10K P39: The negative gross profit related to

10K

P39:

The negative gross profit related to our fuel sales of $62,397 is due primarily to the processing of a significant amount of heat transfer fluid that we were able to secure in large volumes and allowed us to maximize our processor up-time and revenues primarily in September and October 2012. Management believes this was an important and necessary step to provide us with key production data as we continue to enhance our production roll-out strategies. Our long term strategy regarding this material is to identify sources and channels at a significantly lower cost than we paid during this time period, in order to not only maximize revenues and processor up-time, but also to maximize our gross profit. Additionally, with the increase in plastic to be processed both at our recycling facility and at our Niagara Falls facility in late 2012, we experienced some challenges in logistics, processing times and storage while managing the increase in volumes of plastic to be processed.

My take: HTF is being used to even out the flow. It’s a buffer. An uneven flow causes issues. They are working on how to move plastic fast enough. HTF is a downtime/maintenance saver.

F-15:

NOTE 4 - INVENTORIES

Inventories at December 31 consist of the following:

Raw materials $ 222,642

My take: Raw materials are probably HTF and paid for plastic. Free plastic cannot be counted??

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT

Construction in process 1,780,613

???????????? P3 and tanks?