment, the Company would reimburse Mr. Swain for any such
costs.  The Company has recorded a $560,000 charge in the accompanying
2008 consolidated statement of operations and comprehensive loss related to this
possible contingency, which is included in accounts payable and accrued expenses
on the consolidated balance sheet at December 31, 2008.  On October 2,
2009, the Company entered into a Severance Agreement with Mr. Swain (the “Swain
Severance Agreement”, also see amendment to Swain Severance agreement) see above
for details.
 
 Joint Development Agreement
(Schlumberger Agreement)
 
 On April
23, 2009, Global Heavy Oil Corporation, a wholly-owned subsidiary of the Company
(“GHO”), entered into a Joint Development Agreement (the “JDA”) with
Schlumberger Technology Corporation and Schlumberger Holdings Limited
(collectively, “Schlumberger”; together with GHO, the “JDA
Parties”).  Pursuant to the JDA, the JDA Parties agreed to use
reasonable efforts to collaborate in order develop Surface Upgrading products
and services in Heavy Oil oilfield operations (the “Products and
Services”).  Surface Upgrading are processes and technologies using
microwaves to increase the gravity of Heavy Oil above the surface of the
Earth.  Heavy Oil is petroleum with an American Petroleum Institute
gravity of 22.3 degrees or less.
  F-52
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 In
consideration of the time, effort and expense that Schlumberger will expend in
connection with the activities contemplated by the JDA, and in exchange for the
payments to be made by Schlumberger to GHO described in the next paragraph, the
Company agreed not to engage in the research, development, manufacturing,
marketing or exploitation of Products and Services during the term of the JDA
and for two years thereafter, except pursuant to the JDA.
 
 Pursuant
to the JDA, Schlumberger agreed to pay $300,000 to GHO within thirty days of the
execution of the JDA and another $300,000 on the first anniversary of the
JDA.  These moneys are non-refundable.  The first $300,000
was received on May 22, 2009. As of December 31, 2009, the Company recognized
$180,000 of it as revenue, with the remaining $120,000 remaining on the
accompanying  consolidated balance sheet as deferred
revenue.  The Company recognizes revenue in accordance with Securities
and Exchange Commission guidance Staff Accounting Bulletin 104 “Revenue
Recognition in Financial Statements” (SAB 104) guidance on revenue recognition.
Revenue is recognized when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed and collectability
of the resulting receivable is reasonably assured.  Revenue is
recognized as services are rendered in accordance with the terms of the
JDA.  Beginning in July 2009, revenue of $30,000 per month has been
recognized, corresponding to when R& D services began, the initial 300,000
payment is being amortize over a ten month time period,
 
 Pursuant
to the terms of the JDA, each JDA Party granted to the other JDA Party an
exclusive, worldwide, royalty-free license to use such JDA Party’s intellectual
property applicable to Surface Upgrading in Heavy Oil oilfield operations during
the term of the JDA.
 
 Pursuant
to the JDA, the collaboration between the JDA Parties is to be implemented in
three distinct phases as follows:
 
 Phase I - Research and
Development.   During this Phase, the concept of the
Products and Services will be designed and developed, and the efficacy thereof
will be tested.  Phase I continues until the earlier of (i) the date
on which the JDA Parties agree that the Phase I objectives have been satisfied
or (ii) the second anniversary of the JDA, subject to extension at the option of
either JDA Party until the third anniversary of the JDA.  During this
Phase, each JDA Party shall pay its own expenditures incurred pursuant to the
JDA.
 
 Phase II -
Prototype.  During this Phase, the JDA Parties will design and
test a prototype device or system to deliver Products and Services as a prelude
to commercial exploitation of Products and Services.  Phase II
commences immediately upon agreement of the JDA Parties that the Phase I
objectives have been timely satisfied (though Schlumberger has the option to
terminate the JDA
upon completion of Phase I by providing notice to GHO within thirty days of such
completion) and continues until the earlier of (i) the date on which the JDA
Parties agree that the Phase II objectives have been satisfied or (ii) the
second anniversary of the date of commencement of Phase II, subject to extension
at the option of either JDA Party until the third anniversary of commencement of
Phase II.  During this Phase, Schlumberger shall pay for all
qualifying expenditures incurred by the JDA Parties pursuant to the JDA, except
that if this Phase is extended at the option of GHO, during such extension GHO
shall pay all such expenditures.  Within thirty days of the
commencement of Phase II, Schlumberger shall pay to GHO $1,000,000 as a
Non-Recurring Engineering Charge.
  F-53
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 Phase III – Joint
Venture.  During this Phase, the JDA Parties will enter into a
joint venture for the commercial exploitation of Products and Services, which
joint venture shall include provisions set forth in the JDA and such terms as
mutually agreed upon by the JDA Parties.  Phase III commences if, and
when, the Phase II objectives have been timely satisfied.  However,
Schlumberger has the option to terminate the JDA upon completion of Phase II by
providing notice to GHO within thirty days of such completion; GHO does not have
such an option.  Pursuant to the terms of the JDA, the Phase III joint
venture will be owned jointly by the JDA Parties in proportion to the amount of
qualifying expenditures each JDA Party spent during Phases I and II, but in no
event will GHO own more than 40% of the joint venture.  If GHO’s
proportion of qualifying expenditures is less than 40% of total qualifying
expenditures, then GHO shall have the option of acquiring an additional interest
in the Joint Venture so that its interest in the joint venture will be 40% by
paying to Schlumberger an amount such that GHO’s qualifying expenditures
(including such payment) reaches 40% of total qualifying expenditures (including
such payment).  If GHO’s proportion of total qualifying expenditures
is more than 40%, then Schlumberger shall pay to GHO an amount such that
Schlumberger’s qualifying expenditures (including such payment) as a proportion
of total qualifying expenditures (including such payment) is reduced to
60%.
 
 The costs
being incurred by GHO for the research and development to be performed by it
under the JDA are being funded by the Company out of its working
capital.  The Company’s current expectation is that such costs will
total approximately $600,000 during Phase I.
 
 Joint Development Agreement
(Universal Alternative Fuels Agreement)
 
 On
October 14, 2009, the Company entered into a license agreement with Universal
Alternative Fuels (“UAF”).   Pursuant to the terms of the license
agreement, in material part, (i) UAF purchased an exclusive, world-wide,
royalty-free license, with the right to sub-license and effective for an
unlimited time, to use and exploit the Company’s intellectual property and
technological know-how for the microwave processing of oil shale and coal and
the recovery of energy, energy-producing materials and by-products from oil
shale and coal for a license fee of $750,000; (ii) UAF paid to the Company a
license fee of $750,000 and will issue to the Company shares of common stock of
UAF equal to 20% of the issued and outstanding shares of UAF common stock; and
(iii) UAF agreed to purchase exclusively from the Company all machines to be
manufactured for UAF (or its sub-licensees) under the license agreement, subject
to the Company’s ability to manufacture such machines.
 
 In connection with the execution of the
license agreement, the Company entered into a security agreement with UAF
granting to UAF first priority security interests in (i) the Company’s existing
prototype machine (the “Existing Prototype Machine”) and (ii) the Company’s
patent rights, technology and trademarks as applied to the oil shale and coal
fields of use.  The security interests secure the amount of $1.7
million,andin connection with the execution of the
License Agreement, the Company granted to UAF a first priority security interest
in the Company’s patent rights, technology and trademarks as applied to the oil
shale and coal fields of use.  The security interests granted pursuant
to the security Agreement will terminate and be released upon acceptance by UAF
of the initial machine described in the next paragraph.Contemporaneous with the execution of
the license agreement, UAF issued a purchase order to the Company for an initial
machine capable of processing one ton per hour of oil shale (the “Purchase
Order”).  The purchase price for the initial machine is based on a
formula related to the Company’s cost to manufacture the initial machine and
will not exceed $3.5 million.  Payment of the purchase price is as
follows: (i) UAF will pay $500,000 to the Company six months from the date of
the Purchase Order, (ii) UAF will pay $500,000 to the Company nine months from
the date of the purchase order, (iii) a deemed purchase discount by UAF of
$843,000 was credited against the purchase price on the date of the Purchase
Order, and (iv) the balance of the purchase price will be paid upon completion
of the initial machine, demonstration that it meets the warranted purpose and
acceptance of it by UAF.
  F-54
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 Contemporaneous
with the execution of the Purchase Order to the Company
for an initial machine UAF shall have a “wait and see period of 180 days from
the date of license agreement to terminate that purchase order for the initial
machine; but such right is dependent upon the Company’s failure, within 150 days
from the date of the license agreement, to raise at least $3.4 million in
additional equity capital. If the Company fails to achieve such financing, UAF
shall have the right (but not the obligation) to terminate the Purchase
order.  If UAF so elects to terminate the purchase order the Company
has a 30 day to repurchase this License and retain the existing Prototype
Machine.  The repurchase and retention price shall be
$1.7million.  If the repurchase/retention is not timely
accomplished by the Company, its option to repurchase/retain shall be null and
void and then UAF will retain the license and will have the right to foreclose
on the collateral under the security agreement and take immediate and exclusive
possession and ownership of the Existing Prototype Machine.
 
 The
Company understands that Mr. Thomas Vieweg, who owns 125,000 shares of Common
Stock of the Company and was a former consultant to the Company, is a
principal in UAF.  In addition, the Company understands that certain
other principals of UAF currently are either principals or affiliates of
Professional Offshore Opportunity Fund, Ltd. (“POOF”).  POOF
previously provided certain financing to, and was a securityholder of the
Company.
 
 As of
December 31, 2009 the Company and UAF was in the “wait and see” period and the
Company was not in default and UAF had not terminated the purchase
order.  No machine was built and delivered consequently no activity
was done that would allow the Company to recognize any revenue in
2009.  The $750,000 paid to the Company from UAF has been recognized
on the Consolidated Balance Sheet as current liability (Royalty Advance fee).
The Company has not recognized the 20% interest in UAF since UAF has not shared
and will not share their financial statements and since we do not have any
significant control over UAF the value of this potential asset is
undeterminable.
 
 Reserve Equity Financing
Agreement
 
 On
November 24, 2009, the Company entered into a Reserve Equity Financing Agreement
(the “REF Agreement”) with AGS Capital Group, LLC (“AGS”).  In
connection and contemporaneous with the execution of the REF Agreement, the
Company also entered into a Registration Rights Agreement with AGS (the
“Registration Rights Agreement”).  The Company  paid to AGS
a due diligence fee of $10,000, and on November 30, 2009, the Company issued
300,000 shares of its Common Stock to AGS.  It was determine that the
Company would not be able to meet the conditions under the REF Agreement in
order to obtain an Advance or that the Company will be able to draw down any
portion of the amounts available under the REF Agreement.  The Company
has excise its option to not move forward with this REF Agreement.
  F-55
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 CRC and Mobilestream Asset
Acquisitions
 
 With
respect to the Company’s past acquisitions of the assets of CRC and Mobilestream
Oil, Inc. and the registration under the Securities Act of 1933 on Form S-1,
Registration Statement Number 333-149199 (the “Registration Statement”), of
securities issued to the Carbon Recovery Liquidating Trust and the Mobilestream
Liquidating Trust in connection therewith, specifically (i) the distribution of
22,334,221 shares of the Company’s common stock (the “Shares”) and warrants to
purchase a total of 10,409,407 shares of the Company’s common stock (the
“Warrants”) to the beneficiaries of such liquidating trusts, (ii) the issuance
of 10,409,407 shares of the Company’s common stock upon exercise of the Warrants
(the “Warrant Shares”) and (iii) the resale of the Shares and the Warrant Shares
by the initial recipients thereof (the “Acquisition and Registration”), the
Staff of the Securities and Exchange Commission (the “SEC”) has advised the
Company that in the view of the Staff the Acquisition and Registration may, in
substance, be an attempt to complete a business combination transaction via a
registered offering when it was already started without registration and has
further advised the Company to include the Staff’s view in the Registration
Statement, and the risks to and potential liability of the Company, if any,
associated therewith.  The Company is continuing to evaluate the view
of the Staff of the SEC in this matter and the Company’s options with respect to
the Registration Statement.  In addition, the 35,236,188 shares of
Preferred Stock A issued directly to Mr. Pringle as part of the acquisition of
the assets of Mobilestream were not held in a liquidating trust and the Staff
has advised the Company that such fact should be disclosed in the Registration
Statement. The Company is continuing to evaluate the view of the Staff and it is
not clear whether the Company faces any potential liability as a result of such
shares being issued directly to Mr. Pringle and not included in the liquidating
trust as may have been required pursuant to the terms of the acquisition
documents and therefore the Company has not recorded the fair value of any
potential liability resulting therefrom. The Company recognizes that there may
be a probable contingency loss but the amount of the contingency loss cannot be
reasonably estimated.  Per FASB ASC 450-20 a potential contingency
loss must be both probable and reasonable estimated for the company to record
the loss to the financial statements.
  Vendor/Supplier
Agreements
 
 In June
2007, the Company entered into a purchase agreement with Ingersoll Production
Systems of Rockford, Illinois to build a commercial prototype machine. The total
purchase commitment is approximately $770,000. The Company has currently paid
approximately $620,000 as of December 31, 2008 under this agreement. This amount
is reflected in the accompanying 2008 consolidated balance sheet as part of the
construction in progress component of property and equipment, and, to the extent
of modifications to the prototype machine being made, in the accompanying 2008
consolidated statement of operations and comprehensive loss as R & D
expense. In addition to Ingersoll Production Systems, there are various other
suppliers with which the Company has purchase commitments with; these purchase
commitments are approximately $610,000 and the Company has paid approximately
$600,000 under these agreements through December 31, 2008. These amounts are
also reflected in the accompanying 2008 consolidated balance sheet in the
construction in progress account.
  NOTE
15 -    PATENTS
 
 The
Company currently has three utility patent applications pending in the United
States Patent and Trademark Office ("USPTO") and approximately ten corresponding
utility patent applications pending in international patent offices in
commercially relevant countries. In August 2009, the Company received a Notice
of Allowance for its first application (Serial No 11/610,823) from the
USPTO.   A Notice of Allowance is issued if one or more of the
claims of an application are allowed and precedes the formal patent issuance.
The Company’s patent applications cover its proprietary microwave technology for
recovering hydrocarbons and fossil fuels from sources such as tires, oil shale,
capped wells, shale deposits, and waste oil streams. Legal fees associated with
the above mentioned patent applications are recorded as prepaid patent costs on
the accompanying condensed consolidated balance sheets.  Upon final
approval by the USPTO, the prepaid patent costs will be reclassified to an
intangible asset and amortized over the expected life of the
patent.  The prepaid patent costs are $559,855 and $383,685 at
December 31, 2009 and December 31, 2008, respectively.
  On
December 8, 2009, the U.S. Patent and Trademark Office issued U.S. Patent No.
7,629,427 to the Company.  This issue is for the technology that is
the core of the Company's Patriot 2TM
Tire-to-Fuel Oil Recycling System, in addition to other potential future
applications.  The Patriot 2TM is our
next generation prototype containing additional features and improved
efficiency.  This patent was determined to have a value of $79,203 and
reclassified from prepaid patent to patents on the December 31, 2009
Consolidated Balance Sheets.
  F-56
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 On
October 2, 2009, the Company filed a continuation application with the USPTO for
the microwave processing of (i) oil shale and (ii) coal.
 
 On
October 14, 2009, the Company entered into a license agreement with Universal
Alternative Fuels Inc. (“UAF”).  In connection with the execution of
the license agreement, the Company granted to UAF a first priority security
interest in the Company’s patent rights, technology and trademarks as applied to
the oil shale and coal fields of use.  (See Note 14 – UAF agreement
above).
 
 NOTE
16 -     SHORT-TERM
INVESTMENTS
 
 Cash in
excess of operating requirements is invested in marketable
securities.  All securities are considered available for sale and are
carried at their fair value on the accompanying consolidated  balance
sheet.
 
 The
Company has liquidated all of its investments during the twelve month period
ended December 31, 2009, and did not have any short-term investments at December
31, 2009.
 
 The
Company held the following types of investments at December 31,
2008:
  Cost
                            
                            
                            Fair Value
                            
                            
                            Unrealized loss
                            
                            
                            Realized lossFixed-rate
      securities
                            
                            $
                            125,000
                            
                            
                            $
                            95,000
                            
                            
                            $
                            (30,000
                            )Corporate
      bonds
                            
                            
                            1,826,264
                            
                            
                            
                            1,618,714
                            
                            
                            
                            (207,550
                            )Preferred
      stocks
                            
                            
                            1,681,410
                            
                            
                            
                            843,560
                            
                            
                            
                            
                            
                            
                            
                            (837,850
                            )Total
                            
                            $
                            3,632,674
                            
                            
                            $
                            2,557,274
                            
                            
                            $
                            (237,550
                            )
                            
                            $
                            (837,850
                            )
  In the
fourth quarter of 2008, the Company reclassified $837,850 of unrealized losses
on its investments in preferred stock from accumulated other comprehensive loss
to the consolidated statement of operations and comprehensive loss, as the
impairment is deemed to be other than temporary at December 31, 2008, due to
poor market conditions in the banking sector.
 
 The
Company’s investment in corporate bonds having unrealized losses are in the
banking sector.  The Company evaluated the near-term prospects of the
issuers.  Based on that evaluation and the Company’s ability and
intent to hold these investments for a reasonable period of time sufficient for
a forecasted recovery of fair value, management does not consider these
investments to be other than temporarily impaired at December 31,
2008.  Accordingly, the Company considers the $237,550 of unrealized
losses on the investments in corporate bonds and fixed rate securities to be a
temporary loss on the investments in marketable securities that are available
for sale, and has recorded this loss to accumulated other comprehensive loss in
the stockholders’ equity section of the accompanying consolidated balance sheet
as of December 31, 2008.
  F-57
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
17 -   FAIR VALUE
MEASUREMENTS
 
 The
following tables represent available for sale securities measured at fair value
at December 31, 2009 and December 31, 2008 :
 
 Fair Value at
                              December 31,
                              2009
                            
                            
                            Quoted
                              Prices in
                              Active
                              Markets for
                              Identical
                              Assets
                              ( Level 1)
                            
                            
                            Significant
                              Other
                              Observable
                              Inputs
                              ( Level 2)
                            
                            
                            Significant
                              Unobservable
                              Inputs
                              ( Level 3)LiabilitiesSeverance
      value stocks to be issued
                            
                            $
                            624,000
                            
                            
                            $
                            624,000
                            
                            
                            $
                            -
                            
                            
                            $
                            0Derivative
      financial instruments
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Total
      Liabilities
                            
                            $
                            624,000
                            
                            
                            $
                            624,000
                            
                            
                            $
                            -
                            
                            
                            $
                            0
 
 Fair Value at
                                  December 31,
                                  2008
                                
                                
                                Quoted Prices in
                                  Active Markets
                                  for Identical
                                  Assets
                                  ( Level 1)
                                
                                
                                Significant
                                  Other
                                  Observable
                                  Inputs
                                  ( Level 2)
                                
                                
                                Significant
                                  Unobservable
                                  Inputs
                                  ( Level 3)AssetsFixed-rate
      capital securities
                                
                                $
                                95,000
                                
                                
                                $
                                95,000Corporate
      Bonds
                                
                                
                                1,618,714
                                
                                
                                
                                1,492,621
                                
                                
                                
                                126,093Preferred
      Stock
                                
                                
                                843,560
                                
                                
                                
                                843,560Total
                                
                                $
                                2,557,274
                                
                                
                                $
                                2,431,181
                                
                                
                                $
                                126,093
                                
                                
                                $
                                -LiabilitiesDerivative
      financial instruments
                                
                                $
                                1,591,834
                                
                                
                                $
                                -
                                
                                
                                $
                                -
                                
                                
                                $
                                1,591,834
 
 The
following table presents additional information about Level 3 liabilities
measured at fair value.  Both observable and unobservable inputs
may be used to determine the fair value of positions that the Company has
classified within the Level 3 category.  As a
result, the unrealized gains and losses
for  liabilities within the Level 3 category may
include changes in fair value that were attributable to both observable (e.g.,
changes in market interest rates) and unobservable (e.g., changes in
unobservable long-dated volatilities) inputs.
  F-58
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 Changes
in Level 3 liabilities measured at fair value for the twelve month period ended
December 31, 2009:
 LEVEL 3Beginning
                    Balance January
                    1, 2009
                  
                  
                  Gains
                  
                  
                  Purchase
                    Sales and
                    Settlements
                  
                  
                  Ending Balance
                    December 31, 2009
                  
                  
                  Change in Fair
                    Value of
                    Derivative
                    financial
                    instruments still
                    held at
                    December 31,
                    2009LiabilitiesDerivative
      financial
                    instruments,
      at fair value
                  
                  $
                  1,591,834
                  
                  
                  $
                  (1,591,834
                  )
                  
                  $
                  -
                  
                  
                  $
                  0
                  
                  
                  $
                  (1,591,834
                  )
 
 LEVEL 3Beginning
                    Balance January
                    1, 2008
                  
                  
                  Gains
                  
                  
                  Purchase
                    Sales and
                    Settlements
                  
                  
                  Ending Balance
                    December 31, 2008
                  
                  
                  Change in Fair
                    Value of
                    Derivative
                    financial
                    instruments still
                    held at
                    December 31,
                    2008LiabilitiesDerivative
      financial instruments, at fair value
                  
                  $
                  10,950,670
                  
                  
                  $
                  (9,358,836
                  )
                  
                  $
                  -
                  
                  
                  $
                  1,591,834
                  
                  
                  $
                  (9,358,836
                  )
 
 The
change in fair value of derivative financial instruments are included in the
accompanying condensed consolidated statements of operations and comprehensive
loss, as other income (expense).  The change in fair value of
derivative financial instruments for the twelve month period ended December 31,
2009, the change in fair value is a reduction of $1,591,834.
  F-59
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
18 -   SUPPLEMENTAL DISCLOSURE OF
NON-CASH ACTIVITY FROM CASH FLOW STATEMENTS
  December 31,
                              2009
                            
