UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-12627

Global Clean Energy Holdings, Inc.

Exact name of registrant as specified in its charter)

 

DELAWARE	87-0407858
State or other jurisdiction of incorporation	(IRS Employer Identification No.)

 

2790 Skypark Drive, Suite 105

Torrance, California 90505

(Address of principal executive offices)

(310) 641-4234

Former Name or Former Address, if Changed Since Last Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.

 

 

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of May 13, 2016, the issuer had 341,405,545 shares of common stock issued and outstanding.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

PART I

ITEM 1. FINANCIAL STATEMENTS.

GLOBAL CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
		March 31,				December 31,
		2016				2015
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	2,256			$	34,704
Accounts receivable			13,595				10,160
Inventory			25,921				26,544
Other current assets			36,230				36,846
Current assets of discontinued operations			63,919				218,015
Total Current Assets			141,921				326,269
PROPERTY AND EQUIPMENT, NET			7,094				7,868
INTANGIBLE ASSETS, NET			3,421,191				3,482,498
Noncurrent assets of discontinued operations			-				-
Other noncurrent assets			2,626				2,626
TOTAL ASSETS		$	3,572,832			$	3,819,261
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	3,060,695			$	3,041,612
Accrued payroll and payroll taxes			1,435,216				1,380,155
Deferred revenue			-				-
Accrued interest payable			528,573				455,029
Notes payable			1,369,856				1,369,856
Convertible notes payable			697,000				697,000
Derivative Liability			106,000				106,000
Current liabilities from discontinued operations			-				-
Total Current Liabilities			7,197,340				7,049,652
STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value; 50,000,000 shares authorized
Series B, convertible; 13,000 shares issued and outstanding(aggregate liquidation
preference of $1,300,000)			13				13
Common stock, $0.001 par value; 500,000,000 shares authorized;
341,405,545 issued and outstanding			341,405				341,405
Additional paid-in capital			30,559,890				30,533,184
Accumulated deficit			(34,629,719	)			(34,210,969	)
Accumulated other comprehensive gain (loss)			103,903				105,976
Total Global Clean Energy Holdings, Inc. Stockholders' Deficit			(3,624,508	)			(3,230,391	)
Total Stockholders' Deficit			(3,624,508	)			(3,230,391	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	3,572,832			$	3,819,261

GLOBAL CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
		For the three months Ended
		March 31,
		2016				2015
Revenue		$	121,647			$	150,220
Total Revenue			121,647				150,220
Operating Expenses
General and administrative			454,060				530,581
Plantation operating costs			-				7,172
Total Operating Expenses			454,060				537,753
Operating Loss			(332,413	)			(387,533	)
Other Income (Expenses)
Interest expense, net			(73,517	)			(20,870	)
Gain on settlement of liabilities			-				270,323
Change in fair value of derivative			-				8,000
Foreign currency transaction gain (loss)			-				170
Other Income (Expenses), Net			(73,517	)			257,623
Loss from Continuing Operations			(405,930	)			(129,910	)
Less Net Loss from Discontinued Operations			(12,820	)			(347,221	)
Net Loss		$	(418,750	)		$	(477,131	)
Basic and diluted Loss per Common Share:
Loss from Continuing Operations		$	(0.001	)		$	(0.001	)
Loss from Discontinued Operations		$	(0.000	)		$	(0.001	)
Net Loss per Common Share		$	(0.001	)		$	(0.002	)
Basic and diluted Weighted-Average Common Shares Outstanding			341,405,545				339,187,545

 

GLOBAL CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
		For the three months ended
		March 31,
		2016				2015
Operating Activities
Net Loss		$	(418,750	)		$	(477,131	)
Net loss from discontinued operations			(12,820	)			(347,221	)
Net loss from continued operations			(405,930	)			(129,910	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on settlement of liabilities			-				(270,323	)
Share-based compensation			26,705				87,279
Depreciation and amortization			62,096				65,210
Amortization of debt discount			-				18,250
Change in fair value of derivative liability			-				(8,000	)
Changes in operating assets and liabilities:
Accounts receivable			-				200,384
Inventory			623				(843	)
Other current assets			(4,460	)			(38,240	)
Accounts payable and accrued expenses			150,185				1,024
Other noncurrent assets			140,263				(72,235	)
Net Cash Used in Operating Activities			(30,518	)			(147,404	)
Cash Flows of discontinued operations:
Operating cash flows			(152,677	)			44,827
Investing cash flows			-				(75,996	)
Financing cash flows (including cash at year end)			-				127,000
Net Cash flows from discontinued operations			(152,677	)			95,831
Effect of exchange rate changes on cash			(2,605	)			4,037
Net change in Cash and Cash Equivalents			(185,800	)			(47,536	)
Cash and Cash Equivalents at Beginning of Period			251,975				238,485
Cash and Cash Equivalents at End of Period			66,175				190,949
Cash and Cash Equivalents for discontinued operations			63,919			$	156,245
Cash and Cash Equivalents at End of Period to continuing operations		$	2,256			$	34,704
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest		$	-			$	-
Cash paid for income tax		$	1,600			$	-
Noncash Investing and Financing activities:
Accrual of return on noncontrolling interest		$	-			$	669,486
Estimated fair value of derivative liability							73,000

