Document:

ex10-42.htm

    
      

      

    

    Exhibit
10.42

    

    

    UNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     

    On
November 13, 2009, Registrant entered into a Stock Purchase
Agreement  ("Agreement") with United States Environmental Response,
LLC, a California limited liability company (“Seller”) pursuant to which the
Registrant has purchased all of the issued and outstanding capital stock of
California Living Waters, Incorporated ("CLW"), a privately held
company.  CLW owns all of the issued and outstanding capital stock of
Santa Clara Waste Water Company (SCWW") a California corporation. CLW's only
operating subsidiary is SCWW. The Agreement is subject to a rescission if
Registrant does not pay certain indebtedness to its senior lender by close of
business on March 12, 2010.

    

    SCWW,
located in Ventura County, California, is a waste water management company with
that operates a 12.7 mile pipeline from its facility to the City of Oxnard'
water reclamation center. In consideration for the sale, GEM issued six
promissory notes (individually a "Note" and collectively, the "Notes") in the
aggregate principal amount of $9,003,000, and warrants to purchase 425,000
shares of GEM's common stock. The Company valued the warrants at
$105,000 using a Black - Scholes option pricing model. For the Black - Scholes
calculation, the Company assumed no dividend yield, a risk free interest rate of
4.78%, expected volatility of 115% and an expected term for the warrants of
10 years. The Notes bear interest at 6.5 per cent per annum. Two of the
Notes, totaling $3,778,000 are convertible into a total of 15% of GEM's common
stock on a fully diluted basis. The Notes have the following payment
provisions:

    

    $2,000,000
Seller's Note-- Payment of the outstanding principal of the Seller's Note is due
and payable in four (4) installments as follows: (A) Two Hundred Fifty Thousand
Dollars ($250,000) plus accrued interest before March 12, 2010, (B) Five Hundred
Thousand Dollars ($500,000) and accrued interest on June 30 2010; (C) One
Million Dollars ($1,000,000) and accrued interest on January 1, 2011 (D) the
balance of all residual principal and accrued interest on March 31,
2011.

    

    $1,700,000
Note One-- Payment of the outstanding principal of Note One is due and payable
in 120 installments commencing on December 1, 2009 and continuing on the first
day of each calendar month through February 1, 2019.  Installments are
payable in the following amounts (subject
to the other terms of this Note): (A) the amount of principal and accrued
interest payable in the first one hundred nineteen (119) Installments shall be
equal Installments of principal and interest, calculated on the basis of a
30-year amortization of this Note and (B) the one hundred twentieth (120th)
Installment shall be a final, “balloon” payment.

    

    $1,100,000
Note Two-- Payment of the outstanding principal of this Note Two is be due and
payable in sixty (60) installments commencing on December 1, 2009 and continuing
on the first day of each calendar month through November 1, 2014. Installments
are payable in the following amounts (subject to the other terms of this Note):
(A) the amount of principal and accrued interest payable in the first fifty-nine
(59) Installments shall be equal Installments of principal and interest,
calculated on the basis of a 30-year amortization of this Note; and (B) the
final, “balloon” payment on November 1, 2014.

     