                            
                            December 31,
                              2008
                            
                            
                            July 19, 2002
                              (Inception) to
                              December 31,
                              2009Preferred
      stock conversions to common stock
                            
                            $
                            -
                            
                            
                            $
                            35,231
                            
                            
                            $
                            35,231Acquisition
      of equipment with long-term debt
                            
                            $
                            -
                            
                            
                            $
                            32,432
                            
                            
                            $
                            181,249Common
      stock issed in exchange for real estate
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            775,800Common
      stock issued to convert accounts payable into equity
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            1,087Subscription
      receivable write-off
                            
                            $
                            -
                            
                            
                            $
                            130,518
                            
                            
                            $
                            130,518Conversion
      of debenture and accrued interest into common stock
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            120,683Common
      and preferred stock issued in connection with the Mobilestream Transaction
      (recorded at the historical basis of Mobilestream)
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            3,346,157
  NOTE
19-     RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2003 AND
2002
 
 The
Company has restated its previously issued financial statements for the period
July 19, 2002 (inception) through December 31, 2002 and its financial statements
for the year ended December 31, 2003. In 2002, the Company had a transaction in
which it reflected the issuance of 150,000 shares of preferred stock, par value
$10, in exchange for an intangible asset valued at $1,500,000. The intangible
asset was subsequently deemed impaired and accordingly was expensed in 2002. The
financial statements have been restated as the transaction was subsequently
rescinded, due to the fact that the preferred stock shares were not formally
issued because the Company did not have authorization to issue preferred shares.
Therefore the transaction was voidable and no expense should have been
recorded.  In 2003, the Company had initially reflected the issuance
of 1,455,000 shares of common stock to two of its founders as being issued for
services provided, valued at $727,500.  The Company has restated its
financial statements to reflect the common stock as a re-issuance of founders’
shares and, as such, no expense should have been initially associated with the
issuance of the founders shares. These transactions resulted in a decrease in
net loss applicable to accumulated deficits of $727,500 and $1,500,000 for the
year ended December 31, 2003 and 2002, respectively.  The net
operating loss for the years ended December 31, 2003 and 2002 were restated to
$203,659 and $508,508, respectively.
  F-60
 
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 The
impact of these adjustments on the Company’s financial results as originally
reported are summarized below:
  As Reported
                                  
                                  
                                  Adjustments
                                  
                                  
                                  As RestatedYear ended December 31,
2002Balance sheetDeficit
      accumulated during the development stage
                                  
                                  $
                                  (2,008,508
                                  )
                                  
                                  $
                                  1,500,000
                                  
                                  
                                  $
                                  (508,508
                                  )Statement of operationsGeneral
      and administrative expenses
                                  
                                  
                                  (2,008,508
                                  )
                                  
                                  
                                  1,500,000
                                  
                                  
                                  
                                  (508,508
                                  )Total
      operating expenses
                                  
                                  
                                  (2,008,508
                                  )
                                  
                                  
                                  1,500,000
                                  
                                  
                                  
                                  (508,508
                                  )Net
      loss
                                  
                                  $
                                  (2,008,508
                                  )
                                  
                                  $
                                  1,500,000
                                  
                                  
                                  $
                                  (508,508
                                  )Basic
      and diluted loss per common share
                                  
                                  $
                                  (0.42
                                  )
                                  
                                  $
                                  0.31
                                  
                                  
                                  $
                                  (0.11
                                  )Statement of cash flowsNet
      loss
                                  
                                  
                                  (2,008,508
                                  )
                                  
                                  
                                  1,500,000
                                  
                                  
                                  
                                  (508,508
                                  )Impairment
      of license
                                  
                                  
                                  1,500,000
                                  
                                  
                                  
                                  (1,500,000
                                  )
                                  
                                  
                                  -Preferred
      stock issued for license
                                  
                                  
                                  1,500,000
                                  
                                  
                                  
                                  (1,500,000
                                  )
                                  
                                  
                                  -Year ended December 31,
2003Balance sheetDeficit
      accumulated during the development stage
                                  
                                  $
                                  (2,939,667
                                  )
                                  
                                  $
                                  2,227,500
                                  
                                  
                                  $
                                  (712,167
                                  )Statement of operationsGeneral
      and administrative expenses
                                  
                                  
                                  (931,159
                                  )
                                  
                                  
                                  727,500
                                  
                                  
                                  
                                  (203,659
                                  )Total
      operating expenses
                                  
                                  
                                  (931,159
                                  )
                                  
                                  
                                  727,500
                                  
                                  
                                  
                                  (203,659
                                  )Net
      loss
                                  
                                  $
                                  (931,159
                                  )
                                  
                                  $
                                  727,500
                                  
                                  
                                  $
                                  (203,659
                                  )Basic
      and diluted loss per common share
                                  
                                  $
                                  (0.19
                                  )
                                  
                                  $
                                  0.15
                                  
                                  
                                  $
                                  (0.04
                                  )Statement of cash flowsNet
      loss
                                  
                                  
                                  (931,159
                                  )
                                  
                                  
                                  727,500
                                  
                                  
                                  
                                  (203,659
                                  )Common
      stock issued for services
                                  
                                  
                                  727,500
                                  
                                  
                                  
                                  (727,500
                                  )
                                  
                                  
                                  -
  F-61
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
20-   RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,
2007
 
 In our
Form 8-K dated April 2, 2009, we reported that our December 31, 2007
consolidated financial statements contained in our 2007 annual report on Form
10-KSB will require restatement and should no longer be relied
upon.   In the same 8-K, we disclosed certain adjustments that
were quantified and known to us at that time.
 
 The
following tables summarize the adjustments made in the restatement of our 2007
consolidated financial statements.  “Column A” adjustments represent
adjustments quantified and disclosed in our Form 8-K dated April 2,
2009.  “Column B” adjustments represent adjustments quantified
subsequent to the filing of our Form 8-K dated April 2, 2009.
 
 Consolidated
Balance Sheet Adjustments
 
 The
following is a summary of the adjustments to our previously issued consolidated
balance sheet as of December 31, 2007:
 
 Column A
Adjustments:
 
 1.
              We
      reclassified prepaid services and stockholders’ equity in the amount of
      $1,808,042 to reflect the issuance of common stock to non-employees for
      services to be performed (see Note 13).  Previously, we had
      reflected this prepayment as
contra-equity.
 2.
              We
      reclassified deferred compensation (contra-equity) as a reduction of
      additional paid-in capital in the amount of $218,000 to comply with ASC
      718.
 3.
              We
      adjusted legal fees of $143,063 associated with the filing of our patents
      as a prepaid asset. Previously, we had reflected these costs as an expense
      on our consolidated statement of operations and comprehensive
      loss.
 
 Column B
Adjustments:
 
 4.
              Column
      B adjustments: We reclassified the Acquisition Warrants (as defined in
      Note 11) as derivative liabilities. Previously, we had reflected the
      Acquisition Warrants as equity.
  F-62
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
20-   RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2007
(CONTINUED)
 
 As Originally
                                                                    Reported
                                                                  
                                                                  
                                                                  Column A
                                                                    Adjustments
                                                                  
                                                                  
                                                                  As Reported inForm
                                                                    8-K datedApril 2,
                                                                    2009
                                                                  
                                                                  
                                                                  Column B
                                                                    Adjustments
                                                                  
                                                                  
                                                                  RestatedASSETSCURRENT
      ASSETSCash
                                                                  
                                                                  $
                                                                  780,425
                                                                  
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  780,425
                                                                  
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  780,425Prepaid
      Services
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  1,808,042
                                                                  
                                                                  
                                                                  
                                                                  1,808,042
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  1,808,042Total
      Current Assets
                                                                  
                                                                  
                                                                  780,425
                                                                  
                                                                  
                                                                  
                                                                  1,808,042
                                                                  
                                                                  
                                                                  
                                                                  2,588,467
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  2,588,467Property
      and equipment
                                                                  
                                                                  
                                                                  373,135
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  373,135
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  373,135Investments
      and deposits
                                                                  
                                                                  
                                                                  74,860
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  74,860
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  74,860Prepaid
      patent costs
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  143,063
                                                                  
                                                                  
                                                                  
                                                                  143,063
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  143,063TOTAL
      ASSETS
                                                                  
                                                                  $
                                                                  1,228,420
                                                                  
                                                                  
                                                                  $
                                                                  1,951,105
                                                                  
                                                                  
                                                                  $
                                                                  3,179,525
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  $
                                                                  3,179,525LIABILITIES
      AND STOCKHOLDERS EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                                                                  
                                                                  
                                                                  119,588
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  119,588
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  119,588Loans
      payable- equipment
                                                                  
                                                                  
                                                                  40,964
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  40,964
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  40,964Loan
      payable to officer
                                                                  
                                                                  
                                                                  150,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  150,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  150,000Total
      current liabilities
                                                                  
                                                                  
                                                                  310,552
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  310,552
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  310,552Loan
      payable -equipment, netof
      current portion
                                                                  
                                                                  
                                                                  51,629
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  51,629
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  51,629Derivative
      financial instruments
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  10,950,670
                                                                  
                                                                  
                                                                  
                                                                  10,950,670Total
      liabilities
                                                                  
                                                                  
                                                                  362,181
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  362,181
                                                                  
                                                                  
                                                                  
                                                                  10,950,670
                                                                  
                                                                  
                                                                  
                                                                  11,312,851STOCKHOLDERS'
      EQUITYPreferred
      stock A - $.001 par value,100,000,000
      shares authorized,35,236,188
      issued and outstanding
                                                                  
                                                                  
                                                                  35,236
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  35,236
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  35,236at
      December 31, 2007Preferred
      stock B - $.001 par value,1,000
      shares authorized, issued, andoutstanding
      at December 31, 2007
                                                                  
                                                                  
                                                                  1
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  1
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  1Common
      stock - $.001 par value,200,000,000
      shares authorized,30,263,330
      issued and outstandingat
      December 31, 2007
                                                                  
                                                                  
                                                                  30,358
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  30,358
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  30,358Additional
      paid-in capital
                                                                  
                                                                  
                                                                  20,497,849
                                                                  
                                                                  
                                                                  
                                                                  (218,000
                                                                  )
                                                                  
                                                                  
                                                                  20,279,849
                                                                  
                                                                  
                                                                  
                                                                  (13,951,679
                                                                  )
                                                                  
                                                                  
                                                                  6,328,170Stock
      subscription receivable
                                                                  
                                                                  
                                                                  (185,693
                                                                  )
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  (185,693
                                                                  )
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  (185,693
                                                                  )Deficit
      accumulated during thedevelopment
      stage
                                                                  
                                                                  
                                                                  (17,418,997
                                                                  )
                                                                  
                                                                  
                                                                  143,063
                                                                  
                                                                  
                                                                  
                                                                  (17,275,934
                                                                  )
                                                                  
                                                                  
                                                                  3,001,009
                                                                  
                                                                  
                                                                  
                                                                  (14,274,925
                                                                  )2,958,754
                                                                  
                                                                  
                                                                  
                                                                  (74,937
                                                                  )
                                                                  
                                                                  
                                                                  2,883,817
                                                                  
                                                                  
                                                                  
                                                                  (10,950,670
                                                                  )
                                                                  
                                                                  
                                                                  (8,066,853
                                                                  )Treasury
      stock
                                                                  
                                                                  
                                                                  (66,473
                                                                  )
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  (66,473
                                                                  )
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  (66,473
                                                                  )Prepaid
      services
                                                                  
                                                                  
                                                                  (1,808,042
                                                                  )
                                                                  
                                                                  
                                                                  1,808,042
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  -Deferred
      compensation
                                                                  
                                                                  
                                                                  (218,000
                                                                  )
                                                                  
                                                                  
                                                                  218,000
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  -Total
      stockholders' equity
                                                                  
                                                                  
                                                                  866,239
                                                                  
                                                                  
                                                                  
                                                                  1,951,105
                                                                  
                                                                  
                                                                  
                                                                  2,817,344
                                                                  
                                                                  
                                                                  
                                                                  (10,950,670
                                                                  )
                                                                  
                                                                  
                                                                  (8,133,326
                                                                  )TOTAL
      LIABILITIES ANDSTOCKHOLDERS'
      EQUITY
                                                                  
                                                                  $
                                                                  1,228,420
                                                                  
                                                                  
                                                                  $
                                                                  1,951,105
                                                                  
                                                                  
                                                                  $
                                                                  3,179,525
                                                                  
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  3,179,525
  F-63
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
20-   RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2007
(CONTINUED)
 
 Consolidated
Statement of Operations and Comprehensive Loss Adjustments
 
 The
following is a summary of the adjustments to our previously issued consolidated
statement of operations and comprehensive loss for the year ended December
31:
 
 Column A
Adjustments:
 
 1.
              We
      adjusted legal fees of $143,063 associated with the filing of our patents
      as a prepaid asset. Previously, we had reflected these costs as an expense
      on our consolidated statement of operations and comprehensive
      loss.
 2.
              Except
      for the addition of R&D to be in compliance with ASC 730-10, “Accounting for Research and
      Development Costs”, all operating expenses were collapsed into
      general and administrative
expenses.
 
 Column B
Adjustments:
 
 3.
              As
      derivative liabilities, the Acquisition Warrants (as defined in Note 11)
      are measured at fair value each reporting period (marked to market) with
      the gains and losses being recognized in earnings.  Accordingly,
      we adjusted our statement of operations and other comprehensive loss to
      reflect income of $3,765,492 as a result of the change in the fair value
      of the Acquisition Warrants. Previously, we recognized the Acquisition
      Warrants as equity and did not did not recognize any change in the fair
      value.
  F-64
 
 Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
  As Originally
                                                      
                                                      
                                                      Column A
                                                      
                                                      
                                                      As Reported in
                                                        Form 8-Kdated
                                                        April 2,2009
                                                      
                                                      
                                                      Column BReported
                                                      
                                                      
                                                      Adjustments
                                                      
                                                      
                                                      Restated
                                                      
                                                      
                                                      Adjustments
                                                      
                                                      
                                                      AdjustedREVENUES
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -COST
      OF SALESGROSS
      PROFITOPERATING
      EXPENSESConsulting
      fees
                                                      
                                                      
                                                      117,881
                                                      
                                                      
                                                      
                                                      (117,881
                                                      )Professional
      fees for legal and accounting
                                                      
                                                      
                                                      572,411
                                                      
                                                      
                                                      
                                                      (572,411
                                                      )Investment
      banking fees and investor relations
                                                      
                                                      
                                                      4,813,322
                                                      
                                                      
                                                      
                                                      (4,813,322
                                                      )General
      and administrative
                                                      
                                                      
                                                      4,799,415
                                                      
                                                      
                                                      
                                                      5,231,885
                                                      
                                                      
                                                      
                                                      10,031,300
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      10,031,300Research
      and development
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      222,530
                                                      
                                                      
                                                      
                                                      222,530
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      222,530Depreciation
                                                      
                                                      
                                                      93,864
                                                      
                                                      
                                                      
                                                      (93,864
                                                      )Total
      Operating expenses
                                                      
                                                      
                                                      10,396,893
                                                      
                                                      
                                                      
                                                      (143,063
                                                      )
                                                      
                                                      
                                                      10,253,830
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      10,253,830OPERATING
      LOSS
                                                      
                                                      
                                                      (10,396,893
                                                      )
                                                      
                                                      
                                                      143,063
                                                      
                                                      
                                                      
                                                      (10,253,830
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (10,253,830
                                                      )OTHER
      INCOME (EXPENSE)Loss
      on deposits and other
                                                      
                                                      
                                                      (100,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (100,000
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (100,000
                                                      )Change
      in fair value of derivative financial instruments
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      3,765,492
                                                      
                                                      
                                                      
                                                      3,765,492Interest
      expense
                                                      
                                                      
                                                      (23,322
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (23,322
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (23,322
                                                      )Interest
      income
                                                      
                                                      
                                                      33,329
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      33,329
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      33,329Total
      Other income (expense)
                                                      
                                                      
                                                      (89,993
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (89,993
                                                      )
                                                      
                                                      
                                                      3,765,492
                                                      
                                                      
                                                      
                                                      3,675,499NET
      LOSS APPLICABLE TOCOMMON
      SHARES
                                                      
                                                      $
                                                      (10,486,886
                                                      )
                                                      
                                                      $
                                                      143,063
                                                      
                                                      
                                                      $
                                                      (10,343,823
                                                      )
                                                      
                                                      $
                                                      3,765,492
                                                      
                                                      
                                                      $
                                                      (6,578,331
                                                      )BASIC
      AND DILUTED LOSSPER
      SHARE
                                                      
                                                      $
                                                      (0.40
                                                      )
                                                      
                                                      $
                                                      0.01
                                                      
                                                      
                                                      $
                                                      (0.39
                                                      )
                                                      
                                                      $
                                                      0.14
                                                      
                                                      
                                                      $
                                                      (0.25
                                                      )WEIGHTED
      AVERAGENUMBER
      OF COMMONSHARES
                                                      
                                                      
                                                      26,489,850
                                                      
                                                      
                                                      
                                                      26,489,850
                                                      
                                                      
                                                      
                                                      26,489,850
                                                      
                                                      
                                                      
                                                      26,489,850
                                                      
                                                      
                                                      
                                                      26,489,850
 F-65
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
20-   RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THEYEAR ENDED DECEMBER 31,
2007 (CONTINUED)
 
 Consolidated
Statement of Cash Flows Adjustments
 
 In light
of the adjustments made to our 2007 consolidated balance sheet and statements of
operations and comprehensive loss, we adjusted our previously issued
consolidated statement of cash flows as follows:
  As Originally
                                        Reported
                                      
                                      
                                      Column A
                                        Adjustments
                                      
                                      
                                      As Reportedon
                                        Form 8-Kdated
                                        April 2,2009
                                      
                                      
                                      Column B
                                        Adjustments
                                      
                                      
                                      AdjustedCASH FLOWS FROMOPERATING
      ACTIVITESNet
      loss
                                      
                                      $
                                      (10,486,886
                                      )
                                      
                                      $
                                      143,063
                                      
                                      
                                      $
                                      (10,343,823
                                      )
                                      
                                      $
                                      3,765,492
                                      
                                      
                                      $
                                      (6,578,331
                                      )Adjustments
      to reconcile netloss
      to net cash used inoperating
      activities:Depreciation
                                      
                                      
                                      93,864
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      93,864
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      93,864Preferred
      stock issued for services
                                      
                                      
                                      400,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      400,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      400,000Common
      stock issued for services
                                      
                                      
                                      7,107,000
                                      
                                      
                                      
                                      (773,336
                                      )
                                      
                                      
                                      6,333,664
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      6,333,664Amortization
      of prepaid common stock issued for services
                                      
                                      
                                      
                                      
                                      
                                      
                                      773,458
                                      
                                      
                                      
                                      773,458
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      773,458Amortization
      of deferred compensation
                                      
                                      
                                      109,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      109,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      109,000Loss
      on sale of property, plant and equipment
                                      
                                      
                                      11,775
                                      
                                      
                                      
                                      (1
                                      )
                                      
                                      
                                      11,774
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      11,774Loss
      on sale of real estate and other
                                      
                                      
                                      
                                      
                                      
                                      
                                      100,000
                                      
                                      
                                      
                                      100,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      100,000Change
      in fair value of derivative liability
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      (3,765,492
                                      )
                                      
                                      
                                      (3,765,492
                                      )Change
      in operating assets and liabilitiesDeposits
      and other
                                      
                                      
                                      70,140
                                      
                                      
                                      
                                      (100,000
                                      )
                                      
                                      
                                      (29,860
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (29,860
                                      )Prepaid
      patent costs
                                      
                                      
                                      
                                      
                                      
                                      
                                      (143,063
                                      )
                                      
                                      
                                      (143,063
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (143,063
                                      )Accounts
      payable and accrued liabilities
                                      
                                      
                                      5,542
                                      
                                      
                                      
                                      (1
                                      )
                                      
                                      
                                      5,541
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      5,541Total
      adjustments
                                      
                                      
                                      7,797,321
                                      
                                      
                                      
                                      (142,943
                                      )
                                      
                                      
                                      7,654,378
                                      
                                      
                                      
                                      (3,765,492
                                      )
                                      
                                      
                                      3,888,886Net
      cash used in operating activities
                                      
                                      
                                      (2,689,565
                                      )
                                      
                                      
                                      120
                                      
                                      
                                      
                                      (2,689,445
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (2,689,445
                                      )
  F-66
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
20-   RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2007
(CONTINUED)
  AsOriginally
                                  Reported
                                
                                
                                Column A
                                  Adjustments
                                
                                
                                As Reportedon
                                  Form 8-K
                                  dated April2,
                                  2009
                                
                                
                                Column B
                                  Adjustments
                                
                                
                                AdjustedCASH
      FLOWS FROMINVESTING
      ACTIVITIESPurchase
      of property and equipment
                                
                                
                                (24,033
                                )
                                
                                
                                
                                
                                
                                (24,033
                                )
                                
                                
                                
                                
                                
                                (24,033
                                )Proceeds
      from sale of property and equipment
                                
                                
                                34,200
                                
                                
                                
                                
                                
                                
                                34,200
                                
                                
                                
                                
                                
                                
                                34,200Net
      cash provided by (used in) investing activities
                                
                                
                                10,167
                                
                                
                                
                                -
                                
                                
                                
                                10,167
                                
                                
                                
                                -
                                
                                
                                
                                10,167CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance
      of common stock for cash
                                
                                
                                1,168,461
                                
                                
                                
                                1
                                
                                
                                
                                1,168,462
                                
                                
                                
                                
                                
                                
                                
                                1,168,462Issuance
      of equity securities as paid- in-capital for merger and
    other
                                
                                
                                201,464
                                
                                
                                
                                (201,464
                                )
                                
                                
                                -
                                
                                
                                
                                
                                
                                
                                
                                -Liability
      for stock to be issued
                                
                                
                                (201,343
                                )
                                
                                
                                201,343
                                
                                
                                
                                -
                                
                                
                                
                                
                                
                                
                                
                                -Proceeds
      from stock subscription receivable
                                
                                
                                
                                
                                
                                
                                475,000
                                
                                
                                
                                475,000
                                
                                
                                
                                
                                
                                
                                
                                475,000(Increase)
      decrease in stock subscription receivable
                                
                                
                                475,000
                                
                                
                                
                                (475,000
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Proceeds
      from officer loan
                                
                                
                                150,000
                                
                                
                                
                                
                                
                                
                                
                                150,000
                                
                                
                                
                                
                                
                                
                                
                                150,000Purchase
      of treasury stock
                                
                                
                                (66,473
                                )
                                
                                
                                
                                
                                
                                
                                (66,473
                                )
                                
                                
                                
                                
                                
                                
                                (66,473
                                )Repayment
      of loans payable
                                
                                
                                (37,288
                                )
                                
                                
                                
                                
                                
                                
                                (37,288
                                )
                                
                                
                                
                                
                                
                                
                                (37,288
                                )Net
      cash provided by financing activities
                                
                                
                                1,689,821
                                
                                
                                
                                (120
                                )
                                
                                
                                1,689,701
                                
                                
                                
                                -
                                
                                
                                
                                1,689,701NET
      DECREASE IN CASH AND CASH EQUIVALENTS
                                
                                
                                (989,577
                                )
                                
                                
                                
                                
                                
                                
                                (989,577
                                )
                                
                                
                                
                                
                                
                                
                                (989,577
                                )CASH
      AND CASH EQUIVALENTS- BEGINNING OF YEAR
                                
                                
                                1,770,002
                                
                                
                                
                                
                                
                                
                                
                                1,770,002
                                
                                
                                
                                
                                
                                
                                
                                1,770,002END
      OF YEAR
                                
                                $
                                780,425
                                
                                
                                
                                
                                
                                
                                $
                                780,425
                                
                                
                                
                                
                                
                                
                                $
                                780,425SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW ACTIVITIES:Interest
      paid
                                
                                $
                                -
                                
                                
                                $
                                22,134
                                
                                
                                $
                                22,134
                                
                                
                                $
                                -
                                
                                
                                $
                                22,134
  F-67
  Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009
 NOTE
21 -   SUBSEQUENT
EVENTS
 
 Between
January 1, 2010 and December 17, 2010, the Company has sold 1,835,922 shares of
its common stock for $617,535 in cash.
 
