Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Going Concern Considerations

Note 3 - Going Concern Considerations
3 Months Ended
Mar. 31, 2016
Note 3 - Going Concern Considerations

Note 3 – Going Concern Considerations


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As shown in the accompanying consolidated financial statements, the Company incurred losses from continuing operations of $405,930 and $129,910 for the three months ended March 31, 2016, and 2015, respectively, and has an accumulated deficit applicable to its common shareholders of approximately $34,000,000 at March 31, 2016.  The Company also used cash in operating activities of approximately $31,000 and $149,000 during the three months ended March 31, 2016 and 2015, respectively.  At March 31, 2016, the Company has negative working capital of approximately $7,000,000. These factors raise substantial doubt about the Company's ability to continue as a going concern.


The Company commenced its business related to the cultivation and production of oil from the seed of the Jatropha plant in September 2007.  On December 2, 2016, the three Jatropha Mexican farms were sold and operations were ceased as of December 31, 2015.  As of the year ended December 31, 2015, in order to fund its operations, the Company received $22,619,569 in capital contributions from the preferred membership interest in GCE Mexico I, LLC ("GCE Mexico"), and issued mortgages in the total amount of $5,110,189 for the acquisition of land.  The Company intends to continue to provide the renewable fuels and renewable chemicals markets with novel non-food based feedstocks that are economically, environmentally and socially sustainable by continually improving our plant varieties through modern genetic techniques and traditional and marker-assisted breeding.  Through this effort, the Company plans to expand both its Carribean and North American operations in both Jatropha and Camelina feedstocks. The ability of the Company to continue as a going concern is dependent on that plan's success. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


GCE Mexico I, LLC and Subsidiaries


GCE Mexico was organized primarily to facilitate the acquisition of the initial 5,000 acres of farm land (the Jatropha Farm) in the State of Yucatan in Mexico to be used primarily for the (i) cultivation of Jatropha curcas, (ii) the marketing and sale of the resulting fruit, seeds, or pre-processed crude Jatropha oil, whether as biodiesel, feedstock, biomass or otherwise, and (iii) the sale of carbon value, green fuel value, or renewable energy credit value (and other similar environmental attributes) derived from activities at the Jatropha Farm.


The net income or loss of the three Mexican subsidiaries that own the Mexico farms was allocated to the shareholders based on their respective equity ownership; 99% of the equity of each subsidiary is owned by GCE Mexico and 1% is owned by the Company.  GCE Mexico has no operations separate from its investments in the Mexican subsidiaries.  According to the LLC Agreement of GCE Mexico, the net loss of GCE Mexico is allocated to its members according to their respective investment balances.  Accordingly, since the common membership interest did not make a capital contribution, all of the losses have been allocated to the preferred membership interest.