Balance Sheets (Parenthetical) (USD $)
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Jun. 30, 2011
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Dec. 31, 2010
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Stockholders' Deficit | Â | Â |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 500,000,000 | 500,000,000 |
Common stock, Issued | 93,224,444 | 93,224,444 |
Common stock, outstanding | 93,224,444 | 93,224,444 |
Statements of Operations (Unaudited) (USD $)
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3 Months Ended | 6 Months Ended | 21 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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|
Income Statement [Abstract] | Â | Â | Â | Â | Â |
Revenues | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Operating Expenses | Â | Â | Â | Â | Â |
General and administrative | 35,280 | 55,484 | 63,633 | 90,627 | 243,984 |
Total operating expenses | 35,280 | 55,484 | 63,633 | 90,627 | 243,984 |
Other Expense | Â | Â | Â | Â | Â |
Interest and penalties | 0 | 0 | 0 | 0 | 73,211 |
Net loss from continuing operations | (35,280) | (55,484) | (63,633) | (90,627) | (317,195) |
Net Loss | $ (35,280) | $ (55,484) | $ (63,633) | $ (90,627) | $ (317,195) |
Net Loss per Share | $ (0.001) | $ (0.001) | $ (0.001) | $ (0.001) | Â |
Per Share Information: | Â | Â | Â | Â | Â |
Weighted average number of common shares outstanding Basic and Diluted | 93,224,444 | 93,224,444 | 93,224,444 | 93,224,444 | Â |
Document and Entity Information (USD $)
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6 Months Ended | |
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Jun. 30, 2011
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Aug. 15, 2011
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Document And Entity Information | Â | Â |
Entity Registrant Name | MOMENTUM BIOFUELS, INC. | Â |
Entity Central Index Key | 0000813718 | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | Â |
Current Fiscal Year End Date | --12-31 | Â |
Is Entity a Well-known Seasoned Issuer? | No | Â |
Is Entity a Voluntary Filer? | No | Â |
Is Entity's Reporting Status Current? | Yes | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Public Float | Â | $ 411,487 |
Entity Common Stock, Shares Outstanding | Â | 93,224,444 |
Document Fiscal Period Focus | Q2 | Â |
Document Fiscal Year Focus | 2011 | Â |
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Going Concern
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
Going Concern |
Momentum has incurred significant losses from operations since inception and has limited financial resources. These factors raise substantial doubt about Momentum's ability to continue as a going concern. Momentum's financial statements for the three and six month ended June 30, 2011 have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company currently has an accumulated deficit of $19,135,592 and an accumulated deficit during development stage of $317,195 at June 30, 2011. Momentum's ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and, ultimately, achieve profitable operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
Organization and Basis of Operation
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
Organization and Basis of Operation |
The accompanying unaudited financial statements include the accounts of Momentum Biofuels, Inc. (the Company), a Colorado corporation and its wholly-owned subsidiary, Momentum Biofuels, Inc., a Texas corporation ("Momentum -Texas").
On August 21, 2009, Momentum Biofuels, Inc. ("Momentum-Texas"), a Texas corporation, entered into an Agreement with Hunt Global Resources, Inc. ("Hunt"), under the terms of which Hunt agreed to assume the obligations of Momentum-Texas and Momentum Biofuels, Inc., a Colorado corporation ("Momentum-Colorado") through the assignment of a certain Senior Secured Promissory Note in the amount of $600,000 issued by Momentum-Colorado to a group of investors arranged by Bathgate Capital Partners, LLC, of Denver, Colorado. Hunt further agreed to assume Momentum-Texas obligations under a sub-lease agreement between Momentum-Texas and Brand Infrastructure and Services, Inc., including all past due rent, assessments, and other charges related to the property covered by the sub-lease agreement, all in exchange for a conveyance of all of the right title and interest of Momentum-Texas, in and to all of its physical assets, including the biodiesel plant located in Pasadena, Texas and all intellectual property, processes, techniques and formulas for creating Biofuels and related products.