 Between
January 1, 2010 and December 17, 2010, the Company has received approximately
$1.6 million dollars in cash in exchange for numerous convertible promissory
notes payable.  These convertible promissory notes payable can be
converted into our Series A Preferred Stock at a conversion prices of
approximately $0.24 per share, the notes have a maturity date of May 31,
2011,  none of the promissory notes have be converted to preferred
stock as of the issuance of these Consolidated financial
Statements.
 
 Between
January 1, and December 17, 2010, the Company raised $320,000 from various
convertible notes payable. These convertible notes payable can be converted to
common stock.
 
 Between
January 1, and December 17, 2010, the Company issued 9,787,783 shares of common
stock for services.
 
 On
January 16, 2010, the Board of Directors extended the expiration date of all the
Acquisition Warrants (see Note 11 above for details) from March 31, 2010 to
December 31, 2010.
 
 On
January 26, 2010, the Swain Severance Agreement was amended such that the
remaining 1.2 million shares of the Company’s registered common stock to be
issued on future dates in 2010 and 2011 was replaced by issuing Mr. Swain 1.4
million shares of its restricted common stock subject to SEC rule 144 on January
27, 2010.
 
 On
January 29, 2010, the Company issued 100,000 shares of its common stock to Frank
Pringle in fulfillment of an obligation under the Pringle’s Severance
agreement.
 
 On
January 29, 2010, the Company entered into an agreement with the holders of
Company’s stock warrants pursuant to the agreement the holders of the Company’s
$.80 stock warrants agreed to the cancellation of 400,000 warrants to purchase
Common Stock of the Company at $0.80 per share in exchange for the issued 40,000
shares of its Common Stock.
 
 On
February 1, 2010, the Company issued, pursuant to January 19, 2010 approvals of
the Board of Directors of the Company, the following shares of the Company’s
Common stock: (i) 10,000 shares of its Common Stock to General Lincoln Jones
III, a director of the Company, (ii) 10,000 shares of its Common Stock to
Frederick A. Clark, a director of the Company, (iii) 15,000 shares of its Common
Stock to Kim Thorne O’Brien, a director of the Company, and (iv) 75,000 shares
of its Common Stock to Jonathan Simon, a director of the Company.
 
 On
February 1, 2010, the Company entered into an agreement with the holders of
Company’s stock warrants pursuant to the agreement the holders of the Company’s
$2.50 stock warrants agreed to the cancellation of 290,000 warrants to purchase
Common Stock of the Company at $2.50 per share in exchange for the issued 48,333
shares of its Common Stock. Of which, 85,000 of the cancelled warrants and
14,167 of the common shares were for Jonathan Simon, a director of the
company.
  F-68


Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009


On
February 9, 2010, the Company entered into a Consulting Services Agreement with
Jeffrey J. Andrews, its Chief Financial Officer, effective February 1, 2010, as
of which date Mr. Andrews is no longer an employee of the Company and is
continuing to provide his services to the Company as a consultant.





Pursuant
to the Consulting Services Agreement, the Company acknowledged and agreed that
$204,485 is due to Mr. Andrews as a result of the severance provisions of Mr.
Andrews’ employment agreement previously in effect and consequently agreed to
(i) pay to Mr. Andrews $120,000 in cash over a twelve month period split evenly
into 24 payments payable twice per month and (ii) issue to Mr. Andrews shares of
the Company’s Common Stock valued at $84,845, split into 24 issuances
contemporaneous with the payments made pursuant to the previous clause, which
shares would be valued at a 10% discount to the public market price of a share
of the Company’s Common Stock (the “Market Price”) at the time of each issuance
and which shares would be shares previously registered under the Securities Act
of 1933, as amended (the “Securities Act”), on Form S-8 (“S-8
Shares”).





Mr.
Andrews Consulting Services Agreement was terminated on September 21, 2010; all
amounts owed were settled with common stock.





Further,
pursuant to the Consulting Services Agreement, stock options to purchase
1,000,000 shares of the Company’s Common Stock previously granted to Mr. Andrews
exercisable at $1.18 per share, of which the option to purchase 400,000 shares
had already vested, subject to stockholder approval of an amendment to the plan
pursuant to which they were issued, was replaced with a Warrant to purchase
1,000,000 shares of the Company’s Common Stock at $1.18 per share, of which
400,000 is immediately exercisable and the remainder of which is exercisable on
January 31, 2011, except that the Warrant will become immediately exercisable in
full in the event that the Company terminates the Consulting Services Agreement
at any time or Mr. Andrews terminates the Consulting Services Agreement after
six months.  The Warrant expires on January 31, 2013.





In
addition, the Company acknowledged that it owed Andrews $139,000 for past
services performed by Mr. Andrews outside the scope of his employment with the
Company and consequently agreed with Mr. Andrews to issue to Mr. Andrews (i)
250,000 S-8 Shares and (ii) 250,000 shares of its Common Stock not registered
under the Securities Act, which shares were issued February 2, 2010 and February
5, 2010, respectively.





On
February 4, 2010 the Company entered into an agreement to exchange previously
granted employee stock options which were subject to shareholders’ approval for
Company warrants.  Mr. Koehl was issued 400,000 warrants with an
exercise price of $1.18 per share in exchange for the 400,000 options, this
warrants are exercisable immediately and have an expiration date of December 31,
2018.





On March
4, 2010, the Company received the second $300,000 payment due as part of phase I
under the joint development agreement entered into on April 23, 2009 with
Schlumberger Technology Corporation and Schlumberger Holdings
Limited.




F-69




Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009


On March
29, 2010, the Company entered into an agreement with the holders of Company’s
stock warrants pursuant to the agreement the holders of the Company’s $2.75
stock warrants agreed to the cancellation of 352,106 warrants to purchase Common
Stock of the Company at $2.75 per share in exchange for the issued 73,691 shares
of its Common Stock.





Between
January 1, 2010 and December 17, 2010, the Company issued 2,270,002 common stock
warrants to various vendors for services rendered or for services to be
rendered.  The warrants have an exercise price ranging from $.25 to
$1.30 and all warrants expire within thirty months from date of
issuance.





The Board
of Directors (the “Board”) of Global Resource Corporation (the “Company”)
declared a dividend, payable to stockholders of record on March 11, 2010 (the
“Record Date”), of one right (a “Right”) per each share of outstanding Common
Stock of the Company, par value $0.001 per share (“Common Stock”), to purchase
1/1,000th of a share of Series I Preferred Stock, par value $0.001 per share, of
the Company (the “Preferred Stock”), at a price of $100.00 per share (such
amount, as may be adjusted from time to time as provided in the Rights
Agreement, the “Purchase Price”).  In connection therewith, the
Company entered into a Rights Agreement, dated March 11, 2010 (as the same may
be amended from time to time, the “Rights Agreement”) with Olde Monmouth Stock
Transfer Co., Inc., as Rights Agent (the “Rights Agent”).





On March
8, 2010, the Board of Directors of the Company elected Paul Somerville and
Edward Szofer to its Board of Directors. They each received 100,000 shares of
the Company’s Common stock.





On June
2, 2010, the Company entered into a five years lease for a new lab facility and
new corporate office headquarters facility in North Carolina. The monthly
payments begin at $13,615 per month and the lease expires March
2015.





In June
of 2010, as a result of the new North Carolina new lab facility, the Company
negotiated a settlement for the former R&D lab lease in Berlin, New Jersey;
under the terms of this settlement the Company will pay $16,200 between July 1,
2010 and May 1, 2011.  On June 25th 2010
the leaseholder of the Mount Laurel, New Jersey exercised its right to the
$47,500 letter of credit for delinquent payments of rent.  The company
has engaged a commercial real estate broker to market the in Mount Laurel New
Jersey for sublet.





In April
2010 Mr. Jeff Kimberly filed a lawsuit against the Company for wrongful
termination of his employment contract. In Mr. Kimberly’s lawsuit he is asking
for the remaining salary and stock option due him per his employment contract of
September 23, 2008. The Company is currently in settlement negotiation with Mr.
Kimberly.





In May
2010 the Company raised a total of $1.0 million dollars in new equity
investments, consequently the full payments to Mr. Pringle shall recommence at
$16,666 per month and the accrued liability will begin to be paid in six equal
installments.





On July
16, 2010 Brian Ettinger resigned as Chairman of the Board.  Upon his
resignation the company deemed all shares issued and options granted in his
consulting agreement as earned. The company also agreed to pay him $80,000 which
includes approximately $53,000 for an outstanding invoice for legal
services.  The Company entered into a one year consulting agreement
with Mr. Ettinger. For all opportunities agreed upon in writing by the Company,
Mr. Ettinger shall receive a consulting fee equal to 5% of the gross revenues
received by the Company.




F-70




Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009


The
Company received from UAF a notice of termination (the "Termination
Notice") of the License Agreement and Purchase Order and a notice of foreclosure
("Foreclosure Notice") in connection with the Security Agreement.  The
Company believes that, for a number of reasons, pursuant to the terms of the
License Agreement and all related agreements, the Termination Notice and
Foreclosure Notice are invalid. On July 26, 2010, the Company issued a notice of
default ("Default Notice") to UAF as a result of UAF's failure to issue the
Equity Interests and make the required Purchase Price payments pursuant to
the terms of the License Agreement and Purchase Order.  UAF has 60 days
from the date of the Default Notice to cure such breach.  If UAF has not
cured the breach within the 60 day time frame the Default Notice serves as
notice of termination by the Company of the License Agreement and Purchase
Order. Upon such termination UAF's lien pursuant to the Security Agreement
would terminate.  There are no assurances as to whether UAF will cure the
breach, or whether UAF will recognize and honor the Default Notice or seek
to enforce its Termination Notice and Foreclosure Notice, which the Company
believes are invalid. We cannot predict the outcome of this
dispute.









F-71




Global
Resource Corporation
 (A
Development Stage Company)
 Notes
to the Consolidated Financial Statements
 December
31, 2009


NOTE
23-   RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30,
2009





The
Company had previously inappropriately reported severance payable which should
have been recorded to equity of 960,000 dollars associated with the Eric Swain
agreement in the September 30, 2009, 10-Q filed on November 23, 2009. The
reclassification had no impact on previously reported operating losses, net
losses or cash flows.





The
Company assessed the materiality of the reclassification in accordance with SEC
Staff accounting Bulletin No. 108, Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements and determined the classification error was immaterial to the
previous report. The effect of the reclassification is shown in the following
table.





Condensed
Consolidated Balance Sheets


September 30, 2009





Asreported
                                      
                                      
                                      Adjustments
                                      
                                      
                                      RestatedASSETSTOTAL
      ASSETS
                                      
                                      $
                                      2,839,475
                                      
                                      
                                      
                                      
                                      
                                      $
                                      2,839,475LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIES
                                      
                                      
                                      1,108,849
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,108,849LONG-TERM
      LIABILITIESLoans
      payable - equipment, net of current portion
                                      
                                      
                                      2,829
                                      
                                      
                                      
                                      
                                      
                                      
                                      2,829Capital
      lease obligation - equipment, net of current portion
                                      
                                      
                                      7,664
                                      
                                      
                                      
                                      
                                      
                                      
                                      7,664Severance
      payable, net of current portion
                                      
                                      
                                      4,504,714
                                      
                                      
                                      
                                      (960,000
                                      )
                                      
                                      
                                      3,544,714Derivative
      financial instruments
                                      
                                      
                                      131,150
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      131,150Total
      long-term liabilities
                                      
                                      
                                      4,646,357
                                      
                                      
                                      
                                      (960,000
                                      )
                                      
                                      
                                      3,686,357Total  liabilities
                                      
                                      
                                      5,755,206
                                      
                                      
                                      
                                      (960,000
                                      )
                                      
                                      
                                      4,795,206COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITYPreferred
      stock  A - $.001 par value 100,000,000 shares authorized, none
      issued and outstanding at June 30, 2009, 5,000 issued and outstanding at
      December 31, 2008Common
      stock, $.001 par value; 200,000,000 shares authorized, 70,400,664 shares
      issued and 63,705,703 outstanding at September 30, 2009, 69,549,164 shares
      issued and 62,854,203  outstanding at December 31,
      2008
                                      
                                      
                                      70,400
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      70,400Additional
      paid-in capital
                                      
                                      
                                      38,370,594
                                      
                                      
                                      
                                      960,000
                                      
                                      
                                      
                                      39,330,594Accumulated
      other comprehensive loss
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      -Deficit
      accumulated in the development stage
                                      
                                      
                                      (39,640,252
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (39,640,252
                                      )(1,199,258
                                      )
                                      
                                      
                                      960,000
                                      
                                      
                                      
                                      (239,258
                                      )Treasury
      stock
                                      
                                      
                                      (1,716,473
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (1,716,473
                                      )Total
      stockholders' equity
                                      
                                      
                                      (2,915,731
                                      )
                                      
                                      
                                      960,000
                                      
                                      
                                      
                                      (1,955,731
                                      )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                      
                                      $
                                      2,839,475
                                      
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      2,839,475





F-72




Item
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.





There are
not and have not been any disagreements between the Company and its accountants
on any matter of accounting principles, practices or financial statement
disclosure or any reportable event as described in paragraph (a)(1)(v) of Item
304 of Regulation S-K.





Item
9A(T). Controls and Procedures.





Evaluation of Disclosure
Controls and Procedures




In connection with the preparation of
the Company’s Annual Report on Form 10-K, an evaluation was carried out by our
management, with participation of our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (“Exchange Act”) as of December 31,
2009.  Disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports filed and submitted under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified, and that such information is accumulated and communicated
to management, including the Company’s principal executive officer and
principal financial officer, to allow timely decisions regarding required
disclosure.




During evaluation of disclosure
controls and procedures as of December 31, 2009, conducted as part of the
Company’s annual audit and preparation of our annual financial statements,
several material weaknesses were identified.  As a result of the
material weaknesses, described more fully below, our principal executive officer
and principal financial officer concluded that, as of December 31, 2009, the
Company’s disclosure controls and procedures were ineffective.




The
Company instituted and is continuing to implement corrective actions with
respect to the deficiencies in our disclosure controls and
procedures.




Management’s Annual Report
on Internal Control over Financial Reporting




Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. The
Company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of the Company's
financial reporting and the preparation of consolidated financial statements for
external purposes in accordance with accounting principles generally accepted in
the United States of America.  Because of its inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
in future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.




Management
has conducted, with the participation of the Company’s principal executive
officer and principal financial officer, an evaluation of the effectiveness of
the Company's internal control over financial reporting as of December 31,
2009.  Management’s assessment of internal control over financial
reporting was conducted using the criteria set forth in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).




A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the Company’s annual or interim financial
statements will not be prevented or detected on a timely basis.  Based
on management’s assessment over financial reporting, management believes as of
December 31, 2009, the Company’s internal control over financial reporting was
not effective due to the following material weaknesses:




·
            The
      Company lacks adequate accounting resources to address non routine and
      complex transactions and financial reporting matters on a timely
      basis.




·
            The
      Company lacks adequate journal entry approval and disclosure controls
      needed to identify and prevent misstatements in the consolidated financial
      statements and accompanying
footnotes.




·
              During
      part of the year the Board of Directors lacked a director qualified as an
      audit committee expert.
  ·
              The
      Company lacks adequate controls to prevent double counting of
      transactions.
  ·
              The
      Company lacks adequate controls to capture and record transactions
      accurately.


32


·
            The
      Company’s control environment does not have adequate segregation of
      duties; the Company only had one person performing all accounting-related
      on-site duties.




Our
independent registered public accounting firm, Cherry, Bekaert
&  Holland, L.L.P. has not prepared an attestation report
regarding our internal controls over financial reporting per existing SEC rules
for non-accelerated filers.




Remediation
of Material Weaknesses in Internal Control over Financial
Reporting




The
Company has commenced efforts to address the material weaknesses in its internal
control over financial reporting and its control environment through the
following actions:




·
            Supplementing
      existing resources with technically qualified third party
      consultants.




·
            Instituting
      a more stringent approval process for financial
    transactions




·
            Performing
      additional procedures and analysis for significant transactions as a
      mitigating control in the control environment due to segregation of duties
      issues.




The
Company believes that the consolidated financial statements fairly present, in
all material respects, the Company’s consolidated balance sheets as of December
31, 2009 and 2008 and the related consolidated statements of operations and
comprehensive loss, stockholders’ equity (deficit), and cash flows for the
years ended December 31, 2009 and 2008, and cumulative period July 19, 2002
(inception) to December 31, 2009  in conformity with generally
accepted accounting principles, notwithstanding the material weaknesses we
identified.




Changes
in Internal Control over Financial Reporting




Other
than described above, there have been no changes in the Company’s internal
control over financial reporting during the most recently completed fiscal year
ended December 31, 2009, that have materially affected or are reasonably likely
to materially affect the Company’s internal control over financial
reporting.




Item
9B. Other Information.





None.





PART
III





Item
10. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.





(a)  Identification
of Directors and Executive Officers.





There have been changes to our officers
and directors during the fiscal year ended December 31, 2009 and through the
date of the filing of this Annual Report.  On April 17, 2009, the
Company’s Chief Operating Officer, Wayne J. Koehl, retired.Effective July 6, 2009, Eric Swain, the
Company’s Chief Executive Officer was terminated for cause and removed from the
Company’s Board of Directors.  Upon Mr. Swain’s removal, effective
July 6, 2009, the Board appointed Peter A. Worthington, director of the Company
and its Interim Chairman of the Board at the time, to the position of Chief
Executive Officer.  On November 11, 2009, Peter A.
Worthington resigned from the position of Chief Executive Officer of the Company
as well as from its Board of Directors, including as Interim Chairman of the
Board.  On November 11, 2009, the Board elected Mr. Brian Ettinger to
the Board of Directors of the Company and appointed him as the Chairman of the
Board, filling the vacancy created by the resignation of Mr.
Worthington.On November 11, 2009, the Board
appointed Ken Kinsella to the position of Chief Executive Officer of the
Company.


33


On February 9, 2010, the Company
entered into a consulting services arrangement with Jeffrey Andrews, the
Company’s Chief Financial Officer, Secretary and Treasurer, pursuant to which
Jeffrey Andrews would no longer be an employee of the Company, effective
February 1, 2010, but instead would provide consulting services to the
Company.On September
21, 2010, the consulting services agreement with Jeff Andrews was terminated.
Since February 1, 2010, Mr. Kinsella, has acted as the Company’s principal
financial officer.On
March 9, 2010, General Lincoln Jones III and Fredrick Clark, each a director,
resigned from the Board of Directors. On March 9, 2010, the Board of Directors
of the Company elected Mr. Paul Somerville and Mr. Edward Szofer to the Board of
Directors. On March
25, 2010, the Company terminated Jeffrey T. Kimberly who was appointed as the
Company’s Chief Operating Officer on February 7, 2008 and promoted to its
President on August 13, 2008. On April 28, 2010, Paul Somerville resigned as
director and Mr. Kinsella and David Ames were elected to serve as directors on
the Board of Directors.  On July 8, 2010 Kim O’Brien and Jonathan
Simon resigned from the Board of Directors.  On July 16, 2010, Brian
Ettinger resigned as director and Chairman of the Board.  On July 27,
2010, Ken Kinsella was appointed to serve as the Company’s President and
Chairman of the Board.





