Edgar Filing: Global Resource CORP

NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

(A Development Stage Company)

Condensed Consolidated Balance Sheets

March 31, 2009

	(Unaudited)			(Audited)
	Period Ended			Year Ended
	March 31, 2009			December 31, 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	784,287		$	2,013,730
Short-term investments		1,738,960			2,557,274
Prepaid Services		976,650			1,508,875
Total current assets		3,499,897			6,079,879

Prperty and equipment, net of depreciation		1,592,342			1,358,299

OTHER ASSETS
Deposits		123,726			123,726
Prepaid patent costs		420,810			383,685
Total other assets		544,536			507,411

TOTAL ASSETS	$	5,636,775		$	7,945,589

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	780,464		$	889,489
Loans payable - equipment		29,209			34,850
Capital lease obligation - equipment		10,158			9,543
Severance payable		200,000			200,000
Total current liabilities		1,019,831			1,133,882

LONG-TERM LIABILITIES
Loans payable - equipment, net of current portion		11,538			16,821
Capital lease obligation - equipment, net of current portion		12,959			15,742
Severance payable, net of current portion		950,000			1,000,000
Derivative financial instruments		895,980			1,591,834
Total liabilities		2,890,308			3,758,279

COMMITMENT AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock A - $.001 par value 100,000,000 shares authorized, none issued and					5
outstanding at March 31, 2009, 5,000 issued and outstanding at December 31, 2008
Common stock, $.001 par value; 200,000,000 shares authorized, 69,645,664 shares issued		69,645			69,549
and 62,950,703 outstanding at March 31, 2009, 69,549,164 shares issued and
62,854,203 outstanding at December 31, 2008
Additional paid-in capital		36,411,372			35,842,053
Accumulated other comprehensive loss		(550,441	)		(237,550	)
Deficit accumulated in the development stage		(31,467,636	)		(29,770,274	)
		4,462,940			5,903,783

Treasury Stock		(1,716,473	)		(1,716,473	)

Total stockholders' equity		2,746,467			4,187,310

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	5,636,775		$	7,945,589

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(With Cumulative Totals Since Inception)

(Unaudited)


	Three Months Ended						July 19, 2002
				Restated			(Inception)
	March 31			March 31			to
	2009			2008			March 31, 2009

REVENUES	$	-		$	-		$	-

COST OF SALES		-			-

GROSS PROFIT		-			-			-

OPERATING EXPENSES
								-
General and administrative expenses		2,185,232			3,455,300			42,207,603
								-
Research and development expenses		242,899			126,258			1,523,938

Total operating expenses		2,428,131			3,581,558			43,731,541

OPERATING LOSS		(2,428,131	)		(3,581,558	)		(43,731,541	)

OTHER INCOME (EXPENSE)
Loss on deposit and other					-			(179,893	)
Net realized loss on investments		(17,438	)		-			(899,206	)
Change in fair value of derivative financial instruments		695,854			7,246,228			13,055,699
Interest expense		(3,144	)		(6,073	)		(59,616	)
Interest income		55,497			3,787			346,921

Total other income		730,769			7,243,942			12,263,905

NET INCOME (LOSS)	$	(1,697,362	)	$	3,662,384		$	(31,467,636	)

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized loss on short-term investments	$	(312,891	)	$	-		$	(1,388,291	)
Realized loss on short-term investments, net of taxes, reclassified
from accumulated other comprehensive loss		-			-			837,850


COMPREHENSIVE INCOME (LOSS)	$	(2,010,253	)	$	3,662,384		$	(32,018,077	)

EARNINGS (LOSS) PER COMMON SHARE
BASIC	$	(0.03	)	$	0.12
DILUTED	$	(0.03	)	$	0.07
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
BASIC		62,920,431			30,743,131
DILUTED		62,920,431			49,333,456

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(With Cumulative Totals Since Inception)

(Unaudited)