Further, Momentum-Texas entered into a License Agreement with Hunt, which provided that in exchange for a grant of a license to use, improve, sublicense and commercialize the intellectual property described in the Agreement, in exchange for an agreement by Hunt to pay to Momentum-Texas, a royalty of 3% of the gross and collected revenue received by Hunt from the sale of bio-diesel and related products and from revenues received by Hunt from its proposed Commercial Sand business. Momentum-Texas assigned its rights to receive the royalty described in the License Agreement to its parent, Momentum-Colorado in exchange for common shares of Momentum-Colorado equal to 39% of the issued and outstanding stock at such date, or 40,000,000 shares, whichever sum is greater. Such shares were to be issued by Momentum-Colorado as fully paid, non-assessable and subject to a non-dilution agreement in favor of Hunt.
On October 9, 2009, the agreements between Hunt, Momentum-Texas and Momentum-Colorado were consummated upon the execution of additional agreements and the issuance of the shares of common stock by Momentum-Colorado to Hunt on December 31, 2009. |
Equity Transactions
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
Equity Transactions |
During the six months ended June 30, 2011,Momentum did not issue any shares of its common stock. |
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Related Party Transactions
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
Related Party Transactions |
During the six months ended June 30, 2011 and 2010, Hunt Global Resources, Inc., the Company's majority shareholder, advanced funds to the Company totaling $25,750 and $117,537, respectively to support its legal and accounting functions. These funds are unsecured, non interest bearing and due on demand. The Company has Advances-related party balances of $230,086 and $204,336 as of June 30, 2011 and December 31, 2010, respectively. |
Litigation
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6 Months Ended |
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Jun. 30, 2011
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Notes to Financial Statements | Â |
Litigation |
Jason Gehrig v. Momentum Biofuels, Inc. filed in the District Court of Harris County, Texas. - This lawsuit involves a claim for breach of an employment contract. Depositions were completed over a year ago and there has been no activity in this litigation since.
Harris County Tax Authority v. Momentum Biofuels, Inc. filed in the District Court of Harris County, Texas. - This suit involves a claim for property taxes in the amount of approximately $88,600. The Company has been negotiating a payment plan and expects to be able to pay the taxes due from royalties and licensing fees.
Stuart Cater and James O'Neil v. Momentum Biofuels, Inc. filed in the District Court of Harris County, Texas. - This suit involves a claim for payment under the terms of employment settlement agreements. The issues were the subject of arbitration in mid-2009 which resulted in an award of $52,500 for each of the claimants and attorney's fees of $30,000. Arbitration award was reduced to a judgment and a Receiver was appointed to collect the judgment.
Quality Carriers, Inc. v. Momentum Biofuels, Inc. filed in the District Court of Harris County, Texas. - This suit involves a claim for rental fees for tank trailers in the amount of $19,000 and seeks legal fees in the amount of $6,335.
LaPorte Independent School District v. Momentum Biofuels, Inc. - This suit involves a claim for property taxes on behalf of the school district and the Clear Lake City Water Authority in the amount of approximately $108,500. The litigation is pending in the District Court of Harris County, Texas.
American National Insurance Company v. Momentum Biofuels, Inc. in connection with a breach of an office lease agreement. A default judgment was entered in this case in the amount of $261,294 together with attorney's fees of $6,627. |
Statements of Cash Flows (Unaudited) (USD $)
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6 Months Ended | 21 Months Ended | |
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Cash Flows from Operating Activities | Â | Â | Â |
Net loss | $ (63,633) | $ (90,627) | $ (317,195) |
Adjustments to reconcile net loss to cash used in operating activities | Â | Â | Â |
Accounts payable | 55,383 | (20,410) | 98,010 |
Accrued expenses | (17,500) | (6,500) | 0 |
Net Cash (Used) in Operating Activities | (25,750) | (117,537) | (219,185) |
Cash Flows from Financing Activities | Â | Â | Â |
Advances from shareholder | 25,750 | 117,537 | 214,619 |
Net Cash Provided by Financing Activities | 25,750 | 117,537 | 214,619 |
Net (Decrease) increase in Cash | 0 | 0 | (4,566) |
Cash and cash equivalents - Beginning of period | 0 | 0 | Â |
Cash and cash equivalents - End of period |
Summary of Significant Accounting Policies
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Notes to Financial Statements | Â | |||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
Basis of Presentation
Interim Presentation
The accompanying unaudited interim financial statements of Momentum Biofuels,Inc. (the Company), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in Momentum's Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for the year ended December 31, 2010, as reported in the Form 10-K have been omitted.