    $424,000
Note Three-- Payment of the outstanding principal of this Note shall be due and
payable in 120 installments commencing on December 1, 2009 and continuing on the
first day of each calendar month through November 1,
2019.  Installments are payable in the following amounts (subject to
the other terms of this Note): (A) the amount of principal and accrued interest
payable in the first one hundred nineteen (119) Installments shall be equal
Installments of principal and interest, calculated on the basis of a 30-year
amortization of this Note and (B) the one hundred twentieth (120th)
Installment shall be a final, “balloon”. Note Three is convertible at any time
in full or in part (but if in part, then only in principal increments of
$100,000 or an integral multiple thereof) into shares of common stock of
Registrant at the conversion rate of Four Dollars ($4.00) per share, subject to
adjustment.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    $1,600,000
Note Four-- Payment of the outstanding principal of this Note is due and payable
in 41 installments commencing on July 1, 2010 and continuing on the first day of
each calendar month through November 1, 2013. Installments are payable in the
following amounts (subject to the other terms of this Note): (A) the amount
of principal and accrued interest payable in the first forty Installments shall
be equal Installments of principal and interest, calculated on the basis of a
30-year amortization of this Note, provided that the first Installment shall
also include all interest accrued during the first seven months from the
date of this Note; Four and (B) the final, “balloon”, Installment shall be in
the amount of all then-outstanding principal, interest and other amounts then
outstanding. Note Four is convertible into 5% of the common stock of Registrant
on a fully diluted basis until Registrant achieves a Capital Restructuring Goal.
Capital Restructuring Goal means the concurrent fulfillment of each of the
following events: (i) the Seller’s Note shall have been fully paid on the terms
thereof as to all theretofore outstanding principal, interest, costs and
expenses; (ii) Registrant shall have available, as properly reflected in
Registrant’s books one million dollars ($1,000,000) in uncommitted working
capital (not including any working capital lines of credit); and (iii)
Registrant shall have invested into SCWW capital of at least one million dollars
$1,000,000.

     

    $2,178,000
Note Five-- Payment of the outstanding principal of this Note is due and payable
in 41 installments commencing on July 1, 2010 and continuing on the first day of
each calendar month through November 1, 2013. Installments are payable in the
following amounts (subject to the other terms of this Note): (A) the amount
of principal and accrued interest payable in the first forty Installments shall
be equal Installments of principal and interest, calculated on the basis of a
30-year amortization of this Note, provided that the first Installment shall
also include all interest accrued during the first seven months from the
date of this Note; Four and (B) the final, “balloon”, Installment shall be in
the amount of all then-outstanding principal, interest and other amounts then
outstanding. Note Four is convertible into 10% of the common stock of Registrant
on a fully diluted basis until Registrant achieves the Capital Restructuring
Goal.

     

    The
acquisition of CLW will be accounted for as a purchase in accordance and the
operations of the company will be consolidated with those of GEM as of October
1, 2009. The parties determined that the effective date of the acquisition
was September 30, 2009, the date of which GEM assumes all the
responsibility for any losses or profits that might be incurred during
the period. The results of CLW as of October 31, 2009 have been
combined in this pro forma with the September 30, 2009 results of the
Company.  The ten months’ operating results for CLW added to the nine
months’ results for the Company are representative on a pro forma basis of the
operating performance of the combined companies.  The $9.0 million
purchase price will be allocated as follows based upon the fair value of the
acquired assets, as determined by management.

     

    
      	
              Current
      assets and liabilities

            	 
      	
              $

            	
              428,392

            	 
      
	
              Intangibles,
      net

            	 
      	 
      	
              1,486,503

            	 
      
	
              Other
      non current assets

            	 
      	 
      	
              342,561

            	 
      
	
              Property
      and equipment

            	 
      	 
      	
              12,386,747

            	 
      
	
              Long
      term obligations, net of current portion

            	 
      	 
      	
              (5,536,203)

            	 
      
	
              Total

            	 
      	
              $

            	
              9,108,000

            	 
      

    

     

    The Company has not completed its valuation of the acquired assets
but believes most of the excess fair value of the acquired assets and
liabilities will be allocated to property and equipment and have been reflected
as such in the accompanying Pro Forma Balance Sheet. The valuation of the
acquired assets may change based upon final valuation.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    The
following unaudited pro forma combined balance sheet as of September 30, 2009
and the combined statements of operations for the nine months ended September
30, 2009 and for the year ended December 31, 2008 give effect to the acquisition
of CLW as if these transactions had been consummated on January 1, 2009 and
January 1, 2008.  The unaudited pro forma combined balance sheet as of
September 30, 2009 gives effect to the Merger Transaction and acquisition of CLW
as if it had occurred on September 30, 2009.