							July 19, 2002
	Three Months Ended						(Inception)
	March 31,			March 31,			to
	2009			2008			March 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES				Restated
Net loss	$	(1,697,362	)	$	3,662,384		$	(31,467,636	)

Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		32,328			20,692			314,181
Preferred stock issued for services								400,000
Common stock issued for services		43,250			1,960,275			20,916,071
Amortization of prepaid common stock issued for services		548,675			645,375			3,938,800
Common stock warrants and options issued for services		455,960			21,870			1,787,539
Amortization of deferred compensation					27,250			545,000
Loss on sale of property and equipment								18,955
Loss on sale of real estate and forfeiture of deposit								212,936
Loss on sale of short-term investments		17,438						17,438
Change in fair value of derivative financial instruments		(695,854	)		(7,246,228	)		(13,055,699	)
Other than temporary losses on short-term investments								837,850
Common stock issued as charitable contribution								50,000

Changes in assets and liabilities
Prepaid services		53,750						(31,250	)
Deposits								(178,726	)
Prepaid patent costs		(37,125	)		(37,140	)		(420,810	)
Accounts payable and accrued liabilities		(109,025	)		2,872			982,893
Severance payable		(50,000	)					1,150,000
Total adjustments		259,397			(4,605,034	)		17,485,178
Net cash used in operating activities		(1,437,965	)		(942,650	)		(13,982,458	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment - equipment & machinery		(72,208	)		(9,601	)		(664,187	)
Purchase of property and equipment - construction-in-progress		(194,163	)		(361,511	)		(1,124,242	)
Proceeds from sale of property and equipment								44,200
Proceeds from sale of real estate								617,864
Purchase of short-term investments								(4,586,334	)
Proceeds from sale of short-term investments		487,985						1,441,645
Net cash provided by (used in) investing activities		221,614			(371,112	)		(4,271,054	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash					2,083,789			21,002,175
Proceeds for stock to be issued					5,069,872
Proceeds from stock subscription receivable					55,175			(130,518	)
Purchase of treasury stock								(1,716,473	)
Repayment of loans payable and capital lease obligation		(13,092	)		(9,845	)		(117,385	)
Net cash provided by (used in) financing activities		(13,092	)		7,198,991			19,037,799

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,229,443	)		5,885,229			784,287

CASH AND CASH EQUIVALENTS
- BEGINNING OF PERIOD		2,013,730			780,425

CASH AND CASH EQUIVALENTS
- END OF PERIOD	$	784,287		$	6,665,654		$	784,287

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW ACTIVITIES:
Interest Paid	$	3,144		$	6,073		$	62,002

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A				Preferred Stock B				Common Stock				(Restated)		Deficit Accumulated			(Restated)						Accumulated		(Restated)
	Preferred		Par Value $.001		Preferred		Par Value $.001		Common		Par Value $.001		Additional Paid-In		during the Development			Deferred		Stock Subscription		Treasury		Other Comprehensive
	Shares		$ Amount		Shares		$ Amount		Shares		$ Amount		Capital		Stage			Compensation		Receivable		Stock		Loss		Total

Balance at July 19, 2002 (Inception)			$	-			$	-		-	$	-	$	-	$	-		$	-	$	-	$	-	$	-	$	-

Issuance of initial founders' shares, September 9, 2002 net of subsequent cancellations										2,555,000																	-

Common stock shares issued for cash:

Common stock issued for cash on November 5, 2002, at $.50 per share plus 8,000 warrants										8,000				4,000													4,000

Common stock issued for cash on November 21, 2002, at $.50 per share plus 21,000 warrants										21,000				10,500													10,500

Common stock shares issued for services rendered:

Common stock issued for services rendered, on September 10, 2002, at $0.472 per share										1,000,000				472,000													472,000

Common stock issued for services rendered, in November 5, 2002, at $0.50 per share, plus 8,500 warrants										8,500				4,250													4,250