The accompanying notes are an integral part of these condensed unaudited consolidated financial statements

 

GLOBAL CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
		For the three months Ended
		March 31,
		2016				2015
Net Loss		$	(418,750	)		$	(477,131	)
Other comprehensive loss- foreign currency
translation adjustment			-				(3,566	)
Comprehensive Loss		$	(418,750	)		$	(480,697	)

The accompanying notes are an integral part of these condensed unaudited consolidated financial statements

ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Report, including any documents which may be incorporated by reference into this Report, contains "Forward-Looking Statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "Forward-Looking Statements" for purposes of these provisions, including our plans to cultivate, produce and market non-food based feedstock for applications in the bio-fuels market, any projections of the date and amount of our Jatropha or Camelina harvests, forecasts regarding our revenues or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All Forward-Looking Statements included in this document are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any Forward-Looking Statement. In some cases, Forward-Looking Statements can be identified by the use of terminology such as "may," "will," "expects," "plans," "anticipates," "intends," "believes," "estimates," "potential," or "continue," or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the Forward-Looking Statements contained herein are reasonable, there can be no assurance that such expectations or any of the Forward-Looking Statements will prove to be correct, and actual results could differ materially from those projected or assumed in the Forward-Looking Statements. Future financial condition and results of operations, as well as any Forward-Looking Statements are subject to inherent risks and uncertainties, including any other factors referred to in our press releases and reports filed with the Securities and Exchange Commission. All subsequent Forward-Looking Statements attributable to the company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

 

Introductory Comment

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto contained in Part I, Item 1 of this Quarterly Report. The information contained in this Quarterly Report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the U.S. Securities and Exchange Commission (the "SEC"), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which discuss our business in greater detail.

Throughout this Quarterly Report on Form 10-Q, the terms "GCEH," "we," "us," "our," and "our company" refer to Global Clean Energy Holdings, Inc., a Delaware corporation and, unless the context indicates otherwise, also includes all of this company's U.S. and foreign wholly-owned subsidiaries through which this company conducts certain of its operations. To the extent applicable, depending on the context of the disclosure, the terms "we," "us," "our," and "our company" may also include GCE Mexico I, LLC, a Delaware limited liability company that we previously managed, and in which we previously owned 50% of the common membership interests, and our wholly owned subsidiary, Sustainable Oils, Inc., a Delaware corporation, as well as our other subsidiaries.

Global Clean Energy Holdings, Inc. is not related to, or affiliated in any manner with "Global Clean Energy, Inc.", an unaffiliated public company. Readers are cautioned to confirm the entity that they are evaluating or in which they are making an investment before completing any such investment.

Overview

Global Clean Energy Holdings, Inc. is a U.S.-based, multi-national, energy agri-business focused on the development of non-food based bio-feedstocks.  We have full service in-house development and operations capabilities, which we provide support to our own energy farms and to third parties.  With international experience and capabilities in eco-friendly biofuel feedstock management, cultivation, production and distribution, we believe that we are well suited to scale our existing business.

 