     

    The
unaudited condensed combined pro forma financial statements should be read in
conjunction with the historical financial statements.  The unaudited
pro forma financial statements are presented for illustrative purposes only and
are not necessarily indicative of future operating results or the results that
might have occurred if the exchange transaction had actually occurred on the
indicated date.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
       General Environmental Management, Inc. 

       Unaudited Pro Forma Consolidated Balance
Sheet 

       As of September 30, 2009 

      
         

        
          	   	   	
                   Historical 

                	   	   	
                   California Living Waters, Inc. and Subsidiary
      (b) 

                	   	   	
                   Pro Forma 

                   Adjustments (a) 

                	   	   	   	
                   Pro Forma 

                   Consolidated 

                	   
	
                   ASSETS 

                	   	   	   	   	   	   	   	   	   	    	   	   	   
	
                   Current assets: 

                	   	   	   	   	   	   	   	   	   	    	   	   	   
	
                   Cash 

                	   	 $ 	 39,676 	   	   	 $ 	 492,193 	   	   	 $ 	 - 	   	    	   	 $ 	 531,869 	   
	
                   Accounts receivable, net of allowance for doubtful
      accounts 

                	   	   	 2,989,745 	   	   	   	 1,331,224 	   	   	   	 - 	   	    	   	   	 4,320,969 	   
	
                   Prepaid expenses and current other
      assets 

                	   	   	 768,852 	   	   	   	 85,361 	   	   	   	 - 	   	    	   	   	 854,213 	   
	
                   Total current assets 

                	   	   	 3,798,273 	   	   	   	 1,908,778 	   	   	   	 - 	   	    	   	   	 5,707,051 	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   Property and equipment, net of accumulated
      depreciation 

                	   	   	 5,191,212 	   	   	   	 10,777,655 	   	   	   	   5,332,999 	   	
                   (c) 

                	   	   	 21,301,866 	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   OTHER ASSETS 

                	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   Restricted cash 

                	   	   	 900,039 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 900,039 	   
	
                   Intangibles, net 

                	   	   	 547,232 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 547,232 	   
	
                   Goodwill 

                	   	   	 84,505 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 84,505 	   
	
                   Permits and Franchises 

                	   	   	 - 	   	   	   	 1,486,503 	   	   	   	   	   	    	   	   	 1,486,503 	   
	
                   Deferred financing fees 

                	   	   	 369,015 	   	   	   	 162,854 	   	   	   	 - 	   	    	   	   	 531,869 	   
	
                   Other noncurrent assets 

                	   	   	 - 	   	   	   	 179,707 	   	   	   	   	   	    	   	   	 179,707 	   
	
                   Assets of discontinued
    operations 

                	   	   	 1,089,341 	   	   	   	   	   	   	   	   	   	    	   	   	 1,089,341 	   
	
                   Deposits 

                	   	   	 191,686 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 191,686 	   
	
                   Total assets 

                	   	 $ 	 12,171,303 	   	   	 $ 	 14,515,497 	   	   	 $ 	 5,332,999 	   	    	   	 $ 	 32,019,799 	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   Liabilities and Stockholders’
      Equity 

                	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   Current liabilities: 