Common stock issued for services rendered, on December 5, 2002, at $0.50 per share, plus 5,100 warrants										5,100				2,550													2,550

Net loss for the period July 19, 2002 (Inception) through December 31, 2002 (Restated, see Note 19)																(508,508	)										(508,508	)

Balance at December 31, 2002 (Restated, see Note 19)		-		-		-		-		3,597,600		-		493,300		(508,508	)		-		-		-		-		(15,208	)

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Re-issuance of initial founders' shares, July 2003						1,455,000										-

Common stock shares issued for cash:

Common stock issued for cash on January 3, 2003, at $.50 per share plus 7,500 warrants						7,500			3,750							3,750

Common stock issued for cash on January 27, 2003, at $.50 per share plus 6,500 warrants						6,500			3,250							3,250

Common stock issued for cash on February 12, 2003, at $.50 per share plus 3,100 warrants						3,100			1,550							1,550

Common stock issued for cash on February 27, 2003, at $.50 per share plus 6,400 warrants						6,400			3,200							3,200

Common stock issued for cash on March 7, 2003, at $.50 per share plus 3,100 warrants						3,100			1,550							1,550

Common stock issued for cash on March 21, 2003, at $.50 per share plus 23,500 warrants						23,500			11,750							11,750

Common stock issued for cash on April 9, 2003, at $.50 per share plus 4,600 warrants						4,600			2,300							2,300

Common stock issued for cash on April 30, 2003, at $.50 per share plus 8,800 warrants						8,800			4,400							4,400

Common stock issued for cash on May 7, 2003, at $.50 per share plus 27,400 warrants						27,400			13,700							13,700

Common stock issued for cash on June 2, 2003, at $.50 per share plus 29,000 warrants						29,000			14,500							14,500

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on June 5, 2003, at $.50 per share plus 8,500 warrants						8,500			4,250							4,250

Common stock issued for cash on June 12, 2003, at $.50 per share plus 4,200 warrants						4,200			2,100							2,100

Common stock issued for cash on July 11, 2003, at $.50 per share plus 12,800 warrants						12,800			6,400							6,400

Common stock issued for cash on July 25, 2003, at $.50 per share plus 8,200 warrants						8,200			4,100							4,100

Common stock issued for cash on August 4, 2003, at $.50 per share plus 6,000 warrants						6,000			3,000							3,000

Common stock issued for cash on August 18, 2003, at $.50 per share plus 25,500 warrants						25,500			12,750							12,750

Common stock issued for cash on August 19, 2003, at $.50 per share plus 10,000 warrants						10,000			5,000							5,000

Common stock issued for cash on August 28, 2003, at $.50 per share plus 14,000 warrants						14,000			7,000							7,000

Common stock issued for cash on September 16, 2003, at $.50 per share plus 31,000 warrants						31,000			15,500							15,500

Common stock issued for cash on September 26, 2003, at $.50 per share plus 39,500 warrants						39,500			19,750							19,750

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A				Preferred Stock B				Common Stock				(Restated)		Deficit Accumulated			(Restated)							Accumulated		(Restated)
	Preferred		Par Value $.001		Preferred		Par Value $.001		Common		Par Value $.001		Additional Paid-In		during the Development			Deferred		Stock Subscription			Treasury		Other Comprehensive
	Shares		$ Amount		Shares		$ Amount		Shares		$ Amount		Capital		Stage			Compensation		Receivable			Stock		Loss		Total

Common stock issued for cash on October 10, 2003, at $.50 per share plus 38,900 warrants										38,900				19,450														19,450

Common stock issued for cash on October 14, 2003, at $.50 per share plus 70,000 warrants										70,000				35,000														35,000

Common stock issued for cash on October 23, 2003, at $.50 per share plus 4,500 warrants										4,500				2,250														2,250

Common stock issued for cash on November 3, 2003, at $.50 per share plus 48,000 warrants										48,000				24,000														24,000