Since 2007, our business focus has been on the commercialization of non-food based oilseed plants and biomass.  We began with the development of farms growing Jatropha curcas ("Jatropha") - a non-edible plant indigenous to many tropical and sub-tropical regions of the world, including Mexico, the Caribbean and Central America.  On March 13, 2013, we acquired Sustainable Oils, LLC, a Delaware limited liability company that has extensive experience in the development and farming of Camelina as an energy crop.  In that acquisition, we also acquired certain intellectual property, including issued patents, related to Camelina production.  As a result of the acquisition,  our biofuels operations have expanded into the development of Camelina sativa ("Camelina") – an annual plant from the brassica family traditionally grown in northerly regions of the United States, Europe and Asia.  We have focused on these two plants primarily because we feel they are complementary to one another, have the potential to produce oil seed crops economically, they generally require less water and fertilizer than many conventional crops, and can be grown on land that is normally unsuitable for food production or is fallow or idle due to crop rotation.  Both Jatropha and Camelina oil are high-quality plant oils used as direct substitutes for fossil fuels and as feedstock for the production of high quality biofuels and other bio-based products.  Both crops have been tested and proven to be highly desirable feedstocks capable of being converted into ASTM approved fuels. The term "biofuels" refers to a range of biological based fuels including bio-kerosene (a.k.a bio-jet fuel) biodiesel, renewable diesel, green diesel, synthetic diesel and biomass, all of which have environmental benefits that are the major driving force for their adoption. Using biofuels instead of fossil fuels reduces net emissions of carbon dioxide and other green-house gases, which are associated with global climate change.  Both Jatropha and Camelina oil can also be used as a chemical feedstock to replace fossil and non-food based products that use edible oils in their manufacturing or production process.  The residual material derived from the oil extraction process is called press-cake or meal, which in the case of Jatropha is a high-quality biomass that has been proven and tested as a replacement for a number of fossil-based feedstocks, fossil fuels and other high value products such as renewable charcoal, fertilizers, and animal feed. Camelina  meal is high in Omega3 and has already been approved by the FDA as a livestock (animal) feed or enhancement in the United States.

Our business plan and current principal business activities include the planting, cultivation, harvesting and processing of these oil seed plants to generate plant based oils and biomass for use as replacements for fossil fuels and other high value products including renewable chemicals and high value livestock feed.  Our strategy is to leverage our agriculture and energy knowledge, experience and capabilities through the following means:

 

The development of agricultural-based energy projects, like plant oil and related biomass, may produce carbon credits through the sequestration (storing) of carbon and the displacement of fossil-based fuels.  Accordingly, in addition to generating revenues from the sale of non-food based plant oils and biomass, we are seeking to certify our farms, where practical, to generate and monetize carbon credits.  See, "Business-Carbon Credits," below.

Since 2008 we have owned/operated three Jatropha farms in Mexico through GCE Mexico I, LLC ("GCE Mexico") a Delaware limited liability company that we formed with two investors.  We owned 50% of the common membership interests of GCE Mexico, our investors owned the other 50% of the common membership interests, and the GCE Mexico preferred units were owned by an affiliate of the investors. On December 2, 2015, we sold the three Jatropha farms to Enerall Terra 2 S.A.P.I de C.V, a Mexican agricultural operator in the region.  The purchase price for the three farms was MXP$89 Million (approx. US$5,908,000).  GCE Mexico assigned U.S. $5.1 million of the purchase price the our joint venture partner to repay the U.S.$5.1 million of mortgage loans made by the investor to GCE Mexico's operating subsidiaries.  In addition, as part of the sale of the three farms and the repayment of the mortgage loans, the investor agreed to forgive and extinguish (i) approximately $5.1 million of unpaid interest that had accrued on the three mortgage loans, and (ii) the preferred return (approximately $12.1 million) that the preferred unit holders had accrued.  We did not receive any cash from the sale of the three farms.  However, as result of the repayment of the three mortgage loans, the forgiveness of the accrued interest on those loans, and the extinguishment of the accrued preferred return, approximately US$22.3 million of long term liabilities were extinguished from this Company's consolidated balance sheet.

 

Organizational History

This company was originally incorporated under the laws of the State of Utah on November 20, 1991.  On July 19, 2010, we changed the state of our incorporation from Utah to Delaware.  Our principal executive offices are located at 2790 Skypark Drive, Suite 105, Torrance, CA 90505, and our current telephone number at that address is (310) 641-GCEH (4234).  We maintain a website at: www.gceholdings.com.  Our annual reports, quarterly reports, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and other information related to this company are available on our website as soon as we electronically file those documents with, or otherwise furnish them to, the Securities and Exchange Commission.  Our Sustainable Oils subsidiary also maintains a website at www.susoils.com.  Our Internet websites and the information contained therein, or connected thereto, are not, and are not intended to be incorporated into the Annual Report on Form 10-K at December 31, 2015 or into this quarterly report on Form 10-Q.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States require management to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying financial statements. Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain.

 

Certain other critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Results of Operations

Revenues. During the three months ended March 31, 2016 and 2015 we recognized revenue of $121,647 and $158,231, respectively. The revenues that we generated in 2016 and 2015 were derived from energy farm management, development and advisory services.  Revenues we generate from these services are used for this company's operations.