Development Stage Company
The Company has returned to a development stage company due to the change of business plan and strategies on August 21, 2009. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Company." Therefore, the Company's financial statements of operations, stockholders' equity (deficit) and cash flows disclose activity since the date of the Company's entry into the development stage.
The Company after the disposal of its prior operating activities purchased by Hunt Group has changed its operational focus to being an intellectual property company owning specific royalty agreements as its sole source of revenue. It is the intent of management to pursue additional royalty and licensing agreements in the furtherance of its business objectives to maximize shareholder value and profitability. Management is also considering other opportunities in other non-related businesses. No agreements have been entered into at the time of this filing.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Momentum and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Our significant estimates primarily relate to the assessment of warrants and debt and equity transactions and the estimated lives and methods used in determining depreciation of fixed assets. Actual results could differ from those estimates.
Revenue Recognition
Momentum recognizes revenue from product sales when the products are shipped or delivered and the title and risk pass to the customer. Provisions for any product returns or discounts given to customers are accounted for as reductions in revenues in the same period revenues are recorded.
Share-Based Compensation
Momentum measures all share-based payments, including grants of employee stock options, using a fair-value based method. The cost of services received in exchange for awards of equity instruments is recognized in the statement of operations based on the grant date fair value of those awards amortized over the requisite service period. Momentum utilizes a standard option pricing model, the Black-Scholes model, to measure the fair value of stock options granted.
Income Taxes
Momentum and its subsidiary file a consolidated federal tax return. Momentum uses the asset and liability method in accounting for income taxes. Deferred tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, and are measured using the tax rates expected to be in effect when the differences reverse. Deferred tax assets are also recognized for operating loss and tax credit carry forwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is used to reduce deferred tax assets when uncertainty exists regarding their realization.
Net Loss per Common Share
Basic net loss per common share is calculated by dividing the net loss applicable to common shares by the weighted average number of common and common equivalent shares outstanding during the period. For the six months ended June 30, 2011 and 2010, there were no potential common equivalent shares used in the calculation of weighted average common shares outstanding as the effect would be anti-dilutive because of the net loss.
Concentration of Credit Risk
At various times during the year, Momentum may have bank deposits in excess of the FDIC insurance limits. Momentum has not experienced any losses from maintaining cash accounts in excess of the federally insured limit. Management believes that it is not exposed to any significant credit risk on cash accounts.
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements through ASU 2011-05 and believes that none of them will have a material effect on the Company's financial statements. |
Balance Sheets (USD $)
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Jun. 30, 2011
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Dec. 31, 2010
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ASSETS | Â | Â |
Total Assets | $ 0 | $ 0 |
Accounts payable | 1,911,859 | 1,856,576 |
Accrued expenses | 0 | 17,500 |
Advances - related parties | 230,086 | 204,336 |
Total Current Liabilities | 2,142,045 | 2,078,412 |
Total Liabilities | 2,142,045 | 2,078,412 |
Stockholders' Deficit | Â | Â |
Common stock, $0.01 par value; 500,000,000 shares authorized, 93,224,444 and 932,224,444 shares issued and outstanding on June 30, 2011 and December 31, 2010, respectively | 932,444 | 932,244 |
Additional paid-in capital | 16,378,498 | 16,378,498 |
Accumulated Deficit | (19,135,592) | (19,135,592) |
Deficit accumulated during development stage | (317,195) | (253,562) |
Total Stockholders' Deficit | (2,142,045) | (2,078,412) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 0 | $ 0 |