The following table sets forth
certain information regarding the Company’s directors and executive officers as
of December  23 2010:





Name
                
                Age
                
                Position and Offices with the
      CompanyKen
      Kinsella
                
                46
                
                Chief
      Executive Officer, President and Chairman of the BoardDavid
      Ames
                
                61
                
                DirectorEdward
      Szofer
                
                51
                
                DirectorPaul
      J. Sweeney
                
                41
                
                Director





The Company’s officers and
directors are elected annually for a one year term or until their respective
successors are duly elected and qualified or until their earlier resignation or
removal.





Ken
Kinsella has been the Chief Executive Officer of the Company since
November 11, 2009.  He has been a director of the Company since April
28, 2010 and was appointed as the Company’s President and Chairman of the Board
on July 27, 2010. Mr. Kinsella has extensive senior executive experience in the
operations and management of several top organizations including both private
and publicly listed NASDAQ companies. Prior to joining the Company, he was a
Founding Partner in Tribe Equity Limited, a provider of capital and corporate
growth strategies to rapidly growing small and medium businesses founded in
2007.  Prior to Tribe Equity Limited, since 2005, he was the CEO of
Invicta Investments Limited, an organization that specialized in the
construction of transactions including international property, energy,
renewables and corporate equity deals in the United States and
Europe.   Mr. Kinsella received an Honors Business Degree from Trinity
College, Dublin, Ireland, in 1988.





David
Ameshas
been a director of the Company sinceApril 28, 2010. Mr.
Ames, served as the President and CEO of the public company Global Energy
Holdings Group from 2006 to 2010. Mr. Ames was co-founder and Chairman/CEO of
Alterna Energy LLC, from 2004 to 2006 which advanced technology in alternate
energy processes and services. In 1994, he founded and served as Chairman,
President and CEO of Convergence.com from 1992 to 1990, which managed high-speed
cable modem broadband Internet access over cable systems throughout the
world.  Mr. Ames has served on the board of directors of The Good
Company.com, an internet e-commerce companysince2006.Mr. Ames is a
member of ACORE (American Council on Renewable Energy) and the ACORE CEO
Council. Mr. Ames also serves on the Board of Trustees of Ithaca College and is
a member of the Park School of Communications National Advisory Board. In 2004,
he established the David R. Ames Film Fund at the college to provide funds
annually for student film projects in cinema and photography. He is also a
member of the College President’s Associates.


34


Edward
Szofer has been a director of the Company since March 9, 2010. Mr. Szofer
is currently the President/CEO of Seneca Global Inc. He has held various board
positions at multi-national companies, both public and private, including
Executive Price President of Alliance Consulting, Inc. from 2003-2005,
President/CEO of Devine, Inc. from 2001 to 2003.  Mr. Szofer has also
served as the Chief Development Officer for marchFIRST from 2000 to 2001 and
President/Chief Operating Officer of Whitman-Hart from 1997-200. In these roles
he has worked for companies from start-ups to corporations with valuations of
over $4.0 billion in market cap. Mr. Szofer also has experience in
organizational growth, P&L responsibility and operational management. His
background also entails knowledge relating to mergers and acquisitions, as well
as joint ventures and strategic alliance agreements.




Paul J.
Sweeney has been a director of the Company since August 13, 2008. From
February 2007 to the present Mr. Sweeney has been a financial advisor acting as
a principal in Paul Sweeney Financial Services. From 2002 until February 2007
Mr. Sweeney was an Investment Manager with the Bank of Ireland. Prior thereto,
from 1990 to 2002 Mr. Sweeney was a bank manager for National Irish Bank. Mr.
Sweeney has a Diploma in Financial Services and a B.A. in Finance. Mr. Sweeney
received the Investor Manager of the Year Award in 2006.





(b)  Significant
Employees.





As of the date hereof, the Company has
no significant employees.





(c)  Family
Relationships.





There are no family relationships among
directors, executive officers, or persons nominated or chosen by the issuer to
become directors or executive officers.




(d)   Involvement
in Certain Legal Proceedings.




To our knowledge, there have been no
events, during the past ten years, under any bankruptcy act, no criminal
proceedings and no judgments, injunctions, orders or decrees material to the
evaluation of the ability and integrity of any director, executive officer,
promoter or control person of the Company during the past five
years.




Compliance
with Section 16(a) of the Exchange Act




Section 16(a) of the Exchange Act
requires the Company’s directors and officers, and persons who beneficially own
more than 10% of a registered class of the Company’s equity securities, to file
reports of beneficial ownership and changes in beneficial ownership of the
Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and
greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.  To the
Company's knowledge, all of the Company's executive officers, directors and
greater than 10% beneficial owners of its Common Stock have complied with
Section 16(a) filing requirements applicable to them during the Company's most
recent fiscal year.




Code
of Ethics




On May 19, 2008, we adopted a Code of
Ethics that applies to all senior financial officers of the Company, including,
but not limited to, the President, the Chief Executive Officer, the Treasurer,
the Chief Financial Officer, the Chief Accounting Officer, the Controller,
Assistant Treasurers, Assistant Controllers, the Vice-President Finance, and
other designated Finance Employees, and that recognizes their personal
responsibility for full, fair, accurate, timely and understandable reporting of
the financial condition of the Company.  On May 19, 2008, we also
adopted a Code of Conduct and a Whistleblower Policy.  On July 2008,
we adopted a Disclosure Policy intended to provide for procedures for the
disclosure of information in accordance with Regulation FD and limiting the
inadvertent disclosure of potentially “inside information.”


35


The text of the Code of Ethics, the
Code of Conduct, the Whistleblower Policy and the Disclosure Policy are posted
and available on our website at www.globalresourcecorp.com/investor-relations/corporate-governance.





Nominating
Committee





We have not adopted any procedures by
which security holders may recommend nominees to our Board of
Directors.





Audit
Committee





Effective May 21, 2008, the Board of
Directors of the Company established an Audit Committee for the purpose of
overseeing the accounting and financial reporting processes of the Company and
audits of its financial statements.  As of the date of the filing of this
Annual Report, the members of the Audit Committee are Ken Kinsella and Edward
Szofer. The company is not a "listed company" under SEC rules and therefore its
audit committee is not required to be comprised of only independent directors.
Ken Kinsella is not an independent member but Edward Szofer is an independent
member.  The audit committee does not include an independent director
who is an "audit committee financial expert" within the meaning of the rules and
regulations of the SEC. The board has determined, however, that the members of
the audit committee are able to read and understand fundamental financial
statements and have substantial business experience that results in that
member's financial sophistication. Accordingly, the board believes that the
members of the audit committee have the sufficient knowledge and experience
necessary to fulfill their duties and obligations required to serve on the audit
committee.





Compensation
Committee





The Board of Directors performs the
functions of a compensation committee.





Item
11. Executive Compensation.





Summary Compensation
Table





The
following table sets forth the cash and non-cash compensation for each of our
last two fiscal years awarded to, earned by or paid to (i) each individual
serving as our chief executive officer during the fiscal year ended December 31,
2009 and 2008, (ii) the most highly compensated individuals other than the chief
executive officer that served as an executive officer at the conclusion of the
fiscal years ended December 31, 2009 and 2008 and who received total
compensation in excess of $100,000 during such fiscal year and (iii) the most
highly compensated individuals that did not serve as an executive officer at the
conclusion of the fiscal years ended December 31, 2009 and 2008 but who received
total compensation in excess of $100,000 during such fiscal year (collectively,
the “named executive officers”):


36




Name and
                                          Principal
                                          Position
                                        
                                        Year
                                        
                                        Salary
                                          ($)
                                        
                                        
                                        Bonus
                                          ($)
                                          (2)
                                        
                                        
                                        Stock
                                          Award
                                          ($) (1)
                                        
                                        
                                        Option Awards
                                          ($)(1)
                                        
                                        
                                        Non-equity
                                          Incentive
                                          Plan
                                          Compensation
                                          ($)
                                        
                                        
                                        Nonqualified
                                          Deferred
                                          Compensation
                                          Contributions
                                        
                                        
                                        All
                                          Other
                                          Compensation
                                          ($)(3)
                                        
                                        
                                        Total
                                          ($)Kenneth
      Kinsella
                                        
                                        2009
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        62,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        62,000
                                        (4)Chief
      Executive Officer
                                        
                                        2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Peter
      A. Worthington
                                        
                                        2009
                                        
                                        
                                        45,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        93,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        138,000Former
      Chief Executive Officer
                                        
                                        2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Eric
      Swain
                                        
                                        2009
                                        
                                        $
                                        230,416
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        1,134,000
                                        
                                        
                                        $
                                        2,098,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        61,998
                                        
                                        
                                        $
                                        3,524,404Former
      Chief Executive Officer
                                        
                                        2008
                                        
                                        $
                                        133,125
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        1,040,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        17,760
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        1,190,885Brian
      Ettinger
                                        
                                        2009
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        87,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        87,000Chairman
      of the Board
                                        
                                        2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Jeffrey
      J. Andrews
                                        
                                        2009
                                        
                                        $
                                        162,817
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        $
                                        9,485
                                        
                                        
                                        
                                        172,302Chief
      Financial Officer, Secretary and Treasurer
                                        
                                        2008
                                        
                                        $
                                        166,256
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (a)
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        9,948
                                        
                                        
                                        $
                                        175,754Jeffrey
      T. Kimberly
                                        
                                        2009
                                        
                                        $
                                        267,333
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        17,628Former
      President and Chief Operating Officer
                                        
                                        2008
                                        
                                        $
                                        193,750
                                        
                                        
                                        $
                                        100,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (a)
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        7,800
                                        
                                        
                                        $
                                        301,550Wayne
      J. Koehl
                                        
                                        2009
                                        
                                        $
                                        191,093
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        20,613
                                        
                                        
                                        $
                                        211,706Former
      [Chief Operating Officer] and Executive Vice President
                                        
                                        2008
                                        
                                        $
                                        135,729
                                        
                                        
                                        $
                                        100,000
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (a)
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        3,500
                                        
                                        
                                        $
                                        239,229





(1)
Amounts are calculated based on provisions of ASC 718-10, Stock
Compensation.  See note 11 of the consolidated financial
statements of the Company's Annual Report on Form 10-K for the year ended
December 31, 2009 regarding assumptions underlying valuation of equity
awards.





(a)The
Company has authorized options in September 2008 and December of 2009 but no
expense was recorded in fiscal years 2008 and 2009 because the options are
subject to share holder approval of an amendment to the Company's stock option
plan increasing the number of authorized options shares available for issuance
under the plan.  See note 11 of the consolidated financial
statements.





(2) The
amounts represent executive hiring signing bonuses.





(3)The
amounts include reimbursement during the fiscal year paid on behalf of the
executive officer for (i) car allowance, (ii) life insurance premiums and (iii)
interest paid from a loan.





(4) Ken
Kinsella was engaged as the Company’s Chief Executive Officer (“CEO”) on
November 11, 2009.  Represents  one months expense for three
months of options derived from an aggregate of 3,000,000 options authorized for
issuance to Mr. Kinsella on December 15, 2009. Such options were subsequently
cancelled in November of 2010. Mr. Kinsella’s compensation package, beginning on
January 1, 2010 is described under the heading Employment Agreements
below.


37


Employment
Agreements





On
December 15, 2009, the Board of Directors approved a compensation package for
its Chief Executive Officer, then Chairman of the Board and certain board
members. The compensation package to Mr. Kinsella is contingent upon the Company
achieving certain financial and operation milestones and is not effective until
the Company reaches the predetermined milestones.  Milestone 1 is
defined as the Company raising $2.0 million dollars of capital infusion and
entering into a business agreement for the purchase of a 1 ton production
microwave unit machine (“Milestone 1”).  Milestone 2 is reached when
the Company has raised $5.0 million dollars of capital infusion (inclusive of
the $2.0 million capital infusion obtained when reaching Milestone 1) and enters
into a business agreement for the purchase of three 1 ton production microwave
unit machines or one 3 ton production microwave unit machine. As of December 31,
2009, the Company had not achieved any of the milestone levels.





Ken
Kinsella





The
compensation package approved by the Board for Mr. Kinsella provides that, upon
achieving Milestone 1, Mr. Kinsella will receive (i) cash compensation equal to
$273,000, which shall include (a) a salary of $20,000 a month (b) a car
allowance equal to $900 per month and (3) a living allowance of $1,000 per
month, (ii) 300,000 restricted shares of the Company’s common stock, subject to
Rule 144, to be issued 25,000 monthly and (iii) Mr. Kinsella is eligible to
receive health insurance coverage provided by the company. If Mr. Kinsella is
terminated as CEO without cause, he will be entitled to an additional 2.0
million options valued at the share price on the termination date.  If
the Company reaches Milestone 2, the Board may award Mr. Kinsella additional
compensation at its discretion.





Upon
reaching Milestone 2, Mr. Kinsella shall receive total cash compensation equal
to $324,000 a year, which shall include (a) a salary of $25,000 a month and (b)
a living allowance equal to $2,000.00 per month; (ii) 200,000 restricted shares
of the Company’s common stock, subject to Rule 144, to be issued quarterly at a
price per share to be determined on the last trading day of the quarter
beginning six months after Milestone 2 is achieved (where the average stock
price remains above $1.50 for three consecutive months, then Mr. Kinsella will
receive 200,000 shares of restricted common stock subject to Rule 144 each
quarter); (iii) 500,000 stock options each quarter with an exercise price per
share to be determined on the last trading day of the quarter, if the average
stock price remains above $1.50 for three consecutive months. 4. Mr. Kinsella
will receive a bonus based on joint ventures, and/or strategic alliances entered
into with the company equal to 3% of the profit before taxes of the Company’s
interest in any joint venture after said venture becomes
operational.  If the company is sold for over $100,000,000 (not a
hostile takeover) during Mr. Kinsella’s tenure as CEO, he will receive an
additional bonus of 5% of the net proceeds from sale of the
company.





Until Milestone 1 has been obtained,
Mr. Kinsella shall receive a salary equal to $12,000 per month, a car allowance
of approximately $900 per month, and a living allowance of approximately $1,000
per month for total compensation of approximately $167,000, per year plus
3,000,000 options to purchase the Company’s common stock at the current share
price on the date issued which are immediately exercisable during the next 36
months. Such options were subsequently cancelled. He is eligible to receive
health insurance coverage provided by the company.  In the event, that Mr. Kinsella is
terminated without cause, he is entitled to an additional 2,000,000 stock
options valued at the price per share in effect on the date of termination, in
addition to the success based compensation described above.




Peter
Worthington




Peter Worthington was engaged to
serve as the Company’s CEO and interim Chairman of the Board on July 6, 2009. He
served as a director from August 13th 2008
through November 11, 2009. On November 11, 2009, Mr. Worthington resigned as
CEO, member of the Board and Chairman of the Board. On December 15, 2009, the
Board approved the issuance of 200,000 fully vested options to purchase shares
of the Company’s common stock at a price of $.40 per share, to expire three
years from the date of issuance for Mr. Worthington’s efforts as interim
Chairman of the Board and CEO.  The Board also determined that Mr.
Worthington was owed $45,000 as salary compensation which shall be paid upon the
Company reaching Milestone 1 or having $5.0 million dollars of capital infusion
available. Mr. Worthington received reimbursement for living and travel
expenses.


38


Eric
Swain





Eric
Swain was appointed to serve as the Chief Executive Officer of the Company by
the Board on September 24, 2008.  In connection with the appointment,
the Board of Directors approved a summary of terms of proposed employment
agreement (the “Summary of Terms”) to be entered into between the Company and
Mr. Swain.  The Summary of Terms provided, among other
things, (i) for an employment term of five years at an annual salary of
$450,000 from the date of the execution of the employment agreement through
December 31, 2009, with an increase to $525,000 on January 1, 2010 if the
Company reaches at least one sales goal as defined in the Summary of Terms and
(ii) an option to purchase five million (5,000,000) shares of Common Stock,
exercisable at $1.18 per share, of which, options for one million (1,000,000)
shares of Common Stock vested immediately and options for one million
(1,000,000) shares of Common Stock were to vest on each of September 23, 2009,
September 23, 2010, September 23, 2011 and September 23, 2012, provided that Mr.
Swain was still employed on the relevant vesting date, exercisable from and
after their respective vesting date for a period of fifteen (15) years
thereafter.  Mr. Swain was also entitled to receive bonuses, payable in the
form of Common Stock or options to purchase Common Stock equal to 0.75% of the
Company's gross profits on each sale of equipment over $25,000,000. Mr. Swain
received a monthly automobile allowance of $900. Mr. Swain's employment with the
Company was terminated for cause effective July 6, 2009.





On
October 2, 2009, the Company entered into a Settlement Agreement and Release
with Mr. Swain (the “Swain Severance Agreement”).  The Swain Severance
Agreement replaced the prior terms of employment that the Company had with
Mr. Swain.  Pursuant to the terms of the Swain Severance Agreement, in
material part, (a) the Company and Mr. Swain agreed to mutual general releases;
(b) Mr. Swain agreed, for a two year period, not to compete in the business of
microwave resource recovery technology and not to solicit the Company’s
employees or customers; (c) of the options to purchase 5,000,000 shares of the
Company’s common stock at an exercise price of $1.18 per share previously
granted to Mr. Swain, Mr. Swain retained 1,000,000 that previously vested,
1,000,000 that vested on December 1, 2009 and 1,000,000 that will vest on
December 1, 2010, the remaining 2,000,000 being cancelled; (d) the Company
agreed, subject to Mr. Swain’s continued compliance with the terms of the Swain
Settlement Agreement, (i) to pay to Mr. Swain certain bonuses, if earned,
payable to him under the prior terms of his employment through January 6, 2011,
and (ii) to issue to Mr. Swain an aggregate of 2,250,000 shares of its common
stock on certain dates starting on October 6, 2009 and ending on October 6,
2011, of which 1,800,000 shares were to be shares registered under the
Securities Act of 1933 pursuant to an effective registration statement on Form
S-8 filed on January 29, 2008 (“S-8 Shares”); (e) Mr. Swain agreed not to sell
more than 35,000 S-8 shares during any calendar week; (f) the Company continued
to provide full health insurance benefits to Mr. Swain through July 5,
2010;  and (g) the Company also transferred the title of the company’s
car then in Mr. Swain’s possession to Mr. Swain.





The Swain
Severance Agreement was amended on January 26, 2010, to provide that the
remaining 1.2 million S-8 Shares issuable in connection with the Severance
Agreement on future dates in 2010 and 2011 would be replaced by issuing 1.4
million shares of its restricted common stock on January 27, 2010.





Brian
Ettinger





Brian
Ettinger was appointed to serve as the Company’s Chairman of the Board on
November 11, 2009 and resigned as Chairman of the Board on July 16,
2010.   Prior to Mr. Ettinger’s resignation, the following
compensation to Mr. Ettinger was approved by the Board. Upon accepting the
chairmanship Mr. Ettinger received a compensation package equal to 150,000
restricted shares of Common Stock.  When the Company reached Milestone
1, Mr. Ettinger would serve as the Company’s in house legal counsel with a
$10,000 a month legal retainer.  Additionally, $3,000 per month for
office expenses was approved to be paid for the Houston, Texas legal office. Mr
Ettinger was entitled to receive (i) 100,000 shares of Common Stock each
quarter, to be increased to 200,000 shares of common stock per quarter if the
average stock price remains above $1.50 per share for three consecutive months
and (ii) an option to purchase 100,000 shares of Common Stock each quarter, to
be increased to an option to purchase 200,000 shares of Common Stock each
quarter if the average stock price remains above $1.50 per share for three
consecutive months.  Additionally, Mr. Ettinger was entitled to
receive a bonus of 1.5% of the profit before taxes for any joint ventures and/or
strategic alliances that the Company may enter into when the venture becomes
operational.  In the event, the Company was sold for over $100,000,000
(not including a hostile takeover) during Mr. Ettinger’s tenure as Chairman of
the Board, he would have received a bonus equal to 1.5% of the  net
proceeds from the sale of the Company.


39


In connection with Mr. Ettinger’s
resignation all prior employment and/or consulting agreements with Mr. Ettinger
were terminated and the Company entered into a new consulting agreement with Mr.
Ettinger, the terms of which are described below in transactions with related
parties. Mr. Ettinger also agreed to waive his right to receive 500,000 shares
of the Company’s Common Stock and options to purchase an aggregate of 1,000,000
shares of the Company’s Common Stock approved by the Company’s Board of
Directors in December of 2009, as well as any other additional compensation
benefits that Mr. Ettinger may have been entitled to upon the Company reaching
certain milestones.





Jeffrey
Andrews





Jeff Andrews was engaged to serve as
the Company’s Chief Financial Officer, pursuant to an Employment Agreement with
the Company dated September 26, 2008 (the “Employment Agreement”).  On
February 9, 2010, the Company entered into a consulting services agreement with
Mr. Andrews, replacing the Employment Agreement with Mr. Andrews, pursuant to
which he would no longer be considered an employee of the Company, effective
February 1, 2010 (the “Andrews Consulting Agreement”). The terms of the
Consulting Agreement provide that Mr. Andrews’ consulting services include
serving as the Company’s CFO, Treasurer and SEC Compliance Officer and other
tasks as requested by the Company’s CEO.  Pursuant to the Consulting
Services Agreement, the Company acknowledged and agreed that $204,485 is due to
Mr. Andrews  as a result of the severance provisions of the Employment
Agreement and consequently agreed to (i) pay to Mr. Andrews $120,000 in cash
over a twelve month period divided equally into 24 payments payable twice per
month and (ii) issue such number of shares of the Company’s Common Stock
issuable pursuant to the Company’sForm S-8 filed on January 29, 2008valued at $84,845, divided into 24 issuances contemporaneous with the
cash payments described above.  Such shares would be issued pursuant
to the Company valued at a 10% discount to the public market price of a share of
the Company’s Common Stock (the “Market Price”) at the time of each
issuance.