In the short term, our goal is to increase the amount of advisory and management services in order to generate revenues to fund our corporate working capital needs, and to generate Camelina-related revenues from the Camelina business that we acquired in March 2013.  Our Camelina operations are expected to generate revenues from the sale of Camelina seeds, the sale of Camelina oil, and the sale of the Camelina biomass for use as feed for livestock.  In the longer term, we plan to increase the revenues derived from the operations of our Jatropha farms, to rapidly ramp up our Camelina operations, and to continue to generate revenue from management, development, and advisory services.   We anticipate that revenues for the remainder of 2016 will increase due to scale-up of our biomass processing project in the Dominican Republic and the Camelina in the North Americas.

General and Administrative Expenses. For the three months ended March 31, 2016 and 2015, we recorded general and administrative expenses of $466,892, including approximately $13,000 of discontinued operations expense and $593,615 (approximately $347,000 of discontinued operations expense), respectively.  This decrease is related to the operations in Mexico being discontinued as of December 31, 2015.  General and administrative expenses principally consist of officer compensation, outside services (such as legal, accounting, and consulting expenses), share-based compensation, and other general expenses (such as insurance, occupancy costs and travel). 

 

Plantation (Farm) Operating Costs. As the operations on the Mexican farms were discontinued as of December 31, 2015 we did not record any Plantation Operating Costs in the quarter ended March 31, 2016.  We recorded $30,376 for the three months ended March 31, 2015.

Other Income/Expense.  Interest expense for the three months ended March 31, 2016 increased by approximately $53,000 from  the same period in 2015 due to GCE Mexico's debt being extinguished upon the sale of the three Jatropha farms in Decemnber 2015 and the related interest expense of approximately $271,000 was classified as discontinued operations in December 2015.

Net loss attributable to discontinued operations, formerly non-controlling interest.  Our three Mexico farms were sold December 2, 2015 and farming operations were ceased effective December 31, 2015.  Our Mexico farm operations were owned through GCE Mexico.   Under GCE Mexico's operating agreement, the net loss allocated from these entities to GCE Mexico is then further allocated to the members of GCE Mexico according to the investment balances. Accordingly, since the common membership interest did not make a capital contribution, all of the losses allocated to GCE Mexico were allocated to the preferred membership interest.  In the three months ended March 31, 2015, the net loss attributable to the non-controlling interest in the accompanying Consolidated Statement of Operations represented the allocation of the net loss of GCE Mexico to the preferred membership interests was approximately $347,000.  For the three months ended March 31, 2016, the loss from the discontinued operations (formerly non-controlling interest) was approximately $13,000, which related to costs incurred taxes and governmental fees for the closure of GCE Mexico and its subsidiaries.

Net loss. The Company recorded net losses of $418,750 and $477,131 for the three months ended March 31, 2016 and 2015, respectively.  Our ability to generate net income in the future will depend on the amount of advisory, development and management services that we render at the corporate level, the amount of revenues generated from our Jatropha farms in the Dominican Republic, and on the amount of revenues we generate from our Camelina operations.  Although we anticipate that we will generate new revenues from our Camelina and Jatropha farm operations, we are unable to forecast if, or when such revenues will exceed our operating expenses.

Liquidity and Capital Resources

As of March 31, 2016, we had approximately $66,000 (which included approximately $47,000 in our Mexican subsidiary) in cash or cash equivalents and had a working capital deficit of $6,527,000, as compared with $252,000 in cash and a working capital deficit of $6,268,000 as of December 31, 2015.

In order to fund our short-term working capital needs, we will have to obtain additional funding from the sale of additional securities, additional borrowings, or from an increase in operating revenues. Outstanding indebtedness at March 31, 2016 totaled $7,197,341. The existence of the foregoing working capital deficit may negatively impact our ability to obtain future equity or debt financing and the terms on which such additional financing, if available, can be obtained.  We incurred losses of $418,750 and $477,131 for the three months ended March 31, 2016 and March 31, 2015 respectively, and have an accumulated deficit applicable to its common shareholders of $34,629,719 at March 31, 2016.

In the fiscal quarters ended March 31, 2015 and 2016, our general and administrative expenses, including the professional costs of being a public company, were funded from (i) revenues that we have generated from advisory services, and (ii) funds received from the sale of our securities.  The amount of fees we generated from advisory services fluctuates significantly.  While we currently are providing advisory services under existing contracts, our ability to continue to generate revenue from these services will depend on our ability to enter into new advisory agreements when the current agreements expire.  No assurance can be given that we will be able to enter into new agreements to replace or supplement the current advisory agreements.   As a result, we expect that we will have to raise capital in the near future, or find other sources of capital in the near future, in order to continue to fund our corporate general and administrative expenses.