Common stock issued for cash on November 18, 2003, at $.50 per share plus 32,800 warrants										32,800				16,400														16,400

Common stock issued for cash on December 1, 2003, at $.50 per share plus 23,000 warrants										23,000				11,500														11,500

Common stock issued for cash on December 10, 2003, at $.50 per share plus 12,500 warrants										12,500				6,250														6,250

Common stock issued for cash on December 17, 2003, at $.50 per share plus 10,500 warrants										10,500				5,250														5,250

Stock subscriptions receivable, net																					(14,340	)						(14,340	)

Net loss for the year ended December 31, 2003, (Restated, see Note 19)																(203,659	)											(203,659	)

Balance at December 31, 2003 (Restated, see Note 19)		-		-		-		-		5,572,400		-		753,200		(712,167	)		-		(14,340	)		-		-		26,693

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock shares issued for cash:

Common stock issued for cash on January 4, 2004, at $.50 per share plus 32,890 warrants						32,890			16,445							16,445

Common stock issued for cash on January 16, 2004, at $.50 per share plus 7,020 warrants						7,020			3,510							3,510

Common stock issued for cash on January 28, 2004, at $.50 per share plus 33,000 warrants						33,000			16,500							16,500

Common stock issued for cash on February 5, 2004, at $.50 per share plus 60,500 warrants						60,500			30,250							30,250

Common stock issued for cash on February 17, 2004, at $.50 per share plus 30,000 warrants						30,000			15,000							15,000

Common stock issued for cash on March 3, 2004, at $.50 per share plus 14,610 warrants						14,610			7,305							7,305

Common stock issued for cash on March 16, 2004, at $.50 per share plus 8,000 warrants						8,000			4,000							4,000

Common stock issued for cash on March 19, 2004, at $.50 per share plus 18,000 warrants						18,000			9,000							9,000

Common stock issued for cash on March 25, 2004, at $.50 per share plus 49,500 warrants						49,500			24,750							24,750

Common stock issued for cash on April 13, 2004, at $.50 per share plus 19,500 warrants						19,500			9,750							9,750

Common stock issued for cash on April 23, 2004, at $.50 per share plus 11,000 warrants						11,000			5,500							5,500

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock				(Restated)		Deficit Accumulated	(Restated)					Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common			Par Value $.001	Additional Paid-In		during the Development	Deferred			Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares			$ Amount	Capital		Stage	Compensation			Receivable	Stock	Loss	Total

Common stock issued for cash on July 6, 2004, at $.50 per share plus 538,000 warrants						538,000				317,720									317,720

Common stock issued for cash on July 9, 2004, at $.50 per share plus 36,500 warrants						36,500				18,250									18,250

Common stock issued for cash on August 13, 2004, at $.50 per share plus 11,000 warrants						11,000				5,500									5,500

Common stock issued for cash on October 12, 2004, at $1.50 per share plus 43,000 warrants						43,000				64,500									64,500

Common stock issued for cash on October 14, 2004, at $1.00 per share plus 2,000 warrants						2,000				2,000									2,000

Common stock issued for cash on October 21, 2004, at $1.00 per share plus 3,125 warrants						3,125				3,125									3,125

Common Stock Shares issued for services rendered:

Common stock issued for services rendered on October 12, 2004, at $1.00 per share						545,000				545,000			(545,000	)					-

Other:

Common stock issued in exchange for real estate on August 25, 2004 at $1.00 per share plus 500,000 warrants						500,000				500,000									500,000

Common stock issued in exchange for real estate on September 7, 2004 at $1.00 per share plus 150,000 warrants						150,000				150,000									150,000

Common stock issued as charitable contribution on October 12, 2004, at $1.00 per share						50,000				50,000									50,000

Common stock Initial Founder's shares cancelled on October 28, 2004						(250,000	)			-									-