The Consulting Services Agreement
terminates on January 31, 2011, but may be extended by mutual agreement of both
parties for another twelve month term.  The Consulting Services
Agreement may also be terminated at any time after six months by either party
for any reason upon thirty days’ notice to the other party.  However,
in the event of such termination by the Company, then the payments and
issuances  remaining to be made to Mr. Andrews shall be immediately
made, except that 25% of the total remaining value shall be paid in cash and the
remainder paid in S-8 Shares valued at a 10% discount to the market price at the
time of issuance.





Further, pursuant to the Consulting
Services Agreement, stock options to purchase 1,000,000 shares of the Company’s
Common Stock previously granted to Mr. Andrews exercisable at $1.18 per share,
of which the option to purchase 400,000 shares had already vested, subject to
stockholder approval of an amendment to the plan pursuant to which they were
issued, was replaced with a warrant to purchase 1,000,000 shares of the
Company’s Common Stock at $1.18 per share, of which 400,000 is immediately
exercisable and the remainder of which is exercisable on January 31, 2011,
except that the Warrant will become immediately exercisable in full in the event
that the Company terminates the Consulting Services Agreement at any time or Mr.
Andrews terminates the Consulting Services Agreement after six
months.  The Warrant expires on January 31, 2013.





In addition, the Company acknowledged
that it owed Andrews $139,000 for past services performed by Mr. Andrews outside
the scope of his employment with the Company and consequently agreed with Mr.
Andrews to issue to Mr. Andrews (i) 250,000 shares of Common Stock issuable in
connection with the Company’s Form S-8 filed on January 29, 2008 and (ii)
250,000 shares of its Common Stock not registered under the Securities Act,
which shares were issued February 2, 2010 and February 5, 2010,
respectively.


40


On September 21, 2010 the Consulting
Services Agreement by and between the Company and Jeff Andrews was terminated.
In connection with the termination consulting arrangement, Mr. Andrews accepted
$2,700 and 347,826 S-8 Shares.





Jeffrey T.
Kimberly





Mr.
Kimberly, the former President and Chief Operating Officer, initially was
employed pursuant to a term sheet executed on November 4, 2007.  Mr.
Kimberly’s employment commenced on February 11, 2008 for a term of five years.
The Company paid Mr. Kimberly a signing bonus equal to $100,000 in connection
with his execution of the term sheet.  Initially, Mr. Kimberly
received a base salary of $200,000 per annum which was increased to $225,000 on
August 11, 2008, the sixth month anniversary of his start date. Mr. Kimberly was
eligible to receive a yearly performance bonus to be paid in shares of Common
Stock issued under the Company 2008 Employees Compensation Plan in accordance
with the following schedule: (a) up to 50,000 shares for fiscal 2008; (b) up to
40,000 shares for fiscal 2009; (c) up to 35,000 shares for fiscal 2010; (d) up
to 35,000 shares for fiscal 2011; and (e) up to 35,000 shares for fiscal
2012.  The number of shares to be issued for each fiscal year bonus
and the performance criteria for such bonus was to be established by our Board
of Directors. On September 23, 2008, the Company and Mr. Kimberly entered into a
new employment agreement, and as part of the new arrangement, the bonus plan was
eliminated.





On
September 23, 2008, we entered into a new five year employment term sheet
agreement with Mr. Kimberly, pursuant to which Mr. Kimberly's salary was
increased to $300,000 per annum effective January 1, 2009, to increase to
$375,000 per annum starting January 1, 2010 if the Company received (i) orders
for 6 of our machines or (ii) orders for a minimum purchase value of $24,000,000
(the "Milestone"). Mr. Kimberly was awarded options to purchase 1,500,000 shares
of our common stock at $1.18 per share which will vest in equal installments of
300,000 with the first 300,000 vesting immediately upon approval of the
amendment of the Company’s stock option plan authorizing an increase in the
number of options available for issuance under the plan and an additional
300,000 vesting on September 23, 2009 and on each anniversary thereafter for the
next three years. Each installment of options will be exercisable for 10 years
from the respective vesting dates.





During
the two year period commencing February 11, 2008, we made monthly car payments
to Mr. Kimberly in the amount of $509.88. At the end of the two year period, the
Company was required to pay to Mr. Kimberly an amount equal to (a) the balance
of his auto loan for his current automobile and (b) the amounts paid for such
auto loan by Mr. Kimberly prior to February 11, 2008. The Company also paid Mr.
Kimberly a relocation package which consisted of (i) the cost of a moving
company to pack and move Mr. Kimberly's household to New Jersey, (ii) temporary
housing costs until he acquires a home in New Jersey and (iii) certain traveling
expenses. Mr. Kimberly was provided with medical, dental, group life and long
term disability insurance.





On March 25, 2010, the Company
terminated Mr. Kimberly from employment with the Company. Mr. Kimberly has sued
the Company, Brian Ettinger and Ken Kinsella claiming certain amounts In April
2010, Mr. Jeff Kimberly, the Company’s former President, filed a lawsuit against
the Company, Brian Ettinger and Ken Kinsella, the Company’s former Chairman of
the board and Chief Executive Officer, respectively, for wrongful termination of
his employment contract. Mr. Kimberly is asking for the remaining salary and
stock options due him under his employment contract dated September 23, 2008.
The Company is currently in settlement negotiations with Mr.
Kimberly.





Wayne J.
Koehl





Mr.
Koehl, the Company’s Chief Operating Officer from May 15, 2008 through April 17,
2009. The initial term of employment was five years. Initially Mr. Koehl
received a base salary of $160,000 per annum which was increased to $200,000 on
November 5, 2008. Mr. Koehl also participated in the Company's benefit plans and
received an automobile allowance. The Company paid Mr. Koehl a bonus of 100,000
shares of our Common Stock at the time of commencement of his employment which
the Company repurchased for $100,000 from Mr. Koehl as part of a new employment
agreement entered into between the Company and Mr. Koehl on September 23,
2008.


41


On September 23, 2008 we entered into a
five year employment term sheet agreement (the “Employment Agreement”) with Mr.
Koehl as follows: Mr. Koehl's salary was to be increased to $225,000 per annum
effective January 1, 2009 and further increased to $250,000 per annum upon the
first to occur of (i) our receipt of orders for 6 of our machines or (ii) orders
for a minimum purchase value of $24,000,000 (the
"Milestone").  Pursuant to the employment agreement, Mr. Koehl was
also to be entitled to receive a bonus of between 0.75% and 1.0% of our
estimated profits, payable in a combination of our common stock and cash
determined in our discretion, from all revenues we receive for orders exceeding
the Milestone.  Mr. Koehl was also awarded options to purchase
1,000,000 shares of our common stock at $1.18 per share to vest in equal
installments of 200,000, with the first 200,000 vesting immediately upon
approval of the amendment of the Company’s stock option plan authorizing an
increase in the number of options available for issuance under the plan and an
additional 200,000 vesting on September 23, 2009 and on each anniversary
thereafter for the next three years, provided Mr. Koehl was employed by the
Company at each such anniversary. Each installment of options was to be
exercisable for 10 years from the respective vesting dates.  Further,
pursuant to the Employment Agreement, Mr. Koehl was provided with medical,
dental, group life and long term disability insurance and we paid the premium
for a $2,000,000 term life insurance policy for Mr. Koehl.  Pursuant
to the Employment Agreement, if Mr. Koehl was to resign voluntarily during the 5
year term, then we were to pay him only the salary and Milestone bonus earned to
the date of resignation, and he would retain only the options that have vested
to that date. If we were to: (i) relocate to a geographic area unacceptable to
Mr. Koehl, (ii) eliminate his position as a result of our sale, reorganization
or restructuring, (iii) cease to exist as the Company or (iv) terminate the
agreement before the end of the 5 year term, then: (i) we were to pay Mr. Koehl
his then current salary and benefits until the first to occur of (x) 1 year from
termination or (y) his acceptance of another position of employment, (ii) all
remaining options were to vest immediately and (iii) all earned Milestone
bonuses were to be paid in full.





Mr. Koehl retired on April 17, 2009 and
the Company and Mr. Koehl entered into an agreement and general release dated on
or about May 9, 2009. The Company agreed (a) to pay to Koehl a salary for a
period of six (6) months and two (2) weeks from April 17, 2009 (the
“Compensation Period”) (b) to pay to Koehl any bonuses that would have been
payable to Koehl pursuant to his employment letter with the Company dated
September 23, 2008 (the “Employment Letter”) based upon sales made by the
Company solely to Biofuels, Inc. as if Koehl had remained in the employment of
the Company at the time of such sales; (bonuses would not be paid on sales made
other than to Biofuels, Inc.) (c) if the Company properly and timely elects to
continue medical coverage under Company’s current health care benefits plan in
accordance with the continuation requirements of COBRA, the Company shall pay
for the cost of the premium for such coverage for a period of six (6) months and
two (2) weeks beginning on the last day of employment. Thereafter, Koehl shall
be entitled to elect to continue such COBRA coverage for the remainder of the
COBRA period, at Koehl’s own expense, subject to the provisions of the American
Recovery and Reinvestment Act of 2009; and (d) that Koehl shall be entitled to
retain options to purchase 200,000 shares of Common Stock and options to
purchase an additional 200,000 shares of Common Stock previously granted to him
and which were to vest on September 23, 2009 but which shall now be immediately
vested; provided, however, that the
grant of all such options remains subject to the approval of the
stockholders in accordance with the terms of the original grant thereof and such
options may not be exercised prior to such approval being obtained. 600,000
options were forfeited.





Furthermore, Koehl acknowledged that
during the course of his employment with the Company, he has become familiar
with the Company's trade secrets and other confidential information and Koehl
agreed that during the Compensation Period and for a six (6) month period
thereafter (the "Non-Compete
Period"), Koehl
could not directly or indirectly own any interest in, manage, control,
participate in, consult, with, render services for, or in any manner engage in
any business involved in the business of the Company conducted or contemplated
to be conducted by the Company during the period of Keohl's employment within
any geographical area in which the Company engaged in such business or planned
to engage in during the period of Koehl's employment. Nothing therein, however,
was to prohibit Koehl from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded, so
long as Koehl  has no active participation in the business of such
corporation.


42


During
the Non-Compete Period, Koehl shall not, directly or indirectly through another
person or entity, (i) induce or attempt to induce any employee of the Company to
leave the employ of the Company, or in any way interfere with the relationship
between the Company and any employee thereof, (ii) hire any person who was an
employee of the Company at any time during the period of Koehl 's employment
with the Company, or (iii) induce or attempt to induce any client, customer,
supplier or other business relation of the Company to cease doing business with
the Company or in any way interfere with the relationship between any such
client, customer, supplier or business relation and the Company.





Outstanding Equity Awards at
Fiscal Year End





The
following table sets forth information with respect to equity awards outstanding
at the conclusion of the fiscal year ended December 31, 2009 for each of the
named executive officers:





Name and
                    Principal
                    Position
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Options
                    (Exercisable)
                  
                  
                  Number of
                    Securities
                    Underlying
                    Unexercised
                    Options
                    (Unexercisable)
                  
                  
                  Equity
                    Incentive
                    Plan Awards;
                    Number of
                    Securities
                    Underlying
                    Unexercised
                    Unearned
                    Options
                  
                  
                  Option
                    Exercise
                    Price
                  
                  Option
                    Expiration
                    Date
                  
                  Number of
                    Shares or
                    Units of
                    Stock that
                    have not
                    vested
                  
                  
                  Market
                    Value of
                    Shares
                    of Units
                    of Stock
                    that
                    have not
                    vested
                  
                  
                  Equity
                    Incentive
                    Plan
                    Awards;
                    Number of
                    Unearned
                    Shares,
                    Units or
                    other
                    rights that
                    have not
                    vested
                  
                  
                  Equity
                    Incentive
                    Plan
                    Awards;
                    Market or
                    Payout
                    value of
                    Unearned
                    Shares,
                    Units or
                    other
                    rights that
                    have not
                    vestedKenneth
      Kinsella
                    Chief
      Executive Officer
                  
                  
                  3,000,000
                  
                  
                  
                  -
                  
                  
                  
                  0
                  
                  
                  $
                  0.58/share
                  
                  12/15/2012
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Peter
      A. Worthington
                    Former
      Chief Executive Officer
                  
                  
                  200,000
                  (1)
                  
                  
                  -
                  
                  
                  
                  0
                  
                  
                  $
                  0.40
                  
                  4/7/2013
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Eric
      Swain (a)
                    Former
      Chief Executive Officer
                  
                  
                  2,000,000
                  
                  
                  
                  1,000,000
                  
                  
                  
                  0
                  
                  
                  $
                  1.18
                  
                  9/23/2025
                  
                  
                  0
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Jeffrey
      J. Andrews (b)(e)
                    Chief
      Financial Officer, Secretary and Treasurer
                  
                  
                  400,000
                  
                  
                  
                  600,000
                  
                  
                  
                  0
                  
                  
                  $
                  1.18
                  
                  9/23/2027
                  
                  
                  0
                  
                  
                  $
                  -
                  
                  
                  
                  0
                  
                  
                  $
                  -Jeffrey
      T. Kimberly
                    (c)(e)
                    Former
      President and Chief Operating Officer
                  
                  
                  300,000
                  
                  
                  
                  1,200,000
                  
                  
                  
                  0
                  
                  
                  $
                  1.18
                  
                  9/23/2028
                  
                  
                  0
                  
                  
                  $
                  -
                  
                  
                  
                  0
                  
                  
                  $
                  -Wayne
      J. Koehl (d)(e)
                    Former
      Chief Operating Officer  and Executive Vice
      President
                  
                  
                  400,000
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  $
                  1.18
                  
                  9/23/2027
                  
                  
                  0
                  
                  
                  $
                  -
                  
                  
                  
                  0
                  
                  
                  $
                  -




43


(a)
            Ken
      Kinsella was engaged as the Company’s Chief Executive Officer (“CEO”) on
      November 11, 2009.  On December 15, 2009 the Board approved the
      issuance of 3,000,000 options to Mr. Kinsella vesting immediately upon
      issuance at the current share price on the date issued, to expire within
      three years of issuance. Such options were cancelled in November of
      2010.


(b)
            On
      September 23, 2008, Mr. Swain was awarded options to purchase 5,000,000
      shares of our common stock at an exercise price of $1.18 per share, with
      1,000,0000 options vesting immediately and the balance vesting in equal
      annual installments of 1,000,000 beginning on September 23, 2009 and on
      each anniversary thereof for three years thereafter, provided that Mr.
      Swain is employed by the Company at each vesting date.  Each option
      is exercisable for 15 years from the respective vesting dates.  Mr.
      Swain's employment with the Company was terminated effective on July 6,
      2009.  On October 2, 2009, the Company entered into a Settlement
      Agreement and Release with Mr. Swain, pursuant to which of the options to
      purchase 5,000,000 shares of our common stock previously granted to Mr.
      Swain, Mr. Swain retained 1,000,000 that previously vested, 1,000,000 that
      vested on December 1, 2009 and 1,000,000 that will vest on December 1,
      2010, the remaining 2,000,000 being
cancelled.


(c)
            On
      September 23, 2008, Mr. Andrews was awarded options to purchase 1,000,000
      shares of our common stock at $1.18 per share, with 200,000 of those
      options vesting immediately upon approval of the amendment of the
      Company’s stock option plan authorizing an increase in the number of
      options available for issuance under the plan and the balance vesting in
      equal annual installments of 200,000 beginning on September 23, 2009 and
      on each anniversary thereof for three years thereafter, provided that Mr.
      Andrews is employed by the Company at each vesting date.  Each
      option is exercisable for 15 years from the respective vesting
      dates.


(d)
            On
      September 23, 2008, Mr. Kimberly was awarded options to purchase 1,500,000
      shares of our common stock at $1.18 per share, with 300,000 of those
      options vesting immediately upon approval of the amendment of the
      Company’s stock option plan authorizing an increase in the number of
      options available for issuance under the plan and the balance vesting in
      equal annual installments of 200,000 beginning on September 23, 2009 and
      on each anniversary thereof for three years thereafter, provided that Mr.
      Kimberly is employed by the Company at each vesting date.  Each
      option is exercisable for 15 years from the respective vesting
      dates.


(e)
            On
      September 23, 2008, Mr. Koehl was awarded options to purchase 1,000,000
      shares of our common stock at $1.18 per share, with 200,000 of those
      options vesting immediately upon approval of the amendment of the
      Company’s stock option plan authorizing an increase in the number of
      options available for issuance under the plan and the balance vesting in
      equal annual installments of 200,000 beginning on September 23, 2009 and
      on each anniversary thereof for three years thereafter, provided that Mr.
      Koehl is employed by the Company at each vesting date.  Each
      option is exercisable for 15 years from the respective vesting
      dates.  On April 23, 2009, upon Mr. Koehl’s retirement from the
      Company, the Company agreed that an additional 200,000 options were vested
      (upon approval of an increase in the number of options available for
      issuance under the plan) and the remaining 600,000 options were
      forfeited.


(f)
            The
      Company authorized options in September 2008 where no expense was recorded
      in fiscal year 2008 because the options are subject to shareholder
      approval of an amendment to the Company's stock option plan increasing the
      number of authorized options shares available for issuance under the
      plan.  See Note 11 of the consolidated financial statements for
      details.





Director Compensation
Table





Effective
September 23, 2008, our directors are awarded warrants to purchase 5,000 shares
of our common stock for each board meeting attended.  The exercise
price of the warrants are set at the closing price of the Company’s Common Stock
on the day of the meeting and each warrant expires five years from the date of
issuance.





The
directors also receive $200 per meeting and reimbursement for travel
expenses.


44


On
December 15, 2009, the Board approved a change to compensation awarded to its
board members effective on the date that the Company achieves Milestone 2, to
the following: (i) the Chairman of the Board will receive $50,000 in cash based
on approximately 20 days full time work per year comprising Board and
shareholders meetings and general interaction with the CEO, executive team,
other directors and Company shareholders; (ii) Board members will receive
$25,000 in cash based on approximately 10 days full time work per year
comprising Board and shareholders meetings and general interaction with CEO,
executive team, other directors and Company shareholders; (iii) if a Board
member is a committee chairman will receive $3,000 per meeting held as per
charter and if a Board member is a member of a committee will receive $2,500 per
meeting as per charter;  (iv) for all Board members reasonable
expenses will be reimbursed as approved by nominations and compensation
committee.  (v) Board member will be entitled to receive a bonus of
1.5% of the profit before taxes for any joint ventures and/or strategic
alliances the Company enters into when the venture becomes operational for five
years; (vi) If the Company is sold for over $100,000,000 (not including a
hostile takeover) during the Board members tenure, the member is entitled to
receive a 1.5% bonus of the net proceeds from the sale of the
Company.





The
following table sets forth the compensation of the directors of the Company for
the fiscal year ended December 31, 2009:




Name
                
                Fees
                  Earned or
                  paid in
                  Cash
                  ($) (1)
                
                
                Stock
                  Awards
                  ($)
                
                
                Warrants
                  Awards
                  ($) (2)
                
                
                Non-equity
                  incentive
                  plan
                  compensation
                  ($)
                
                
                Nonqualified
                  deferred
                  compensation
                  earnings
                  ($)
                
                
                All other
                  compensation
                  ($)
                
                
                Total
                  ($)Kim
      ThorneO'Brien
                
                $
                400
                
                
                $
                166,000
                (1,2)
                
                $
                9,424
                
                
                $
                -
                
                
                $
                -
                
                
                $
                
                
                
                $
                175,824Jonathan
      L. Simon
                
                $
                400
                
                
                $
                166,000
                (1,2)
                
                $
                9,424
                
                
                $
                -
                
                
                $
                -
                
                
                $
                
                
                
                $
                175,824Fredrick
      Clark(3)
                
                $
                400
                
                
                $
                -
                
                
                $
                9,424
                
                
                $
                -
                
                
                $
                -
                
                
                $
                
                
                
                $
                9,824Lincoln
      Jones III(4)
                
                $
                400
                
                
                $
                -
                
                
                $
                9,424
                
                
                $
                -
                
                
                $
                -
                
                
                $
                
                
                
                $
                9,824Peter
      Worthington(5)
                
                $
                200
                
                
                $
                -
                
                
                $
                4,520
                
                
                $
                -
                
                
                $
                -
                
                
                $
                
                
                
                $
                4,720Paul
      J. Sweeney
                
                $
                400
                
                
                $
                -
                
                
                $
                9,424
                
                
                $
                -
                
                
                $
                -
                
                
                $
                
                
                
                $
                9,824Brian
      Ettinger
                  Chairman of the
      Board(7)
                
                $
                -
                
                
                $
                87,000
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                87,000Ken
      Kinsella
                
                $
                -
                
                
                $
                -
                
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -David
      Ames(9)
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Edward
      Szofer(10)
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Paul
      Somerville(11)
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -





(1)
Non-Employee directors receive $200 for attending board meetings.





(2) A
Director received 5,000 warrants for attendance at board meetings during the
fiscal year ended 2009. The dollar amounts are calculated based on
provisions of SFAS, No. 123R, "Share Based Payments" See note 11 of the
consolidated financial statements of the Company's Annual Report on Form 10-K
for the year ended December 31, 2009 regarding assumptions underlying valuation
of equity awards.





(3)
Effective as of March 9, 2010, Mr. Clark no longer serves as a director of the
Company.





(4)
Effective March 9, 2010, Mr. Jones no longer serves as a director of the
Company.





(5)
Effective as of November 11, 2009 Mr. Worthington no longer serves as a director
of the Company.





(6)
Effective as of July 6, 2009, Mr. Swain no longer serves as a director of the
Company.