                	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   Accounts Payable 

                	   	 $ 	 4,082,904 	   	   	   	 635,665 	   	   	   	 - 	   	    	   	   	 4,718,569 	   
	
                   Payable to related party 

                	   	   	 741,719 	   	   	   	   	   	   	   	 - 	   	    	   	   	 741,719 	   
	
                   Deferred rent 

                	   	   	 35,254 	   	   	   	   	   	   	   	 - 	   	    	   	   	 35,254 	   
	
                   Accrued expenses 

                	   	   	 2,405,394 	   	   	   	 128,233 	   	   	   	 - 	   	    	   	   	 2,533,627 	   
	
                   Accrued disposal costs 

                	   	   	 536,519 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 536,519 	   
	
                   Derivative liabilities 

                	   	   	 4,931,579 	   	   	   	   	   	   	   	   	   	    	   	   	 4,931,579 	   
	
                   Current portion of financing
      agreement 

                	   	   	 4,858,771 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 4,858,771 	   
	
                   Current portion of capital lease
      obligations 

                	   	   	 277,372 	   	   	   	   	   	   	   	   	   	    	   	   	 277,372 	   
	
                   Current portion of long-term
      obligations 

                	   	   	 - 	   	   	   	 716,488 	   	   	   	 698,908 	   	    	   	   	 1,415,396 	   
	
                   Total current liabilities 

                	   	   	 17,869,512 	   	   	   	 1,480,386 	   	   	   	 698,908 	   	    	   	   	 20,048,806 	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   LONG – TERM LIABILITIES 

                	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                   Financing agreement, net of current
      portion 

                	   	   	 5,425,678 	   	   	   	 - 	   	   	   	  - 	   	    	   	   	 5,425,678 	   
	
                   Long term obligations, net of current
      portion 

                	   	   	   1,758,473 	   	   	   	   3,736,203 	   	   	   	   8,304,092 	   	    	   	   	   13,798,768 	   
	
                   Capital lease obligations, net of current
      portion 

                	   	   	 734,430 	   	   	   	 - 	   	   	   	 - 	   	    	   	   	 734,430 	   
	
                   Deferred Income Taxes 

                	   	   	   	   	   	   	 2,659,932 	   	   	   	 (2,659,932 	 ) 	    	   	   	 - 	   
	
                   Subordinated related party notes
      payable 

                	   	   	 - 	   	   	   	 1,800,000 	   	   	   	   	   	    	   	   	 1,800,000 	   
	
                   Total long-term liabilities 

                	   	   	 7,918,581 	   	   	   	 8,196,135 	   	   	   	 5,644,160 	   	    	   	   	 21,758,876 	   
	
                   Stockholders’ equity
    (deficiency) 

                	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                       Common stock, $.001 par value,
      100,000,00 shares authorized 14,557,653 and 35,439 shares issued and
      outstanding 

                	   	   	 14,570 	   	   	   	 - 	   	   	   	   	   	    	   	   	 14,570 	   
	
                   Additional paid-in capital 

                	   	   	 54,450,995 	   	   	   	 4,946,236 	   	   	   	 (4,841,236 	 ) 	    	   	   	 54,555,995 	   
	
                   Retained earnings (accumulated
      deficit) 

                	   	   	 (68,082,355 	 ) 	   	   	 (107,260 	 ) 	   	   	 3,831,167 	   	    	   	   	 (64,358,448 	 ) 
	
                   Total stockholders’ equity 

                	   	   	 (13,616,790 	 ) 	   	   	 4,838,976 	   	   	   	 (1,010,069 	 ) 	    	   	   	 (9,787,883 	 ) 
	
                   Total liabilities and stockholders’ equity
      (deficiency) 

                	   	 $ 	 12,171,303 	   	   	 $ 	 14,515,497 	   	   	 $ 	  5,332,999 	   	    	   	 $ 	 32,019,799 	   

        

      

       

       Descriptions of Pro Forma eliminations: 

      

      
        	
                 (a)   

              	
                 To reflect acquisition of CLW by General
      Environmental Management, Inc. and allocation of purchase
      price.  

              

      

      

      
        	
                 (b)   

              	
                 For pro forma balance sheet presentation purposes at
      September 30, 2009, the Company has  included the historical
      balance sheet of California Living Waters Inc. as of October 31,
      2009.  Management has determined there are no significant
      differences between the periods that would effect the pro
      forma. 

              

      

      

      
        	
                 (c)   

              	
                 The allocation of purchase price includes the effect
      of recording a deferred income tax provision of $ 3,723,907 representing a
      non recurring charge directly attributable to the
      transaction. 