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A				Preferred Stock B				Common Stock				(Restated)		Deficit Accumulated			(Restated)								Accumulated		(Restated)
	Preferred		Par Value $.001		Preferred		Par Value $.001		Common		Par Value $.001		Additional Paid-In		during the Development			Deferred			Stock Subscription			Treasury		Other Comprehensive
	Shares		$ Amount		Shares		$ Amount		Shares		$ Amount		Capital		Stage			Compensation			Receivable			Stock		Loss		Total
Stock subscriptions receivable, net																						(74,240	)						(74,240	)

Net loss for the year ended December 31, 2004																(672,219	)												(672,219	)

Balance at December 31, 2004		-		-		-		-		7,485,045		-		2,551,305		(1,384,386	)		(545,000	)		(88,580	)		-		-		533,339

Common stock shares issued for cash:

Common stock issued for cash on January 14, 2005, at $1.00 per share plus 5,000 warrants										5,000				5,000															5,000

Common stock issued for cash on January 18, 2005, at $1.00 per share plus 10,000 warrants										10,000				10,000															10,000

Common stock issued for cash on March 2, 2005, at $1.00per share plus 25,980 warrants										25,980				25,980															25,980

Common stock issued for cash on March 29, 2005, at $1.00 per share										2,000				2,000															2,000

Common stock issued for cash on September 16, 2005, at $2.00 per share plus 11,500 warrants										11,500				23,000															23,000

Common stock issued for cash on October 5, 2005, at $2.00 per share plus 5,000 warrants										5,000				10,000															10,000

Common stock issued for cash on October 5, 2005, at $2.00 per share plus 11,500 warrants										11,500				23,000															23,000

Common stock issued for cash on November 2, 2005, at $2.00 per share plus 500 warrants										500				1,000															1,000

Common stock issued for cash on November 2, 2005, at $1.00 per share plus 5,000 warrants										5,000				5,000															5,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on November 8, 2005, at $1.00 per share plus 22,000 warrants						22,000			22,000							22,000

Common stock issued for cash on November 9, 2005, at $1.00 per share plus 5,000 warrants						5,000			5,000							5,000

Common stock issued for cash on November 18, 2005, at $2.00 per share plus 97,000 warrants						97,000			96,990							96,990

Common stock issued for cash on November 18, 2005, at $1.00 per share plus 16,000 warrants						16,000			32,000							32,000

Common stock issued for cash on November 22, 2005, at $1.00 per share plus 7,000 warrants						7,000			7,000							7,000

Common stock issued for cash on November 22, 2005, at $2.00 per share plus 24,835 warrants						24,835			49,670							49,670

Common stock issued for cash on November 23, 2005, at $2.00 per share plus 2,000 warrants						2,000			4,000							4,000

Common stock issued for cash on November 30, 2005, at $2.00 per share plus 5,000 warrants						5,000			10,000							10,000

Common stock issued for cash on November 30, 2005, at $1.00 per share plus 25,000 warrants						25,000			25,000							25,000

Common stock issued for cash on December 2, 2005, at $2.00 per share plus 2,500 warrants						2,500			5,000							5,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on December 2, 2005, at $1.00 per share plus 5,000 warrants						5,000			5,000							5,000

Common stock issued for cash on December 6, 2005, at $2.00 per share plus 2,500 warrants						2,500			5,000							5,000

Common stock issued for cash on December 7, 2005, at $2.00 per share plus 2,500 warrants						2,500			5,000							5,000

Common stock issued for cash on December 7, 2005, at $1.00 per share plus 25,000 warrants						25,000			25,000							25,000

Common stock issued for cash on December 8, 2005, at $2.00 per share plus 16,285 warrants						16,285			32,570							32,570

Common stock issued for cash on December 14, 2005, at $2.00 per share plus 26,850 warrants						26,850			53,700							53,700

Common stock issued for cash on December 16, 2005, at $1.00 per share plus 13,000 warrants						13,000			13,000							13,000

Common stock issued for cash on December 19, 2005, at $2.00 per share plus 46,000 warrants						46,000			92,000							92,000