(7) Mr.
Ettinger was elected as a director on November 11, 2009. He received 150,000
shares of restricted Common Stock upon accepting the position as Chairman of the
Board.


45


(8) Mr.
Kinsella was elected as a director on April 28, 2010 and therefore he did not
receive compensation as a director for the year ended December 31,
2009.





(9) Mr.
Ames was elected as a director on April 28, 2010 and therefore he did not
receive compensation as a director for the year ended December 31,
2009.





(10) Mr.
Szofer was elected as a director on March 9, 2010 and therefore he did not
receive compensation as a director for the year ended December 31,
2009.





(11) Mr.
Somerville was elected as a director on March 9, 2010 and resigned on April 28,
2010, therefore he did not receive compensation as a director for the year ended
December 31, 2009.





(12) Directors
received 200,000 shares of Common Stock as members of the Company's audit
committee.





Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.





(a)           The
following table sets forth, certain information, as
of December  23, 2010, regarding beneficial ownership of our
Common Stock by (i) each stockholder known by us to be the beneficial owner of
more than five percent (5%) of the outstanding shares of our Common Stock, (ii)
each of our directors, (iii) each of the named executive officers and (iv) all
of our current executive officers and directors as a group.  At the
close of business on December  23, 2010, (i) there were81,165,217 shares of our
Common Stock issued and outstanding and (ii) no shares of our Preferred Stock
issued and outstanding.  Unless otherwise noted, we believe that all
persons named in the table have sole voting power and investment power with
respect to all shares beneficially owned by them and the information as to
persons who are not officers or directors of the Company is based upon the
latest information made available to the Company.  Shares of Common
Stock subject to warrants or other instruments currently exercisable or
convertible or exercisable or convertible within 60 days of the date hereof are
deemed outstanding for computing the number of shares beneficially owned and the
percentage of outstanding shares of the class held by a person holding such
warrants or other instruments, but are not deemed outstanding for computing the
percentage of any other person.





Beneficial Owner
                
                Number of Shares
                  Beneficially Owned
                
                
                Percent of ClassKen
      Kinsella(1)
                
                
                10,000
                
                
                
                *Eric
      Swain(2)
                
                
                3,850,000
                
                
                
                4.74
                %Paul
      J. Sweeney(3)
                
                
                9,003,774
                
                
                
                11.09
                %David
      Ames(4)
                
                
                0
                
                
                
                0.0
                %Edward
      Szofer(5)
                
                
                100,000
                
                
                
                *Frank
      G. Pringle(6)
                  109
      Bortons Road
                  Marlton,
      New Jersey 08053
                
                
                8,391,891
                
                
                
                10.34
                %Carbon
      Recovery Corporation Liquidating Trust(7)
                  c/o
      Fox Law Offices, P.A., Trustee
                  131
      Court Street, #11
                  Exeter,
      New Hampshire 03833
                
                
                11,188,996
                
                
                
                13.79
                %Mobilestream
      Oil, Inc. Liquidating Trust(8)
                  c/o
      Fox Law Offices, P.A., Trustee
                  131
      Court Street, #11
                  Exeter,
      New Hampshire 03833
                
                
                11,145,225
                
                
                
                13.73
                %Jeffrey
      J. Andrews (9)
                
                
                1,565,765
                
                
                
                1.93
                %Jeffrey
      J. Kimberly
                
                
                300,005
                
                
                
                *Brian
      Ettinger(10)
                
                
                525,000
                
                
                
                *Peter
      Worthington(11)
                
                
                400,000
                
                
                
                *Wayne
      Koehl(12)
                
                
                0
                
                
                
                *All
      Current Executive Officers and Directors as a Group (4
      persons)
                  (13)
                
                
                9,113,774
                
                
                
                11.23
                %




46


* Less
than 1%.





1. Ken
Kinsella is the Company’s Chief Executive Officer, President and Chairman of the
Board. Includes 10,000 shares of our Common Stock.





2. Eric Swain served as the Company’s
Chief Executive Officer.Includes (i) 1,850,000 outstanding
shares of our Common Stock and (ii) immediately exercisable options to purchase
2,000,000 shares of our Common Stock at an exercise price of $1.18 per share and
expiring September 23, 2023.  Does not include options to purchase
1,000,000 shares of our Common Stock at an exercise price of $1.18 per share
exercisable on December 1, 2010 and expiring September 23, 2023.  Mr.
Swain was the Company’s Chief Executive Officer at December 31, 2008, but is no
longer employed by the Company.





3.  Paul
Sweeney is a director on the Board. Includes (i) 5,249,387 outstanding shares of
our Common Stock; (ii) immediately exercisable warrants to purchase 3,749,387
shares of our Common Stock and expiring on December 31, 2010; (iii) immediately
exercisable warrants to purchase 5,000 shares of our Common Stock at an exercise
price of $2.25 per share and expiring September 24, 2013.  Does not
include (i) 316,550 shares of our Common Stock held by the Carbon Recovery
Liquidating Trust for the benefit of Mr. Sweeney; (ii) 316,550 not yet
exercisable CRC Acquisition Warrants to purchase shares of our Common Stock at
an exercise price of $2.75 per share and (iii) 316,550 not yet exercisable CRC
Acquisition Warrants to purchase shares of our Common Stock at an exercise price
of $4.00 per share, all such CRC Acquisition Warrants being held by the Carbon
Recovery Liquidating Trust for the benefit of Mr. Sweeney expiring on December
31, 2010.





4. David
Ames is a director on the Board.





5. Edward
Szofer is a director on the Board.





6.  Frank
Pringle served as the Company’s former Chariaman, President and Chief Executive
Officer.  Includes (i) 8,391,891 outstanding shares of our Common
Stock.  Does not include (i) 119,000 outstanding shares of our Common Stock
held by the Carbon Recovery Liquidating Trust for the benefit of Mr. Pringle;
(ii) 473,883 outstanding shares of our Common Stock held by Lois Augustine
Pringle, Mr. Pringle's wife; (iii) 1,520,171 outstanding shares of our Common
Stock held by the Carbon Recovery Liquidating Trust for the benefit of Mrs.
Pringle.





7.  Includes
11,188,996 outstanding shares of our Common Stock. Does not include (i)
5,305,940 not yet exercisable CRC Acquisition Warrants to purchase shares of our
Common Stock at an exercise price of $2.75 per share and (ii) 1,397,600 not yet
exercisable CRC Acquisition Warrants to purchase shares of our Common Stock at
an exercise price of $4.00 per share, all such CRC Acquisition Warrants expiring
on December 31, 2010. Fox Law Offices, P.A. is
the trustee of the Carbon Recovery Liquidating Trust and has no beneficial
ownership interest in the securities held in the Trust.  However,
until such time as our shares of Common Stock held by the Trust are distributed
to its beneficial holders, Fox Law Offices, P.A has the right to vote these
shares, which right is exercised by Richard C. Fox as principal of Fox Law
Offices, P.A. No person or entity has a 5% or greater interest in the Company as
the result of his/her/its beneficial interest in the Carbon Recovery Liquidating
Trust.





8.  Includes
11,145,225 outstanding shares of our Common Stock. Does not include 3,705,867
not yet exercisable Mobilestream Acquisition Warrants to purchase shares of our
Common Stock at an exercise price of $4.75 per share and expiring on December
31, 2010. Fox Law Offices, P.A. is the trustee of the Mobilestream Liquidating
Trust and has no beneficial ownership interest in the securities held in the
Trust.  However, until such time as our shares of Common Stock held by
the Trust are distributed to its beneficial holders. Fox Law Offices, P.A has
the right to vote these shares, which right is exercised by Richard C. Fox as
principal of Fox Law Offices, P.A. No person or entity has a 5% or greater
interest in the Company as the result of his/her/its beneficial interest in the
Mobilestream Liquidating Trust.


47


9.
Jeffrey Andrews served as the Company’s Chief Financial Officer, Treasurer and
Secretary from September 22, 2006 through February 1, 2010.  Includes
(i) 1,365,765 shares of Common Stock and (ii) immediately exercisable warrants
to purchase 200,000 shares of our Common Stock at an exercise price of $1.00 per
share and expiring September 23, 2018.  Does not include options to
purchase 1,000,000 shares of Common Stock at an exercise price of $1.18 per
share which are subject to shareholder approval of the amendment to the
Company’s stock option plan and expire on September 23, 2028.





10. Does
not include 400,000 shares of Common Stock owned by Worldwide Strategic
Partners, Inc. (“Worldwide”).  Brian Ettinger, our former Chairman of
the Board serves as CEO and General Counsel for Worldwide.





11.
Includes 400,000 outstanding shares of our Common Stock held by LP (Origination)
Limited, UK, of which Mr. Worthington is the owner.  Mr. Worthington
was a director of the Company from August 13, 2008 until November 11, 2009 and
the Company’s Chief Executive Officer from July 6, 2009 until November 11, 2009
and is no longer employed by the Company.





12. Mr.
Koehl was the Company’s Chief Operating Officer at December 31, 2008, but is no
longer employed by the Company.





13. As of
December  23, 2010.





Securities Authorized For
Issuance Under Equity Compensation Plans




Equity Compensation Plan Information as of Fiscal
      Year Ended December 31, 2009Plan category
                  
                  Number of securities
                    to be issued
                    upon exercise of
                    outstanding options,
                    warrants and rights
                    (a)
                  
                  
                  Weighted-average
                    exercise price of
                    outstanding options,
                    warrants and rights
                    (b)
                  
                  
                  Number of securities
                    remaining available
                    for future issuance
                    under equity
                    compensation plans
                    (excluding securities
                    reflected in column (a))
                    (c)Equity compensation plans approvedby
      security holders (1)
                  
                  
                  6,200,000
                  
                  
                  $
                  0.88
                  
                  
                  
                  0Equity
      compensation plans not approvedby
      security holders
                  
                  
                  3,775,000
                  (2)(3)
                  
                  $
                  1.19
                  
                  
                  
                  1,085,000
                  (4)Total
                  
                  
                  9,660,000
                  
                  
                  $
                  0.99
                  
                  
                  
                  0





1.
Represents (i) 200,000 options issued to Jeff Andrews in 2006 at an exercise
price of $1.00 per share expiring on September 23, 2018; (ii) 3,000,000 options
issued to our former CEO, Eric Swain in September of 2008 at an exercise price
of $1.18 per share, 1/3 of which will expire each year beginning September 23,
2023; (iii) 3,000,000 options issued to our current CEO, Ken Kinsella, to be
exercised within 36 months from the date of issuance at an exercise price of
$.58 per share, pursuant to an individual compensation arrangement and (iv)
200,000 securities subject to issuance upon exercise of outstanding warrants
pursuant to an individual compensation arrangement with Peter Worthington, our
former CEO and a director, at an exercise price of $.40 per share to expire on
April 7, 2013.





2. During
2008, the Board of Directors adopted a plan of compensation for the Board of
Directors providing for the issuance of a total of up to 1,200,000 warrants to
directors for attending meetings of the Board of Directors.  As of
December 31, 2008, each director receives 5,000 warrants for each meeting
attended.  Warrants from this plan are also granted for each meeting
of the committees of the Board attended.  As of December 31, 2009,
115,000 warrants were issued under this plan. An aggregate of 30,000 warrants
have an exercise price equal to $1.04 per share and expire on March 27,
2010.  An
aggregate of 25,000 of these warrants are exercisable at an exercise price equal
to $1.10 per share and expire on August 5, 2013.The remaining
60,000 warrants are exercisable at an exercise price of $0.58 per share and
expire on December 15, 2013.


48


3.  3,460,000
of these securities are subject to issuance upon exercise of outstanding
options, but are subject to stockholder approval of an increase in the number of
securities authorized to be issued under our 2008 Stock Option Incentive
Plan.  The 2008 Stock Option Incentive Plan reserved up to an
aggregate of 2,500,000 shares of the Company’s Common Stock for issuance under
the plan.





4.  Includes
the number of securities remaining for issuance under the plan of compensation
adopted by the Company for attendance at board meetings by
directors.





Item
13. Certain Relationships and Related Transactions.





Carbon Recovery Acquisition
Agreement





On or
about July 26, 2006, we entered into a plan and agreement of reorganization (the
"CRC Acquisition Agreement") with Carbon Recovery Corporation, a New Jersey
corporation formed on July 19, 2002 ("Carbon Recovery" or "CRC"), pursuant
to which we agreed to purchase substantially all of the assets of, and assume
certain specified liabilities of, Carbon Recovery, in exchange for the
consideration described below.  The acquisition was completed on
September 22, 2006 (the “CRC Acquisition Closing”).  At the time of
the acquisition, Carbon Recovery was controlled by Mobilestream Oil, Inc.
("Mobilestream") which in turn was controlled by Frank G. Pringle, our former
Chairman until November 12, 2008 and our former President and Chief Executive
Officer until August 13, 2008.





At the
CRC Acquisition Closing, we assumed certain specified liabilities of CRC,
acquired substantially all of the assets of CRC and issued a total of 48,688,996
shares of our common stock (including (i) 37,500,000 shares issued to
Mobilestream representing Mobilestream’s ownership of the identical number of
shares of CRC common stock and (ii) 11,188,996 shares issued to CRC
).  The acquired assets of CRC included an exclusive license, carried
at a zero dollar book value, from Mobilestream to utilize the patent pending
application for the use of the Technology.  As part of the
transaction, we also issued to CRC 3,908,340 Class B warrants, 1,397,600 Class D
warrants and 1,397,600 Class E warrants (collectively, the "CRC Acquisition
Warrants") to purchase shares of our common stock.  The Class B and
Class D warrants have an exercise price of $2.75 and the Class E warrants have
an exercise price of $4.00.  All of the CRC Acquisition Warrants were
originally scheduled to expire at different times in 2007 and 2008. However,
through several amendments the Board of Directors extended the expiration date
of the CRC Acquisition Warrants to March 31, 2010. The CRC Acquisition Warrants
have currently expired.





In order
to clarify, restate and memorialize the ownership and licensure of the
intellectual property previously licensed to Carbon Recovery by Careful Sell
(which, by the time of the CRC Acquisition Closing, had been merged into
Mobilestream, contemporaneous with the CRC Acquisition
Closing,  Mobilestream, Mr. Pringle and his wife, Lois Augustine
Pringle, executed a combined technology license agreement (the "Combined
Technology License Agreement").  The Combined Technology License
Agreement confirmed (i) Mobilestream as the sole owner of the licensed
intellectual property, and (ii) the exclusive license of the intellectual
property by Mobilestream to Carbon Recovery.  In the same agreement,
Carbon Recovery assigned all of its interest in the intellectual property
license to the Company and the Company agreed to pay to Mobilestream the royalty
payments that CRC was previously obligated to pay to Mobilestream under the
February 2005 Agreement.  The Company's royalty obligations under the
Combined Technology License Agreement ended when the Company acquired
substantially all of the assets of Mobilestream.


49


Upon the
CRC Acquisition Closing, CRC’s sole assets were the shares and warrants we
issued to CRC at the CRC Acquisition Closing (the “CRC Acquisition
Consideration”).  For federal income tax reasons and in order to avoid
treatment as an inadvertent investment company under the Investment Company Act
of 1940, CRC determined to liquidate and dissolve immediately upon the CRC
Acquisition Closing and to deposit all its assets (consisting, at that point,
solely of the CRC Acquisition Consideration) in a liquidating trust (the “CRC
Liquidating Trust”) pursuant to a liquidating trust agreement (the "CRC
Liquidating Trust Agreement") entered into with Olde Monmouth Stock Transfer
Co., Inc. ("Olde Monmouth"), our transfer agent, and pursuant to which Olde
Monmouth agreed to act as the liquidating trustee.  Old Monmouth’s term as
trustee has since ended and Fox Law Offices P.C., currently serves as
trustee (the "CRC Liquidating Trustee"). The beneficiaries of the CRC
Liquidating Trust are the stockholders of CRC.  The CRC Acquisition
Consideration must be held in the liquidating trust indefinitely until it can
all be distributed to the beneficiaries of the CRC Liquidating Trust pursuant to
an effective registration statement under the Securities Act of 1933 or pursuant
to an exemption therefrom.  In connection with the CRC Liquidating
Trust Agreement, we agreed that we would file a registration statement for the
resale of the shares of our common stock and warrants (and the shares underlying
them) issued as part of the CRC Acquisition Consideration and for the resale of
the shares underlying the CRC Acquisition Warrants.  In January of
2010, the expiration date of the Mobilstream Acquisition Warrants, was extended
from March 31, 2010 to December 31, 2010.





As of
December 31, 2009, the Company believes that (i) Mr. Pringle is entitled to a
distribution of 119,000 shares of our common stock from the CRC Liquidating
Trust and (ii) Lois Augustine Pringle, the wife of Mr. Pringle, is entitled to a
distribution of 1,520,171 shares of our common stock from the CRC Liquidating
Trust.





Mobilestream Oil, Inc.
Acquisition Agreement





On
December 31, 2006, we acquired the assets of Mobilestream Oil, Inc.
("Mobilestream") pursuant to a plan and agreement of reorganization dated
November 28, 2006 (the "Mobilestream Acquisition Agreement") between the Company
and Mobilestream. Mobilestream was a development stage company which owned
certain proprietary technology and related custom software for the use of
microwaves to break down petroleum-based products, such as used tires, into
their component parts, and capturing those components in usable form for
resale.  At the closing of the purchase of Mobilestream’s assets (the
“Mobilestream Acquisition Closing”), we (i) acquired all of the Technology and
(ii) assumed Mobilestream’s liabilities, which were minimal.





The
Mobilestream assets we acquired consisted of (i) the then three patents pending
for the Technology carried at a book value of zero, (ii) approximately
$1,678,000 of cash and (iii) approximately $149,000 of fixed
assets.  Mobilestream also owned 37,500,000 shares of our own common
stock (acquired in connection with our purchase of the assets of CRC) which were
cancelled as part of the transaction.   Further, at the
Mobilestream Acquisition Closing, the Combined Technology License Agreement was
terminated by virtue of the merger of the interests of the licensor and the
licensee thereunder.





At the
time of the Mobilestream acquisition, Mobilestream was controlled by Frank G.
Pringle, our then Chairman, President and CEO.  At that time, Mr.
Pringle had an approximately 86% ownership interest
in  Mobilestream.





The
parties to the Mobilestream Acquisition Agreement intended that the acquisition
of Mobilestream would qualify as a "D" Reorganization under Section 368(a)(1)(D)
of the IRC.  No Mobilestream stockholder was a party to the
Mobilestream Acquisition Agreement.





At the
Mobilestream Acquisition Closing, we issued (i) 11,145,225 shares of our Common
Stock to Mobilestream (the “Mobilestream Acquisition Common Stock”); (ii)
35,236,188 shares of our 2006 Series of Convertible Preferred Stock (or
“Preferred Stock A”) to Frank G. Pringle, the sole holder of the 2006 Series of
Mobilestream Preferred Stock; and (iii) 27,205,867 common stock purchase
warrants (the "Mobilestream Acquisition Warrants”) to purchase shares of our
common stock on the basis of one Mobilestream Acquisition Warrant for each three
shares of either Mobilestream common stock or preferred stock, exercisable at
$4.75 per share for a period ending on December 31, 2007.  23,500,000
of the Mobilestream Acquisition Warrants were issued directly to Frank G.
Pringle and were subsequently cancelled on October 23,
2007.   The remainder of the Mobilestream Acquisition Warrants
were issued to Mobilestream.  On December 31, 2007, the Board of
Directors extended the expiration date of the outstanding Mobilestream
Acquisition Warrants to December 31, 2008.  In November 2008, the
Board of Directors amended the expiration date of the outstanding Mobilestream
Acquisition Warrants to 120 days subsequent to the effective date of a
successful registration statement filed with the SEC covering the outstanding
Mobilestream Acquisition Warrants.  In July 2009, the Company amended the
expiration date of the Mobilestream Acquisition Warrants to March 31, 2010. In
January of 2010, the expiration date of the Mobilstream Acquisition Warrants,
was extended from March 31, 2010 to December 31, 2010.


50


As stated
above, at the Mobilestream Acquisition Closing, we issued 35,236,188 shares of
our Preferred Stock A to Frank G. Pringle, the sole holder of the 2006 Series of
Mobilestream Preferred Stock.  At the time of issuance, each share of
Preferred Stock A was entitled to two votes per share and each was convertible
into two shares of our Common Stock.  In October 2007, the terms of
conversion of our Preferred Stock A were changed from two shares of our Common
Stock for each share of Preferred Stock A to half of one share of our Common
Stock for each share of our Preferred Stock A.  On June 25, 2008, Mr.
Pringle converted 1,791,064 shares of Preferred Stock A into 895,532 shares of
our Common Stock.  On August 13, 2008, Mr. Pringle converted an
additional 33,440,124 shares of Preferred Stock A into 16,720,062 shares of our
Common Stock and sold 6,600,000 shares of our Common Stock back to the Company
for $1,650,000 pursuant to a Stock Redemption Agreement.  The remaining
5,000 shares of Preferred Stock A, then held by a person related to Mr. Pringle,
were converted into 2,500 shares of our Common Stock on January 6,
2009.