              

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

       General Environmental Management, Inc. 

       Unaudited Pro Forma Consolidated Statements of
Operations 

       For the nine months ended September 30,
2009 

       

      
        	    	   	
                 Historical 

              	   	   	
                 California Living Waters, Inc. and
      Subsidiary(c) 

              	   	   	
                 Pro Forma 

                 Adjustments 

              	   	    	   	
                 Pro Forma 

                 Consolidated 

              	   
	    	   	   	   	   	   	   	   	   	   	    	   	
                 (Unaudited) 

              	   
	
                 Revenue 

              	   	 $ 	 12,589,161 	   	   	 $ 	 5,291,866 	   	   	 $ 	 - 	   	    	   	   	 17,881,027 	   
	
                 Cost of revenue 

              	   	   	 12,906,589 	   	   	   	 3,650,472 	   	   	   	 62,671 	   	
                 (a) 

              	   	   	 16,619,732 	   
	
                 Gross profit 

              	   	   	 (317,428 	 ) 	   	   	 1,641,394 	   	   	   	 (62,671 	 ) 	    	   	   	 1,261,295 	   
	
                 Operating expenses 

              	   	   	 6,607,657 	   	   	   	 988,259 	   	   	   	   	   	    	   	   	 7,595,916 	   
	
                 Loss on sale of Property 

              	   	   	 - 	   	   	   	 305,129 	   	   	   	   	   	    	   	   	 305,129 	   
	
                 Operating  income
    (loss) 

              	   	   	 (6,925,085 	 ) 	   	   	 348,006 	   	   	   	 (62,671 	 ) 	    	   	   	 (6,639,750 	 ) 
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                 Other Income (Expense): 

              	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                 Interest income 

              	   	   	 19,403 	   	   	   	 413 	   	   	   	   	   	    	   	   	 19,816 	   
	
                 Interest and financing costs 

              	   	   	 (3,724,968 	 ) 	   	   	 (379,486 	 ) 	   	   	 (342,821 	 ) 	
                 (b) 

              	   	   	 (4,447,275 	 ) 
	
                 Gain (loss) on disposal of fixed
      assets 

              	   	   	 66,050 	   	   	   	 - 	   	   	   	   	   	    	   	   	 66,050 	   
	
                 Gain (loss) on derivative financial
      instruments 

              	   	   	 988,342 	   	   	   	 - 	   	   	   	   	   	    	   	   	 988,342 	   
	
                 Gain (loss) on extinguishment 

              	   	   	 (4,039,358 	 ) 	   	   	 - 	   	   	   	   	   	    	   	   	 (4,039,358 	 ) 
	
                 Other non- operating income 

              	   	   	 27,758 	   	   	   	 60 	   	   	   	   	   	    	   	   	 27,818 	   
	
                 Loss from operations 

              	   	   	 (13,587,858 	 ) 	   	   	 (31,007 	 ) 	   	   	 (405,492 	 ) 	    	   	   	 (14,024,357 	 ) 
	
                 Provision for income taxes 

              	   	   	 - 	   	   	   	 12,403 	   	   	   	 - 	   	    	   	   	 12,403 	   
	
                 Net Loss 

              	   	 $ 	 (13,587,858 	 ) 	   	 $ 	 (18,604 	 )  	   	 $ 	 (405,492 	 ) 	    	   	 $ 	 (14,011,954 	 ) 
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                 Net loss per common share, basic and
      diluted 

              	   	 $ 	  (1.02 	 ) 	   	   	   	   	   	   	   	   	    	   	 $ 	 (1.05 	 ) 
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	
                 Weighted average shares of common stock outstanding,
      basic and diluted 

              	   	   	 13,348,530 	   	   	   	   	   	   	   	   	   	    	   	   	 13,348,530 	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   
	    	   	   	   	   	   	   	   	   	   	   	   	   	    	   	   	   	   

      

       

       Descriptions of Pro Forma eliminations: 

      

      
        	
                 a)   

              	
                 The additional expense classified to Cost of Revenue
      includes additional depreciation related to the allocation of purchase
      price over the net assets acquired to fixed
  assets. 

