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EEDG > SEC Filings for EEDG > Form 10-K on 15-Apr-2014All Recent SEC Filings

Show all filings for ENERGY EDGE TECHNOLOGIES CORP.

Form 10-K for ENERGY EDGE TECHNOLOGIES CORP.


15-Apr-2014

Annual Report


ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Plan of Operation

Our goal over the next twelve months is to direct maximum marketing efforts to develop greater markets and demand for our professional services and products.

We intend to focus on the following activities specific to EES:

Recruit and retain more employees, focusing on increasing our experienced sales team and strategic alliances.
Increase marketing initiatives that will further promote the business and its services.

Continue national expansion, becoming the premier service provider for full facility overhaul in the energy services industry.

Engage in mergers and acquisitions to grow the company

We intend to focus on the following activities specific to TGCC:

Develop three prototype restaurants in locations selected based on specific demographic data including:

a. competitor concepts and sales volumes

b. trade area profiles, including customer demographics, day-part occasions, concept density

c. emerging trade areas and developments

d. consumer foodservice DMA spending levels (comparative analysis)

e. local labor costs, unemployment levels and skill pools

Seed the market with Company units utilizing a "build and flip" strategy, selling the Company units to franchisees with additional development requirements while recouping the Company's initial investments plus turnkey fees.

Results of Operations

                 FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012



                                                         2013                   2012
CONTRACT REVENUES                                   $       2,040          $    452,304
CONTRACT COSTS                                              2,471               423,717
GROSS PROFIT                                                 (431 )              28,587


OPERATING EXPENSES
Compensation                                            1,078,255                26,089
Consulting services                                       298,393               449,826
Professional fees                                          74,253                45,791
Director fees                                               2,400                    -
General & administrative expenses                         206,305               289,733
TOTAL OPERATING EXPENSES                                1,659,606               811,439

LOSS FROM OPERATIONS                                   (1,660,037 )            (782,852 )

OTHER EXPENSE

Interest expense                                          (35,527 )                  -
Other expense                                                  -                 (1,274 )

Change in fair value of derivative liability              (70,217 )                  -
TOTAL OTHER EXPENSE                                      (105,744 )              (1,274 )

LOSS FROM OPERATIONS BEFORE NON-CONTROLLING
INTERESTS                                              (1,765,781 )            (784,126 )
LESS: LOSS ATTRIBUTABLE TO NON-CONTROLLING
INTERESTS                                                  56,155                41,155


LOSS BEFORE PROVISION FOR INCOME TAXES                 (1,709,666 )            (742,971 )
PROVISION FOR INCOME TAXES                                     -                     -

NET LOSS                                            $  (1,709,666 )        $   (742,971 )

LOSS PER COMMON SHARE: BASIC AND DILUTED            $       (0.01 )        $      (0.01 )

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING: BASIC AND DILUTED                        145,208,424            88,868,255

DIVIDENDS PER COMMON SHARE                          $        0.00          $       0.00

Revenues:

Contract revenues for the twelve months ended December 31, 2013 was $2,040 compared to $452,304 for the twelve months ended December 31, 2012. The decline in sales revenue of $450,265 was mainly attributable to the comparable sales between periods and the delay of significant projects expected to close during 2013.

Contract Costs and Gross Profit:

Contract costs decreased from $423,717 for the twelve months ended December 31, 2012 to $2,471 for the same period in 2013. The decrease in contract cost was mainly attributable to reduced profits and increased utilization of independent contractors on an as needed basis.

Gross profit decreased from $28,587 for the twelve months ended December 31, 2012 to a loss of $431 for the same period in 2013. Gross profit as a percentage of revenue was negative 21% for the twelve months ended December 31, 2013, compared to 6.3% for the same period in 2012. The decrease in gross profit was attributable to the increased contract costs.

Operating Expenses:

Operating expenses increased significantly from $811,439 for the twelve months ended December 31, 2012 to $1,659,606 for the same period in 2013. The increase in expenses was mainly due to higher compensation expense.

General and Administrative Expenses:

General and administrative expenses decreased from $289,733 for the twelve months ended December 31, 2012 to $206,305 for the twelve months ended December 31, 2013. The decrease was due primarily to non-recurring write off of an account receivable that was charged to bad debt expense.

Net Loss:

We recorded a net loss of 1,706,666 for the twelve months ended December 31, 2013, as compared to a net loss of $742,971 for the same period in 2012. The increase was due mainly to the increased operating and general and administrative expenses.

Liquidity and Capital Resources

For the year ended December 31, 2013, we used $378,291 in cash flow from operating activities compared to cash used of $130,248 for the year ended December 31, 2012.

The Company has outstanding debt, net of discount of $112,208 and derivative liability on convertible notes of $240,609 at December 31, 2013 as compared to zero debt as of December 31, 2012.

Cash and cash equivalents were $45,164 as of December 31, 2013 compared to $18,553 as of December 31, 2012.

We have no material commitments for capital expenditures and know of no trends, demands, commitments, or events that will result in our liquidity changing in a material way for the foreseeable future.

Critical Accounting Policies

Please refer to "Note 2 - Summary of Significant Accounting Policies in Part IV, Item 15" in the attached financial statements.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements.

Recently Adopted Accounting Pronouncements

Please refer to "Note 2 - Summary of Significant Accounting Policies in Part IV, Item 15" in the attached financial statements for a complete description of recent accounting standards which we have not yet been required to implement and may be applicable to our operation, as well as those significant accounting standards that have been adopted in 2013 and 2012.

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