Upon the
Mobilestream Acquisition Closing, Mobilestream’s sole assets were the shares and
warrants we issued to Mobilestream at and in connection with the Mobilestream
Acquisition Closing (the “Mobilestream Acquisition Consideration”, excluding the
23,500,000 Mobilestream Acquisition Warrants issued directly to Frank Pringle
which were subsequently cancelled and the Preferred Stock A which has since been
converted into shares of our Common Stock).  For federal income tax
reasons and in order to avoid treatment as an inadvertent investment company
under the Investment Company Act of 1940, Mobilestream determined to liquidate
and dissolve immediately upon the Mobilestream Acquisition Closing and to
deposit all its assets (consisting, at that point, solely of the Mobilestream
Acquisition Consideration) in a liquidating trust (the “Mobilestream Liquidating
Trust”) pursuant to a liquidating trust agreement (the "Mobilestream Liquidating
Trust Agreement") entered into with Olde Monmouth and pursuant to which Olde
Monmouth agreed to act as the liquidating trustee. Old Monmouth’s term as
trustee has since ended and Fox Law Offices P.C., currently serves as
trustee (the "Mobilstream Liquidating Trustee").  The
beneficiaries of the Mobilestream Liquidating Trust are the stockholders of
Mobilestream.  The Mobilestream Acquisition Consideration must be held
in the liquidating trust indefinitely until it can all be distributed to the
beneficiaries of the Mobilestream Liquidating Trust pursuant to an effective
registration statement under the Securities Act of 1933 or pursuant to an
exemption therefrom.  In connection with the Mobilestream Liquidating
Trust Agreement, we agreed that we would file a registration statement for the
resale of the shares of our common stock and warrants (and the shares underlying
them) issued as part of the Mobilestream Acquisition Consideration. The
obligation to register now exists solely with respect to the shares of Common
Stock issued to Mobilestream at the Mobilestream Acquisition Closing as the
Mobilestream Acquisition Warrants have expired as of March 31,
2010.





On May
17, 2007, we purchased 94,961 shares of our common stock for $66,471 in cash
from Ms. Lois Pringle, the wife of Mr. Frank G. Pringle, our then President and
Chief Executive Officer.





In August
2007, 25 individuals purchased an aggregate of 642,106 shares of Carbon Recovery
Corporation in a private sale from Lois Augustine Pringle, the wife of Frank
Pringle, who was, at the time, our Chairman, President and CEO. The purchasers
were incorrectly informed that as part of the consideration in the transaction
they would receive warrants to purchase shares of our common stock that attached
to the Carbon Recovery shares. Ms. Pringle's Carbon Recovery shares did not have
any warrant attachment. Although the Company was not a party to this
transaction, the Company issued a total of 642,106 warrants to purchase shares
of our common stock to the purchasers at exercise prices of $2.50 (290,000
warrants) and $2.75 (352,106 warrants).


51


Worldwide Strategic
Partners, Inc.





In
November 2007, the Company entered into a six month consulting agreement with
Worldwide Strategic Partners, Inc. (“Worldwide”), a corporation in which General
Lincoln Jones III, a former director, has an ownership interest in excess of
thirty percent. The consulting agreement was executed and delivered
approximately six-months before General Jones became a director of our Company.
Subsequent to the execution of the consulting agreement with Worldwide, the
Company issued a total of 150,000 shares of its common stock to Worldwide valued
at $448,000 through June 30, 2008. On May 26, 2008, the Company and Worldwide
terminated the November 2007 consulting agreement by agreeing to pay Worldwide a
total of 275,000 shares of its common stock for services rendered, inclusive of
the 150,000 shares previously issued. On May 26, 2008, the Company entered
into a new five-year consulting agreement with Worldwide expiring on May 26,
2013, pursuant to which Worldwide will identify potential acquisition candidates
or joint venture partners for the Company, and upon closing a transaction with
any such candidate, the Company will pay Worldwide a fee based upon a percentage
of the value of the transaction beginning with 5% of the first $1,000,000
dollars, and declining 1% for each successive $1,000,000 increase in transaction
value until Worldwide receives 1% of the transaction value in excess of
$4,000,000.  Brian Ettinger, the CEO and General Counsel for
Worldwide, was appointed to the Company’s Board of Directors and as its Chairman
on November 11, 2009 and resigned on July 16, 2010.





Investor Relations
Agreement





On
September 4, 2008, the Company entered into an Investor Relations Agreement with
Paul Sweeney, a director of the Company since August 13, 2008, for consulting
services relating to investor relations and investment banking services to be
provided by Mr. Sweeney for a one year period.  On September 8, 2008,
the Company issued 1,500,000 shares of its common stock to Mr. Sweeney, valued
at $1,440,000, for the consulting services he provided and will provide to the
Company.  Prior to his becoming a director of the Company, Mr. Sweeney
made investments in the Company whereby he purchased securities directly from
the Company as follows:





(i) on
March 18, 2008, Mr. Sweeney acquired 190,320 shares of our common stock for a
purchase price of $1.00 per share and in connection therewith received warrants
for the purchase of an additional 190,320 shares of common stock at an exercise
price of $2.00 per share;





(ii) on
March 26, 2008, Mr. Sweeney acquired 441,010 shares of common stock from the
Company at a purchase price of $1.00 per share and in connection therewith
received warrants for the purchase of an additional 441,010 shares of common
stock at an exercise price of $2.00 per share;





(iii) on
April 1, 2008, Mr. Sweeney acquired 2,018,057 shares of common stock from the
Issuer at a purchase pr ice of $1.00 per share and in connection therewith
received warrants for the purchase of an additional 2,018,057 shares of common
stock at an exercise price of $2.00 per share; and





(iv) on
April 11, 2008, Mr. Sweeney acquired 1,100,000 shares of common stock from the
Company at a purchase price of $1.11 per share and in connection therewith
received warrants for the purchase of an additional 1,100,000 shares of common
stock at an exercise price of $2.00 per share.


52


LP Origination Limited
Consulting Agreement





On
October 1, 2008, the Company and LP (Origination) Limited, a United Kingdom
company (“LP Origination”) owned by Peter A. Worthington, a director of the
Company from August 13, 2008 until November 11, 2009 and the Company’s Chief
Executive Officer from July 6, 2009 until November 11, 2009, entered into a
consulting agreement with an effective date of August 1, 2008, pursuant to which
LP Origination agreed to perform management advisory and strategic planning
services for a term ending on February 1, 2009, in return for a payment of
$90,000 and the issuance of 100,000 shares of the Company’s common stock valued
at $149,000 using the average of the closing bid and ask price of our common
stock on that day as reported by the Pink Sheets. On September 30, 2008, we paid
$50,000 to LP Origination with the remaining $40,000 payment paid in November
2008.  On May 11, 2009, we entered into another Consulting Agreement
with LP Origination with an effective date of April 7, 2009, pursuant to which
LP Origination agreed to perform management advisory, strategic planning and
other consulting services as Global may request from time to time for a term
ending on April 6, 2010, in return for (i) a payment of $100,000 conditioned
upon and to be paid after the consummation of a specified amount of sales have
been made that exploits Global’s patent pending microwave technologies and for
which LP Origination had some significant involvement as set forth in the
Consulting Agreement and (ii) the immediate entitlement to and subsequent
issuance of 300,000 shares of Global’s Common Stock, which shares were
ultimately issued on May 12, 2009.  The latest Consulting Agreement
was terminated on November 11, 2009.





Frank Pringle Severance
Agreement





On
November 12, 2008 the Company, Mr. Pringle, and 888 Corp. entered into a
severance agreement pursuant to which (i) the Company agreed to pay Mr. Pringle
$200,000.00 per year for the six (6) year period commencing on January 1, 2009
in consideration for (i) Mr. Pringle's return of 225,000 shares of common stock
previously issued to Mr. Pringle on or about June 26, 2008 and which Mr. Pringle
held in "street name" at a broker-dealer and (ii) the continued compliance by
Mr. Pringle and 888 Corp. with the covenants, agreements and other terms of the
Severance Agreement (as described in more detail below). The Company agreed to
make payments to Mr. Pringle in monthly installments (which was offset by
approximately $15,000 that Mr. Pringle was obligated to reimburse the Company by
March 1, 2009, which amount includes personal expenses of Mr. Pringle incurred
by the Company and 50% of the legal fees and expenses incurred by the Company in
regard to the negotiation and preparation of the Severance Agreement). The
Company's severance payments to Mr. Pringle would also be offset by any
indemnification payments that Mr. Pringle may become obligated to pay under the
Severance Agreement.





In
addition to the return of the 225,000 shares of Company Common Stock previously
issued to him, Mr. Pringle also agreed to restrict the amount of shares of
Company Common Stock that he or his immediate family or any entity directly or
indirectly controlled by any of them may sell, transfer or encumber to the
following amounts: no shares prior to February 1, 2009; an aggregate of Four
Hundred Thousand (400,000) shares of Company Common Stock during the three (3)
month period beginning February 1, 2009; an aggregate of Three Hundred Thousand
(300,000) shares of Company Common Stock during the three (3) month period
beginning May 1, 2009; and an aggregate of Two Hundred Fifty Thousand (250,000)
shares of Company Common Stock during any three month period thereafter
beginning August 1, 2009. These restrictions will remain in place unless and
until (i) Mr. Pringle and his family members directly or indirectly own less
than 5,000,000 shares of Company Common Stock, and (ii) Mr. Pringle and his
family members have fully complied with the restrictions on sales, transfers and
encumbrances set forth in the Severance Agreement and are not in breach of such
provisions.  Any transfers by Mr. Pringle or any of his affiliates
that are permitted under the Severance Agreement are subject to the Company's
right of first refusal, which the Company has 10 days to exercise. The Company
may assign this right of first refusal or designate a third party to exercise
such right.





Pursuant
to the Severance Agreement, Mr. Pringle immediately resigned as Chairman and as
a member of the Company's Board of Directors and in all other capacities (in
each case effective as of the date of the Severance Agreement).





The
Severance Agreement also provided for: (i) the immediate termination of the
Consulting Agreement between the Company and 888 Corp. with no further payments
or benefits due from the Company to 888 Corp. (except for payments to 888 Corp.
of any sums otherwise due under the Consulting Agreement through December 31,
2008); (ii) Mr. Pringle to be subject to a nine year non-compete and non-solicit
agreement, which runs from the date of the agreement until the end of the third
year after his last scheduled payment under the Severance Agreement; (iii) Mr.
Pringle to be subject to a non-disclosure obligation and to return to the
Company all copies of confidential information directly or indirectly in his
possession or control; and (iv) mutual general releases and non-disparagement
provisions.


53


Under the
Severance Agreement, Mr. Pringle unconditionally waived any rights, claims and
causes of action against the Company with respect to any of its intellectual
property (including claims he has made in the past). Further, Mr. Pringle made
extensive representations regarding the validity of the Company's intellectual
property and that such intellectual property is free and clear of all liens,
claims and/or encumbrances. The Company may obtain indemnification from Mr.
Pringle for any breach or alleged breach of Mr. Pringle's representation and
warranties regarding the intellectual property and/or for any breach or alleged
breach of any other representation, warranty, covenant or agreement of Mr.
Pringle or 888 Corp. under the Severance Agreement.





On
September 29, 2009, (i) the Company declined to exercise its right of first
refusal to purchase a total of 950,000 shares from Mr. Pringle and (ii) the
Company and Pringle agreed to amend the Pringle Severance Agreement with respect
to the selling restrictions (the “Amendment”).  Pursuant to the
Amendment, (i) Mr. Pringle agreed not to sell, assign, transfer, pledge or
encumber more than 20,000 shares of the Company’s common stock per week
commencing on September 28, 2009 and continuing for the following 78 weeks
thereafter, (ii) any transfers of shares that Mr. Pringle agreed to make prior
to September 28, 2009 would be made from the 950,000 shares that were permitted
to be sold pursuant to the Pringle Severance Agreement prior to November 1, 2009
and (iii) in all other respects, the terms of the original Pringle Severance
Agreement remain unchanged.





Clark Resources,
Inc.





The
Company engaged Clark Resources, Inc. (“Clark”), a governmental relations
consulting firm located in Harrisburg, Pennsylvania, to provide consulting
services with respect to governmental issues concerning permits and
funding.  The president and CEO of Clark is Frederick A. Clark, who
served as a director of the Company from December 2006 to March 9, 2010. The
Company had an unwritten monthly retainer agreement with Clark Resources and for
the years ended December 31, 2008 and 2007, and for the cumulative period July
12, 2002 (inception) to December 31, 2008, paid Clark Resources a total of
$60,000, $65,000, and $154,670, respectively.   The monthly retainer
agreement was terminated as of May 31, 2009.





Wayne
Koehl





Pursuant to an agreement and general
release dated on or about May 9, 2009, the Company agreed (a) to pay to Koehl a
salary for a period of six (6) months and two (2) weeks from April 17, 2009 (the
“Compensation Period”) (b) to pay to Koehl any bonuses that would have been
payable to Koehl pursuant to his employment letter with the Company dated
September 23, 2008 (the “Employment Letter”) based upon sales made by the
Company solely to Biofuels, Inc. as if Koehl had remained in the employment of
the Company at the time of such sales; (bonuses would not be paid on sales made
other than to Biofuels, Inc.) (c) if the Company properly and timely elects to
continue medical coverage under Company’s current health care benefits plan in
accordance with the continuation requirements of COBRA, the Company shall pay
for the cost of the premium for such coverage for a period of six (6) months and
two (2) weeks beginning on the last day of employment. Thereafter, Koehl shall
be entitled to elect to continue such COBRA coverage for the remainder of the
COBRA period, at Koehl’s own expense, subject to the provisions of the American
Recovery and Reinvestment Act of 2009; and (d) that Koehl shall be entitled to
retain options to purchase 200,000 shares of Common Stock and options to
purchase an additional 200,000 shares of Common Stock previously granted to him
and which were to vest on September 23, 2009 but which shall now be immediately
vested; provided, however, that the
grant of all such options remains subject to the approval of the
stockholders in accordance with the terms of the original grant thereof and such
options may not be exercised prior to such approval being obtained. 600,000
options were forfeited.


54


Furthermore, Koehl acknowledged that
during the course of his employment with the Company, he has become familiar
with the Company's trade secrets and other confidential information and Koehl
agreed that during the Compensation Period and for a six (6) month period
thereafter (the "Non-Compete
Period"), Koehl
could not directly or indirectly own any interest in, manage, control,
participate in, consult, with, render services for, or in any manner engage in
any business involved in the business of the Company conducted or contemplated
to be conducted by the Company during the period of Keohl's employment within
any geographical area in which the Company engaged in such business or planned
to engage in during the period of Koehl's employment. Nothing therein, however,
was to prohibit Koehl from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded, so
long as Koehl  has no active participation in the business of such
corporation.





During
the Non-Compete Period, Koehl shall not, directly or indirectly through another
person or entity, (i) induce or attempt to induce any employee of the Company to
leave the employ of the Company, or in any way interfere with the relationship
between the Company and any employee thereof, (ii) hire any person who was an
employee of the Company at any time during the period of Koehl 's employment
with the Company, or (iii) induce or attempt to induce any client, customer,
supplier or other business relation of the Company to cease doing business with
the Company or in any way interfere with the relationship between any such
client, customer, supplier or business relation and the Company.





Eric Swain Settlement
Agreement and Release





On
October 2, 2009, the Company entered into a Settlement Agreement and Release
with Eric Swain, the Company’s Chief Executive Officer from November 24, 2008
until July 6, 2009 (the “Swain Severance Agreement”).  The Swain
Severance Agreement replaced the prior terms of employment  that the
Company had with Mr. Swain.  Pursuant to the terms of the Swain
Severance Agreement, in material part, (a) the Company and Mr. Swain agreed to
mutual general releases; (b) Mr. Swain agreed, for a two year period, not to
compete in the business of microwave resource recovery technology and not to
solicit the Company’s employees or customers; (c) of the options to purchase
5,000,000 shares of the Company’s common stock at an exercise price of $1.18 per
share previously granted to Mr. Swain, Mr. Swain retained 1,000,000 that
previously vested, 1,000,000 that vested on December 1, 2009 and 1,000,000 that
will vest on December 1, 2010, the remaining 2,000,000 being cancelled; (d) the
Company agreed, subject to Mr. Swain’s continued compliance with the terms of
the Swain Settlement Agreement, (i) to pay to Mr. Swain certain bonuses, if
earned, payable to him under the prior terms of his employment through January
6, 2011, and (ii) to issue to Mr. Swain an aggregate of 2,250,000 shares of its
common stock on certain dates starting on October 6, 2009 and ending on October
6, 2011, of which 1,800,000 shares are to be shares registered under the
Securities Act of 1933 pursuant to an effective registration statement on Form
S-8 filed on January 29, 2008 (“S-8 Shares”); (e) Mr. Swain agreed not to sell
more than 35,000 S-8 shares during any calendar week; (f) the Company will
continue to provide full health insurance benefits to Mr. Swain through July 5,
2010;  and (g) the Company transferred to Mr. Swain the title of
ownership of the Company’s car then in Mr. Swain’s possession.  In
compliance with the terms of the Swain Severance Agreement, on October 5, 2009,
the Company issued to Mr. Swain 450,000 restricted shares of its common
stock.  In September of 2009, the Company recorded a severance expense
of $3,654,714 for the payments to be paid by the Company to Mr. Swain pursuant
to the Swain Settlement Agreement.  The payments were valued using the
present value of expected future outflows.The Swain Severance
Agreement was amended on January 26, 2010, to provide that the remaining 1.2
million S-8 Shares issuable in connection with the Severance Agreement on future
dates in 2010 and 2011 would be replaced by issuing 1.4 million shares of its
restricted common stock subject to SEC rule 144 on January 27,
2010.


55


UAF License
Agreement





On
October 14, 2009, the Company entered into a License Agreement with Universal
Alternative Fuels, Inc. (“UAF”) and in connection therewith (i) the Company
entered into a Security Agreement with UAF and (ii) UAF issued a Purchase Order
to the Company.  Pursuant to the terms of the License Agreement, in
material part, (i) UAF purchased an exclusive, world-wide, royalty-free license,
with the right to sub-license and effective for an unlimited time, to use and
exploit the Company’s intellectual property and technological know-how for the
microwave processing of oil shale and coal and the recovery of energy,
energy-producing materials and by-products from oil shale and coal; (ii) UAF
paid to the Company a license fee of $750,000 and will issue to the Company
shares of common stock of UAF equal to 20% of the issued and outstanding shares
of UAF common stock; and (iii) UAF agreed to purchase exclusively from the
Company all machines to be manufactured for UAF (or its sub-licensees) under the
license agreement, subject to the Company’s ability to manufacture such
machines.  In connection with the License Agreement, (i) the Company
entered into a Security Agreement with UAF and (ii) UAF issued a Purchase Order
to the Company.  The Company understands that Mr. Thomas Vieweg, who owns
125,000 shares of Common Stock of the Company and was a former consultant
to the Company, is a principal in UAF.  In addition, the Company
understands that certain other principals of UAF currently are either principals
or affiliates of Professional Offshore Opportunity Fund, Ltd.
(“POOF”).  POOF previously provided certain financing to, and was a
security holder of, the Company.





Prior to
the date of this filing, the Company received from UAF a notice of
termination (the "Termination Notice") of the License Agreement and Purchase
Order and a notice of foreclosure ("Foreclosure Notice") in connection with the
Security Agreement.  The Company believes that, for a number of reasons,
pursuant to the terms of the License Agreement and all related agreements,
the Termination Notice and Foreclosure Notice are invalid. On July 26,
2010, the Company issued a notice of default ("Default Notice") to UAF as a
result of UAF's failure to issue the Equity Interests and make the required
Purchase Price payments pursuant to the terms of the License Agreement and
Purchase Order.  UAF has 60 days from the date of the Default Notice to
cure such breach.  If UAF has not cured the breach within the 60 day time
frame the Default Notice serves as notice of termination by the Company of the
License Agreement and Purchase Order. Upon such termination UAF's lien
pursuant to the Security Agreement would terminate. The 60 day time frame
has elapsed as of September 26, 2010 thereby terminating the License Agreement
and Purchase Order.  On October 20, 2010, UAF sent to the Company a
Notice of Disposition of Collateral notifying the Company that certain of it
patent applications and other items as identified in the Security Agreement
would be offered for sale at a public auction on November 4, 2010. The Company
is not aware if such auction was actually held.  Additionally, on
November 4, 2010 the Company received a copy of a written consent executed by
the board of directors of UAF authorizing the issuance of the Equity Interest
together with an unsigned copy of a stock certificate in the Company’s name for
an aggregate of 40 shares of the common stock of UAF.  There are no
assurances as to the outcome of this dispute.




Brian Ettinger Consulting
Agreement and Indemnity Agreement and Release





On
November 11, 2009, the Board elected Brian Ettinger to the Board of Directors of
the Company and appointed him as the Chairman of the Board. Prior to such
appointment and in connection with consultant services provided by Mr. Ettinger
to the Company, the Company issued to Mr. Ettinger the following securities: (i)
on June 13, 2008, the Company issued 57,500 shares of its Common Stock to Mr.
Ettinger as payment for consulting services rendered valued at $129,375; (ii) on
October 1, 2008, the Company issued to Mr. Ettinger warrants to purchase 300,000
shares of its Common Stock in partial payment of consulting services to be
performed, which warrants have an exercise price of $2.00, with 100,000 warrants
vesting on each of June 10, 2009, January 10, 2010 and June 10, 2010; (iii) on
October 31, 2008, the Company issued 150,000 shares of its Common Stock to Mr.
Ettinger for consulting services rendered valued at $232,500; (iv) on April 1,
2009, the Company issued to Mr. Ettinger warrants to purchase 200,000 shares of
its Common Stock in partial payment of consulting services to be performed,
which warrants have an exercise price of $1.10 per share and expire on varying
dates ranging from January 10, 2012 to June 10, 2012; and (v) on April 22, 2009,
the Company issued 225,000 shares of its Common Stock to Mr. Ettinger for
consulting services rendered valued at $254,250.