              

      

       

      
        	
                 b)   

              	
                 Additional interest expense related to long term debt
      issued in conjunction with the purchase of California Living
      Waters. 

              

      

      
         

        
          	
                   c)   

                	
                   For pro forma statement of operations presentation
      purposes for the nine months ended September 30, 2009, the Company has
      included the historical statement of Operations of California Living
      Waters Inc. for the ten months ended October 31,
      2009.  Management has determined that the inclusion of the
      additional one month of operations has no significant effect the pro
      forma. 

                

        

         

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    
       General Environmental Management, Inc. 

       Unaudited Pro Forma Consolidated Statements
of  Operations 

       For the year ended December 31,
2008 

       

      
        	    	    	
                 Historical 

              	    	    	
                 California Living Waters, Inc. and
      Subsidiary 

              	    	   	
                 Pro Forma 

                 Adjustments 

              	    	    	    	
                 Pro Forma 

                 Consolidated 

              	    
	    	    	   	    	    	   	    	   	    	    	    	    	
                 (Unaudited) 

              	    
	
                 Revenue 

              	    	
                 $ 

              	
                 24,307,848 

              	    	    	
                 $ 

              	
                 7,615,880 

              	    	   	
                 $ 

              	
                 - 

              	    	    	    	
                 $ 

              	
                 31,923,728 

              	    
	
                 Cost of revenue 

              	    	    	
                 22,422,611 

              	    	    	    	
                 4,593,040 

              	    	   	    	
                 75,204 

              	    	
                 (a) 

              	    	    	
                 27,090,855 

              	    
	
                 Gross profit 

              	    	    	
                 1,885,237 

              	    	    	    	
                 3,022,840 

              	    	   	    	
                 (75,204 

              	
                 ) 

              	    	    	    	
                 4,832,873 

              	    
	
                 Operating expenses 

              	    	    	
                 7,658,639 

              	    	    	    	
                 1,992,184 

              	    	   	    	
                 - 

              	    	    	    	    	
                 9,650,823 

              	    
	
                 Operating income (loss) 

              	    	    	
                 (5,773,402 

              	
                 ) 

              	    	    	
                 1,030,656 

              	    	   	    	
                 (75,204 

              	
                 ) 

              	    	    	    	
                 (4,817,950 

              	
                 ) 

              
	    	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	
                 Other Income (Expense): 

              	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	
                 Interest income 

              	    	    	
                 17,569 

              	    	    	    	
                 - 

              	    	   	    	
                 - 

              	    	    	    	    	
                 17,569 

              	    
	
                 Interest and financing costs 

              	    	    	
                 (4,569,813 

              	
                 ) 

              	    	    	
                 (521,882 

              	
                 ) 

              	   	    	
                 (457,094 

              	
                 ) 

              	
                 (b) 

              	    	    	
                 (5,548,789 

              	
                 ) 

              
	
                 Other non- operating income 

              	    	    	
                 41,729 

              	    	    	    	
                 5,256 

              	    	   	    	
                 - 

              	    	    	    	    	
                 46,985 

              	    
	
                 Income (loss) before income
    taxes 

              	    	    	
                 (10,283,917 

              	
                 ) 

              	    	    	
                 514,030 

              	    	   	    	
                 (532,298 

              	
                 ) 

              	    	    	    	
                 (10,302,185 

              	
                 ) 

              
	
                 Provision for income taxes 

              	    	    	
                 - 

              	    	    	    	
                 (205,612 

              	
                 ) 

              	   	    	
                 205,612 

              	    	    	    	    	
                 - 

              	    
	
                 Net Income (loss) 

              	    	
                 $ 

              	
                 (10,283,917 

              	
                 ) 