Common stock issued for cash on December 28, 2005, at $2.00 per share plus 10,000 warrants						10,000			20,000							20,000

Common stock issued for cash on December 30, 2005, at $.70 per share plus 338,000 warrants						84,500			59,423							59,423

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

Preferred Stock A

Preferred Stock B

Common Stock

(Restated)

Deficit

Accumulated

(Restated)

Accumulated

(Restated)

Preferred

Par Value $.001

Preferred

Par Value $.001

Common

Par Value $.001

Additional

Paid-In

during the

Development

Deferred

Stock

Subscription

Treasury

Other

Comprehensive

$ Amount

Capital

Stage

Compensation

Receivable

Stock

Loss

Total

Common stock issued for cash on December 30, 2005, at $2.00 per share plus 6,500 warrants

6,500

13,000

Common stock issued for cash on December 30, 2005, at $1.02 per share plus 100,000 warrants

100,000

102,000

Common stock issued for cash on December 30, 2005, at $.65 per share plus 85,200 warrants

21,300

13,815

Common stock issued for cash on December 30, 2005, at $.65 per share plus 20,000 warrants

5,000

3,235

Common stock issued for cash on December 30, 2005, at $.73 per share plus 66,000 warrants

16,500

12,033

Common stock issued for cash on December 30, 2005, at $.36 per share plus 18,000 warrants

4,500

1,610

Common stock issued for cash on December 30, 2005, at $.64 per share plus 60,800 warrants

15,200

9,750

Common stock issued for cash on December 30, 2005, at $.99 per share plus 8,000 warrants

2,000

1,985

Common stock issued for cash on December 30, 2005, at $.70 per share plus 134,000 warrants

33,500

23,385

Common stock issued for cash on December 31, 2005, at $1.02 per share plus 26,705 warrants

26,705

61,362

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)

	Preferred Stock A				Preferred Stock B				Common Stock				(Restated)		Deficit Accumulated			(Restated)								Accumulated		(Restated)
	Preferred		Par Value $.001		Preferred		Par Value $.001		Common		Par Value $.001		Additional Paid-In		during the Development			Deferred			Stock Subscription			Treasury		Other Comprehensive
	Shares		$ Amount		Shares		$ Amount		Shares		$ Amount		Capital		Stage			Compensation			Receivable			Stock		Loss		Total

Common Stock Shares issued for services rendered:

Common stock issued for services rendered on March 11, 2005, at $1.00 per share, plus 8,000 warrants										8,000				8,000															8,000

Common stock issued for services rendered on March 21, 2005, at $1.00 per share, plus 42,000 warrants										42,000				42,000															42,000

Common stock issued for services rendered on March 29, 2005, at $1.00 per share, plus 2,000 warrants										2,500				2,500															2,500

Common stock issued for services rendered on December 8, 2005, at $1.00 per share, plus 1,000 warrants										1,000				1,000															1,000

Other:

Common stock issued in exchange for real estate on January 18, 2005 at $1.00 per share plus 80,800 warrants										80,800				80,800															80,800

Common stock issued to Careful Sell Holdings, LLC to acquire technology with zero value on February 23, 2005										7,500,000																			-

Common stock issued to Careful Sell Holdings, LLC to acquire technology with zero value on March 29, 2005										30,000,000																			-

Common stock issued for payment of debts on March 11, 2005, at $1.00 per share plus 1,087 warrants										1,087				1,087															1,087

Stock subscriptions receiveable, net																						10,398							10,398

Amortization of deferred compensation																			109,000										109,000

Net loss for the year ended December 31, 2005																(1,291,169	)												(1,291,169	)

Balance at December 31, 2005		-		-		-		-		45,866,087		-		3,601,200		(2,675,555	)		(436,000	)		(78,182	)		-		-		411,463

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

Preferred Stock A

Preferred Stock B

Common Stock

(Restated)