On January 1, 2010, the Company entered
into a Consulting Services Agreement with Mr. Ettinger. (A) Mr. Ettinger agreed
to provide the Company with certain consulting services outside his duties as
Chairman of the Board of Directors of the Company and (B) as compensation for
the consulting services to be provided by Mr. Ettinger pursuant to the
Consulting Services Agreement, the Company agreed to issue to Mr. Ettinger (i)
375,000 shares of its Common Stock (valued at $0.58 per share, the last sale
price per share of the Company’s Common Stock as reported by the Pink Sheets on
December 31, 2009), which shares were issued on January 6, 2010 and which may be
required to be assigned back to the Company in the event of the termination of
the Consulting Services Agreement under certain circumstances, and (ii) warrants
to purchase a total of 500,000 shares of the Company’s Common Stock at an
exercise price of $0.58 per share, which warrants were issued on January 6,
2010, half of which warrants vest on each of July 1, 2010 and January 1, 2011
and which warrants are exercisable for a 24 month period following the
respective vesting dates.


56


On July 16, 2010, Mr. Ettinger resigned
from his position on the Board of Directors of the Company.  In
connection with Mr. Ettinger’s resignation all prior employment and/or
consulting agreements with Mr. Ettinger were terminated and the Company entered
into a new consulting agreement with Mr. Ettinger.  The terms of the
new consulting agreement provide that Mr. Ettinger shall provide general
consulting services and assist the Company in developing its technology and
products for business opportunities in the United States and internationally.
The Company also acknowledges and agrees that Mr. Ettinger has earned all
compensation, including shares issued and stock options granted under the
original consulting agreement. For all opportunities agreed upon in writing by
the Company, Mr. Ettinger shall receive a consulting fee equal to 5% of the
gross revenues received by the Company.  Additionally, the Company
agreed to reimburse Mr. Ettinger for certain pre-approved travel and lodging
expenses.  The Consulting Agreement is for a term of one year and may
be extended thereafter by mutual agreement of the parties.





The Company and Mr. Ettinger also
entered into an indemnity agreement, dated July 16, 2010 (the “Indemnity
Agreement”), pursuant to which the Company agreed to indemnify Mr. Ettinger from
and against any and all claims, losses, fines, penalties, judgments, damages,
costs or expenses (including attorneys’ fees, consultant fees and expert fees)
and all other liabilities to any third party arising out of or resulting from
that certain lawsuit currently pending in the Superior Court of New Jersey and
initiated by Jeffrey Kimberly, the Company’s former Chief Executive Officer
against the Company, Ken Kinsella and Brian Ettinger. Additionally, the Company
agreed to pay Mr. Ettinger, a lump sum cash payment equal to $80,000, by July
23, 2010, which includes payment of an outstanding invoice for legal services
amounting to approximately $53,000.





In accordance with the terms of the
Indemnity Agreement, Mr. Ettinger agreed to waive his right to receive 500,000
shares of the Company’s Common Stock and options to purchase an aggregate of
1,000,000 shares of the Company’s Common Stock approved by the Company’s Board
of Directors in December of 2009, as well as any other additional compensation
benefits that Mr. Ettinger may have been entitled to upon the Company reaching
certain milestones.





In addition to the Indemnity Agreement,
the Company also entered into a mutual release (the “Mutual Release”) with Mr.
Ettinger dated July 16, 2010 (the “Effective Date”), pursuant to which the
parties agreed to waive, release and discharge each other party and as
applicable, their predecessors in interest, successors, shareholders, assigns,
affiliates, directors, officers, shareholders, members, managers, employees,
agents and heirs from any and all claims, liabilities, demands, causes of action
or suits of any kind whether existing now or in the future, that might arise
from, related to or in any way connected with any actions or omissions occurring
prior to the Effective Date. The Mutual Release does not release either party
from any claim related to or in connection with any acts or omissions that,
individually or collectively, constitute fraud, fraudulent inducement or
intentional misrepresentation.





Director
Independence





As the
Company is not a listed issuer whose securities are listed on a national
securities exchange, or an inter-dealer quotation system which has requirements
that a majority of the board of directors be independent, no disclosure is
required for this portion of Item 7, pursuant to Item 407(a) of Regulation S-K.
Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if
he or she also is an executive officer or employee of the corporation. Under
such definition, Ken Kinsella would not be considered an independent
director.


57


Item
14.  Principal Accounting Fees and Services





Audit
Fees, Audit Related Fees, Tax Fees and All Other Fees





As of May 17, 2010, the Company’s
independent auditing firm is Cherry Bekaert & Holland LLP (“Cherry
Bekaert”).Prior to this
date Rothstein Kass & Company was the Company’s independent auditing
firm.The following is a
summary of the fees billed to the Company by Rothstein Kass & Company, P.C.
for professional services rendered for the fiscal years ended December 31, 2008
and 2009.




Fee Category
                
                Fiscal
                  2009
                  Fees
                
                
                Fiscal
                  2008
                  FeesAudit Fees(a)
                
                $
                577,287
                
                
                $
                358,614Audit-Related
      Fees(b)
                
                $
                
                
                
                $Tax
      Fees(c)
                
                $
                47,000
                
                
                $
                7,546All
      Other Fees(d)
                
                $
                36,935
                
                
                $
                60,962Total
      Fees
                
                $
                661,222
                
                
                $
                427,121





(a)
            AUDIT
      FEES. Consists of fees billed for professional services rendered for the
      audit of Global Resource Corporation’s consolidated financial statements
      and review of the interim consolidated financial statements included in
      quarterly reports and services that are normally provided by principal
      accountants in connection with statutory and regulatory filings or
      engagements.





(b)
            AUDIT-RELATED
      FEES. Consists of fees billed for assurance and related services that are
      reasonably related to the performance of the audit or review of Global
      Resource Corporation 's consolidated financial statements and are not
      reported under "Audit Fees".





(c)
            TAX
      FEES. Consists of fees billed for professional services for tax
      compliance, tax advice and tax
planning.





(d)
            ALL
      OTHER FEES. Consists of fees for products and services other than the
      services reported above. There were no management consulting services
      provided in fiscal 2009 or 2008.





Audit
Committee Pre-Approval Policies and Procedures





Our Audit Committee’s policy is to
pre-approve all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, audit-related
services, tax services and other services. Pre-approval is generally provided
for up to one year and any pre-approval is detailed as to the particular service
or category of services and is generally subject to a specific budget. The
independent auditors and management are required to periodically report to the
Company's Audit Committee regarding the extent of services provided by the
independent auditors in accordance with this pre-approval, and the fees for the
services performed to date. The Audit Committee may also pre-approve particular
services on a case-by-case basis.





Part
IV





Item
15. Exhibits, Financial Statement Schedules





(a)  We
set forth below a list of our audited financial statements included in Item 8 of
this annual report on Form 10-K.


58





Statement
                      
                      Page*Index
      to Financial Statements
                      
                      F-1Report
      of Independent Registered Public Accounting Firm
                      
                      F-2Balance
      Sheets
                      
                      F-5Statements
      of Operations
                      
                      F-6Statement
      of Changes in Stockholder’s Equity (Deficit)
                      
                      F-7Statements
      of Cash Flows
                      
                      F-13Notes
      to Financial Statements
                      
                      F-14





*Page F-1
follows page 31 to this annual report on Form 10-K.





(b) Index
to Exhibits required by Item 601 of Regulation S-K.





3.1
              
              Articles
      of Incorporation of the Company, filed as Exhibit 3.1 to Amendment No. 5
      to the Company’s Registration Statement on Form S-1, SEC File Number
      333-149199 and incorporated herein by this reference.3.2
              
              Certificate
      of Designations, filed with the State of Nevada on May 28,
      20103.3
              
              Amended
      and Restated By-laws of the Company, incorporated herein by reference to
      Exhibit 3.2(iii) to Amendment No. 1 to the Company’s Registration
      Statement on Form S-1, SEC File Number 333-151584, filed October 22,
      2008.4.6
              
              Form
      of Carbon Recovery Acquisition Class B Warrant dated September 26, 2006,
      incorporated herein by reference to Exhibit 4.6 to the Registration
      Statement on Form S-1, SEC File Number 333-152118, filed on July 3, 2008
      (the “152118 Registration Statement”).4.6.1
              
              Form
      of Carbon Recovery Acquisition Class D Warrant dated September 26, 2006,
      incorporated herein by reference to Exhibit 4.6.1 to the 152118
      Registration Statement.4.6.2
              
              Form
      of Carbon Recovery Acquisition Class E Warrant dated September 26, 2006,
      incorporated herein by reference to Exhibit 4.6.2 to the 152118
      Registration Statement.4.6.11
              
              Form
      of directors warrant, incorporated herein by reference to Exhibit 4.6.11
      to the POOF Registration Statement.4.7
              
              2008
      Employees Compensation Plan, incorporated herein by reference to Exhibit
      10.7 to the Company's Registration Statement on Form S-8, SEC File Number
      333-148916, filed on January 29, 2008.4.8
              
              Warrant
      Issuance Resolution with respect to the CRC Acquisition Warrants,
      incorporated herein by reference to Exhibit 4.3 to the Company’s Form 8-K
      filed on September 27, 2006.4.9
              
              Amendment
      to the CRC Class B Acquisition Warrant, incorporated herein by reference
      to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on
      November 20, 2008.4.10
              
              Amendment
      to the CRC Class D Acquisition Warrant, incorporated herein by reference
      to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on
      November 20, 2008.4.11
              
              Amendment
      to the CRC Class E Acquisition Warrant, incorporated herein by reference
      to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on
      November 20, 2008.4.12
              
              Amendment
      to the Mobilestream Acquisition Warrants, incorporated herein by reference
      to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on
      November 20, 2008.4.13
              
              2008
      Incentive Stock Option Plan, incorporated herein by reference to the
      Exhibit to the Company’s Proxy Statement on Form 14A filed on April
      23, 2008.


59




10.1
              
              Agreement
      and Plan of Reorganization dated as of October 29, 2003, by and between
      Advanced Healthcare Technologies, Inc. and Nutratek, Ltd., incorporated
      herein by reference to Exhibit 99 to the Company's Current Report on Form
      8-K filed on January 12, 2004.10.2
              
              Articles
      of Merger by and between E-mail Mortgage.com, Inc. and Mariner Health
      Care, Inc. dated as of July 29, 2002, incorporated herein by reference to
      Exhibit 3(i) to the Company’s Registration Statement on Form 8-A, filed
      September 17, 2004.10.3
              
              Operating
      Agreement dated as of January 11, 2005 by and between Global Resource
      Corporation and Well Renewal, LLC , incorporated herein by reference to
      Exhibit 10.1 to the Company's Current Report on Form 8-K, dated September
      17, 2004, filed on February 23, 2005.10.4
              
              Agreement
      and Plan of Reorganization dated as of July 26, 2006 by and between Global
      Resource Corporation and Carbon Recovery Corporation, incorporated herein
      by reference to Exhibit 10.6 to the Company’s Registration Statement on
      S-1 filed on July 3, 2008 (File No: 152118).10.5
              
              Carbon
      Recovery Corporation Liquidating Trust Agreement made September 22, 2006
      between Carbon Recovery Corporation and Olde Monmouth Stock Transfer Co.,
      Inc. as Trustee, incorporated herein by reference to Exhibit 10.6.1 to the
      Company’s Registration Statement on S-1 filed on July 3, 2008 (File No:
      152118).10.6
              
              Combined
      Technology Agreement dated September 22, 2006 by and among the Company,
      Carbon Recovery Corporation, Frank G. Pringle, Lois Augustine Pringle, and
      Mobilestream Oil Corporation, incorporated herein by reference to Exhibit
      10.10 to the Registration Statement on S-1 filed on July 3, 2008 (File No:
      152118).10.7
              
              Plan
      and Agreement of Reorganization dated as of November 28, 2006 by and
      between the Company and Mobilestream Oil Corporation, incorporated herein
      by reference to Exhibit 10.11 to the Registration Statement on S-1 filed
      on July 3, 2008 (File No: 152118).10.8
              
              Mobilestream
      Liquidating Trust Agreement made December 29, 2006 between Mobilestream
      Oil, Inc. and Olde Monmouth Stock Transfer Co., Inc. as Trustee,
      incorporated herein by reference to Exhibit 10.11.1 to
  the10.9
              
              Registration
      Statement on S-1 filed on July 3, 2008 (File No:
  152118).10.10
              
              Reserve
      Equity Financing Agreement, dated November 24, 2009, by and between the
      Company and AGS Capital Group, LLC, filed as Exhibit 10.1 to the Company’s
      Form 8-K filed on December 1, 2009 and incorporated herein by this
      reference.10.11
              
              Registration
      Rights Agreement, by and between the Company and AGS Capital Group, LLC,
      filed as Exhibit 10.2 to the Company’s Form 8-K filed on December 1, 2009
      and incorporated herein by this reference.10.12
              
              Marketing
      Agreement, dated February 4, 2008 by and between the Company and C6
      Engineering Pty LTD.10.13
              
              Consulting
      agreement dated as of January 1, 2008 by and between 888 Corporation
      (controlled by Frank Pringle) and the Company, incorporated herein by
      reference to Exhibit 10.16 to the 152118 Registration
      Statement.10.14
              
              Settlement
      agreement dated as of January 15, 2008 by and among Global Resource
      Corporation, Patrick F. Hogan, Terence Taylor, Tomahawk Trading Corp., and
      Frank G. Pringle, incorporated herein by reference to Exhibit 10.17 to the
      152118 Registration Statement.10.15
              
              Employment
      agreement dated as of November 7, 2007 by and between Jeffrey T. Kimberly
      and the Company, incorporated herein by reference to Exhibit 10.18 to the
      152118 Registration Statement.10.16
              
              Consultant
      agreement dated as of November 26, 2007 by and between the Company and
      Worldwide Strategic Partners, Inc., incorporated herein by reference to
      Exhibit 10.19 to the POOF Registration
  Statement.


60





10.17
              
              Consultant
      agreement dated as of May 26, 2008 by and between the Company and
      Worldwide Strategic Partners, Inc. , incorporated herein by reference to
      Exhibit 10.20 to the POOF Registration Statement.10.18
              
              Investor
      Relations Agreement dated as of September 8, 2008 by and between the
      Company and Paul J. Sweeney, incorporated herein by reference to Exhibit
      10.21 to the POOF Registration Statement.10.19
              
              Stock
      Redemption Agreement dated as of August 13, 2008 by and between the
      Company and Frank G. Pringle, , incorporated herein by reference to
      Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on August
      18, 2008.10.20
              
              Term
      sheet employment agreement dated September 23, 2008 by and between the
      Company and Wayne Koehl, incorporated herein by reference to Exhibit 10.1
      to the Company’s September 26, 2008 Current Report on Form
      8-K.10.21
              
              Term
      sheet employment agreement dated September 23, 2008 by and between the
      Company and Jeffrey T. Kimberly, incorporated herein by reference to
      Exhibit 10.2 to the Company’s September 26, 2008 Current Report on Form
      8-K.10.22
              
              Term
      sheet employment agreement dated September 23, 2008 by and between the
      Company and Jeffrey A. Andrews, incorporated herein by reference to
      Exhibit 10.3 to the Company’s September 26, 2008 Current Report on Form
      8-K.10.23
              
              Summary
      of Terms of Proposed Employment Agreement (undated) by and between the
      Company and Eric Swain, incorporated herein by reference to Exhibit 10.1
      to the Company's Current Report on Form 8-K, dated September 24, 2008,
      filed on October 2, 2008.10.24
              
              Form
      of confidentiality agreement between the Company and each director,
      incorporated herein by reference to Exhibit 10.2 to the Company's
      quarterly report on Form 10-Q for the quarter ended September 30, 2008
      filed on  November 12, 2008 (the "September 30, 2008 Form
      10-Q").10.25
              
              Form
      of confidentiality agreement between the Company and each executive
      officer, incorporated herein by reference to Exhibit 10.3 to the
      Company’s  September 30, 2008 Form 10-Q.10.26
              
              Consulting
      Agreement entered into October 1, 2008 with LP (Origination) Limited,
      incorporated herein by reference to Exhibit 10.5 to the
      Company’s  September 30, 2008 Form 10-Q.10.27
              
              Option
      Agreement dated October 14, 2008 between the Company and Eric Swain,
      incorporated herein by reference to Exhibit 10.6 to the
      Company’s  September 30, 2008 Form 10-Q.10.28
              
              Rescission
      Agreement dated as of September 30, 2008 between the Company and Wayne
      Koehl, incorporated herein by reference to Exhibit 10.7 to the
      Company’s  September 30, 2008 Form 10-Q.10.29
              
              Severance
      Agreement dated as of November 12, 2008 between the Company and Frank G.
      Pringle, incorporated herein by reference to Exhibit 10.1 to the Company's
      Current Report on Form 8-K filed on November 17, 2008.10.30
              
              Agreement
      and General Release, entered into between the Company and Wayne J. Koehl
      on April 27, 2009, incorporated herein by reference to Exhibit 10.33 to
      Amendment No. 4 to the Company's Registration Statement on Form S-1, File
      Number 333-149199, filed on July 14, 2009.10.31
              
              Consulting
      Agreement, entered into between the Company and LP (Origination) Limited
      on May 11, 2009, incorporated herein by reference to Exhibit 10.34 to
      Amendment No. 4 to the Company's Registration Statement on Form S-1, File
      Number 333-149199, filed on July 14, 2009.10.32
              
              Joint
      Development Agreement, dated April 23, 2009, by and among Global Heavy Oil
      Corporation, Schlumberger Technology Corporation and Schlumberger Holdings
      Limited, incorporated herein by reference to Exhibit 10.1 to the Company's
      Current Report on Form 8-K/A filed on August 5,
  2009.


61





10.33
                  
                  Amendment
      to Severance Agreement, entered into between the Company and Frank G.
      Pringle on September 29, 2009, filed as Exhibit 10.38 to Amendment No .6
      to the Company’s Registration Statement on Form S-1 filed on January 22,
      2010 and incorporated herein by this reference.10.34
                  
                  Settlement
      Agreement and Release, entered into between the Company and Eric Swain on
      October 2, 2009, filed as Exhibit 10.39 to Amendment No .6 to the
      Company’s Registration Statement on Form S-1 filed on January 22, 2010 and
      incorporated herein by this reference.10.35
                  
                  Amendment
      to the Swain Settlement Agreement, dated January 26,
  2010.10.36
                  
                  Consulting
      Services Agreement, dated as of January 1, 2010, between the Company and
      Brian Ettinger, incorporated herein by reference to Exhibit 10.1 to the
      Company's Current Report on Form 8-K filed on January 8,
    2010.10.37
                  
                  Consulting
      Services Agreement, dated as of July 16, 2010, between the Company and
      Brian Ettinger, filed as Exhibit 10.3 to the Company's Current Report on
      Form 8-K filed on July 22, 2010 and incorporated herein by this
      reference.10.38
                  
                  Agreement
      and Indemnity by and between the Company and Brian Ettinger, dated July
      16, 2010, filed as Exhibit 10.1 to the Company's Current Report on Form
      8-K filed on July 22, 2010 and incorporated herein by this
      reference.10.39
                  
                  Consulting
      Services Agreement, dated February 9, 2010 by and between the Company and
      Jeffrey Andrews.10.40
                  
                  License
      Agreement, dated as of October 14, 2009, between Global Resource
      Corporation and Universal Alternative Fuels, Inc., incorporated by
      reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
      filed on October 20, 2009.10.41
                  
                  Amendment
      Number 1 to License Agreement, dated as of October 14, 2009, between
      Global Resource Corporation and Universal Alternative Fuels, Inc.,
      incorporated by reference to Exhibit 10.2 to the Company's Current Report
      on Form 8-K filed on October 20, 2009.10.42
                  
                  Security
      Agreement, dated as of October 14, 2009, between Global Resource
      Corporation and Universal Alternative Fuels, Inc., incorporated by
      reference to Exhibit 10.3 to the Company's Current Report on Form 8-K
      filed on October 20, 2009.10.43
                  
                  Purchase
      Order, issued October 14, 2009, by Universal Alternative Fuels, Inc. to
      Global Resource Corporation, incorporated by reference to Exhibit 10.4 to
      the Company's Current Report on From 8-K filed on October 20,
      2009.10.44
                  
                  Mutual
      Release, dated July 1, 2010, by and between the Company and Jonathan Simon
      filed as Exhibit 10.2 to the Company’s Form 8-K/A filed on July 22, 2010
      and incorporated herin by this reference.10.45
                  
                  Mutual
      Release, dated July 1, 2010 by and between the Company and Kim O’Brien
      filed as Exhibit 10.1 to the Company’s Form 8-K/A filed on July 22, 2010
      and incorporated herein by this reference.10.46
                  
                  Mutual
      Release, dated July 16, 2010 by and between the Company and Brian
      Ettinger, filed as Exhibit 10.2 to the Company’s Form 8-K filed on July
      22, 2010 and incorporated herein by this reference.14.1
                  
                  Code
      of Ethics, incorporated herein by reference to Exhibit 14.1 to Company's
      Current Report on Form 8-K filed on May 20, 2008.21.1
                  
                  Subsidiaries
      of the Company, incorporated herein by reference to Exhibit 21.1 to
      Amendment No. 4 to the Company's Registration Statement on Form S-1, File
      Number 333-149199, filed on July 14,
2009.




62


SIGNATURES





In accordance with Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





GLOBAL
      RESOURCE CORPORATIONDated:
      December  27, 2010
                  By:
                  /s/  Ken
  KinsellaKen
      KinsellaPresident
      and DirectorPrincipal
      Executive OfficerPrincipal
      Financial OfficerPrincipal
      Accounting
Officer





In accordance with Section 13 or 15(d)
of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Dated:
      December  27, 2010
              By:
              /s/ Paul J. SweenyPaul
      J. SweeneyDirectorDated:
      December  27, 2010
              By:
              /s/ Edward SzoferEdward
      SzoferDirectorDated:
      December  27, 2010
              By:
              /s/ David AmesDavid
      AmesDirectorDated:
      December  27, 2010
              By:
              /s/Ken KinsellaKen
      KinsellaChief
      Executive Officer and
                Director




63