              	    	
                 $ 

              	
                 308,418 

              	    	   	
                 $ 

              	
                 (326,686) 

              	    	    	    	
                 $ 

              	
                 (10,302,185 

              	
                 ) 

              
	    	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	
                 Net loss per common share, basic and
      diluted 

              	    	
                 $ 

              	
                 (.82 

              	
                 ) 

              	    	    	    	    	   	    	    	    	    	    	
                 $ 

              	
                 (.82 

              	
                 ) 

              
	    	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	    	    	    	    	    	    	    	    	    	   	    	    	    	    	    	    	    	    
	
                 Weighted average shares of common stock outstanding,
      basic and diluted 

              	    	    	
                 12,578,104 

              	    	    	    	    	    	   	    	    	    	    	    	    	
                 12,578,104 

              	    

      

       

       Descriptions of Pro Forma eliminations: 

      
        

        
          	
                   a)   

                	
                  

                     The additional expense classified to Cost of Revenue
      includes additional depreciation related to the allocation of purchase
      price over the net assets acquired to fixed
      assets. 

                  

                

        

         

        
          	
                   b)   

                	
                  

                     Additional interest expense related to long term debt
      issued in conjunction with the purchase of California Living
      Waters. 

                  

                

        

        
           

        

      

    

     

    6ex041.htm - Generated by SEC Publisher for SEC Filing

Exhibit 4.1                                            Form of Subscription Agreement

 

New Energy Technologies, Inc.

 

SUBSCRIPTION AGREEMENT

 

The Offer and Sale of up to 10,000,000 Shares of Common Stock In Accordance with the Prospectus Dated <>, 2010

 

Offering Price - $<> per share

 

            In order to purchase shares of common stock, $.001 par value per share (the “Shares”) of New Energy Technologies, Inc., a Nevada corporation (the “Company”), as described in, and in accordance with, the Prospectus dated _________, 2010 (the “Prospectus”) accompanying this Subscription Agreement, a prospective investor must complete and sign this Subscription Agreement.  

 

1.  Number of Shares subscribed for: ______________________________________________  

 

2.  Payment tendered (number of Shares subscribed for multiplied by $<>): _______________  

 

Payments can be made in cash or by check, bank draft or postal express money order payable to New Energy Technologies, Inc. or by wire transfer of funds as follows:

 

FORWARD THIS SUBSCRIPTION AGREEMENT TO NEW ENERGY TECHNOLOGIES, INC. AT:

 

3905 NATIONAL DRIVE

SUITE 110

BURTONSVILLE, MARYLAND 20866

Attention: President and Chief Executive Officer

 

In connection with the offer and sale of the Shares, the Company reserves the right, in its sole discretion, to reject any subscription in whole or in part for any reason whatsoever notwithstanding the tender of payment at any time prior to its acceptance of any subscriptions.

 

This Subscription Agreement does not constitute an offer to sell or a solicitation of any offer to buy any Shares by anyone in any jurisdiction in which such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.

  

The shares have not been registered in the State of Florida.  The sale of the shares pursuant to this Subscription Agreement in the State of Florida shall be voidable by the Purchaser within three days after the receipt of consideration from such purchaser by New Energy Technologies, Inc.   Florida residents hereby represent that they have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in New Energy Technologies, Inc. and they are able to bear the economic risk to such investment.

1

 

SIGNATURE PAGE TO THE NEW ENERGY TECHNOLOGIES, INC. 

SUBSCRIPTION AGREEMENT

 

 

 

 

_____________________________                          _____________________________  

Signature                                                                                 Date

 

____________________________                            _____________________________  

Print Name of Purchaser                                                         Soc. Sec. or Tax ID No.

 

___________________________________________________________________________  

Address for Delivery of Shares

 

___________________________________________________________________________

Telephone Number                                                                              Facsimile Number

 

 

____________________________________________________________________________

Email Address

 

 

2

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