Our business plan contemplates that we will (i) continue to develop our biomass business and operations, and (ii) diversify our biofuel energy crop revenues from new revenues generated by our new Camelina operations, as follows:

Jatropha Farm Operations.  Until December 2015, we owned and operated three farms in Mexico (two of which were planted with Jatropha and the third was partially planted with an annual oil seed crop) through our GCE Mexico joint venture.  All of the operating and capital expenses of those farms were funded by our joint venture partner and from operating revenues.  Our joint venture partner in GCE Mexico funded all of GCE Mexico's operating and capital requirements in 2015 and the wind down expenses for the first quarter of 2016.  Due to our partner's other business commitments, however, our joint venture partner was not able to commit to the additional investment needed to operate and expand the farms.  As a result, as disclosed in this Annual Report, GCE Mexico sold those farms in December 2015.

 

Camelina Operations.  In March 2013, we acquired the business and assets of Sustainable Oils, LLC, a company that had been engaged in developing Camelina products since 2007.  The Camelina operations will require a significant amount of additional cash to scale up its operations and to reach profitable operations.  We will operate the Camelina business that we acquired through a subsidiary Sustainable Oils Inc.which we capitalized with the Sustainable Oils intellectual properties and operating assets that we recently purchased.  Furthermore, our goal is to fund the operations and expansion of the Camelina operations with new debt or equity that we are in the process of raising specifically for the Camelina subsidiary.  We have been in discussions with a number of sources for the additional funding, but we have not entered into any binding arrangements for the desired amount of new funding.  No assurance can be given that we will obtain the additional capital necessary to operate and grow our new Camelina operations.  In the event that we do not obtain the necessary amount of financing to properly operate and scale up our new Camelina operations, those operations are expected to continue to operate at a loss.

As partial consideration for the Camelina assets that we purchased in March 2013, we issued a $1,300,000 promissory note. In September 2014, we renegotiated the terms of the note and agreed to return certain tangible assets that constituted the collateral under the promissory note to the holder of the promissory note in exchange for a reduction of the amount of accrued interest owed under the promissory note and an extension of the maturity date. Since December 31, 2014, the foregoing promissory note is now an unsecured promissory note that is payable on demand. However, the amount of payable under the promissory note is limited to amounts generated from the Camelina business that we acquired.

Other Potential Source of Liquidity.

We presently do not have any available credit, bank financing or other external sources of liquidity. In the absence of additional outside funding (including proceeds from the sale of our securities, or entering into other joint venture relationships), we do not have the ability to expand our business or acquire additional biofuel feedstock farms. If we issue additional equity or debt securities to fund our future capital needs, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. Should we not be able to increase the amount of revenues we receive from our advisory services and/or raise additional debt or equity funding, we will have to materially scale back our current and proposed operations or take other actions to preserve our on-going operations.

Inflation and changing prices have had no effect on our continuing operations over our two most recent fiscal years.

We have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file with, or submit to, the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our chief executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure. As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive and financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our chief executive and financial officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

 

There was no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS.

From time to time, the Company may become a party to other legal actions and complaints arising in the ordinary course of business, although it is not currently involved in any such legal proceedings.

On April 18, 2016, the Company was served with a complaint filed in the District Court of Harris County, Texas, in a case identified as Tanglewood Receivables Company vs. Global Clean Energy Holdings, Inc., d/b/a GCE Holdings, Inc., Case No. 2015-53930.   The plaintiff, a collection company, alleges that the Company failed to pay up to $74,000 of legal fees to John H. Bennett Jr., p.c. for legal services rendered from July 2010 to August 2011.   Global Clean Energy Holdings Inc. did not engage John H. Bennett Jr. p.c., for services and never received any invoices from that attorney.  The Company has answered the complaint and intends to vigorously defend itself in this action.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable

ITEM 5. OTHER INFORMATION

Not applicable.

 

 

ITEM 6. EXHIBITS

31.1	Rule 13a-14(a) Certification, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Link base
101.DEF	XBRL Taxonomy Extension Definition Link base Document
101.LAB	XBRL Taxonomy Extension Label Link base Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

 

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

       By: /s/ RICHARD PALMER

       Chief Executive Officer

       By: /s/ DONNA REILLY