Deficit

Accumulated

(Restated)

Accumulated

(Restated)

Preferred

Par Value $.001

Preferred

Par Value $.001

Common

Par Value $.001

Additional

Paid-In

during the

Development

Deferred

Stock

Subscription

Treasury

Other

Comprehensive

$ Amount

Capital

Stage

Compensation

Receivable

Stock

Loss

Total

Common stock shares issued for cash:

Common stock issued for cash on January 9, 2006, at $1.18 per share plus 61,000 warrants

61,000

72,000

Common stock issued for cash on January 19, 2006, at $2.00 per share plus 3,000 warrants

3,000

6,000

Common stock issued for cash on January 23, 2006, at $2.00 per share plus 2,500 warrants

2,500

5,000

Common stock issued for cash on January 26, 2006, at $2.00 per share plus 29,500 warrants

29,500

59,000

Common stock issued for cash on January 27, 2006, at $2.00 per share plus 11,100 warrants

11,100

22,200

Common stock issued for cash on January 31, 2006, at $2.00 per share plus 15,000 warrants

15,000

30,000

Common stock issued for cash on February 1, 2006, at $1.00 per share plus 2,000 warrants

2,000

Common stock issued for cash on February 2, 2006, at $2.00 per share plus 1,000 warrants

1,000

2,000

Common stock issued for cash on February 2, 2006, at $2.00 per share plus 6,000 warrants

1,500

3,000

Common stock issued for cash on February 6, 2006, at $2.00 per share plus 10,000 warrants

10,000

20,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)

	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on February 8, 2006, at $1.00 per share plus 100,000 warrants						100,000			100,000							100,000

Common stock issued for cash on February 9, 2006, at $.31 per share plus 52,000 warrants						26,000			8,125							8,125

Common stock issued for cash on February 10, 2006, at $1.00 per share plus 10,000 warrants						10,000			10,000							10,000

Common stock issued for cash on February 15, 2006, at $2.00 per share plus 15,000 warrants						15,000			30,000							30,000

Common stock issued for cash on February 16, 2006, at $1.00 per share plus 200,000 warrants						200,000			200,000							200,000

Common stock issued for cash on February 16, 2006, at $2.00 per share plus 10,000 warrants						10,000			20,000							20,000

Common stock issued for cash on February 17, 2006, at $1.02 per share plus 50,000 warrants						50,000			50,614							50,614

Common stock issued for cash on February 22, 2006, at $2.00 per share plus 2,000 warrants						2,000			4,000							4,000

Common stock issued for cash on February 28, 2006, at $1.00 per share plus 15,500 warrants						15,500			15,500							15,500

Common stock issued for cash on March 2, 2006, at $2.00 per share plus 15,000 warrants						15,000			30,000							30,000

Common stock issued for cash on March 13, 2006, at $1.00 per share plus 25,000 warrants						25,000			25,000							25,000

Common stock issued for cash on March 16, 2006, at $1.00 per share plus 2,500 warrants						2,500			2,500							2,500

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)

	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on March 17, 2006, at $.36 per share plus 308,000 warrants						154,000			55,175							55,175

Common stock issued for cash on March 20, 2006, at $2.00 per share plus 11,800 warrants						11,800			23,600							23,600

Common stock issued for cash on April 5, 2006, at $2.00 per share plus 1,000 warrants						1,000			2,000							2,000

Common stock issued for cash on April 26, 2006, at $2.00 per share plus 8,000 warrants						8,000			16,000							16,000

Common stock issued for cash on May 4, 2006, at $2.00 per share plus 2,200 warrants						2,200			4,400							4,400

Common stock issued for cash on May 8, 2006, at $2.00 per share plus 500 warrants						500			1,000							1,000

Common stock issued for cash on May 10, 2006, at $2.00 per share plus 750 warrants						750			1,500							1,500

Common stock issued for cash on May 15, 2006, at $2.00 per share plus 2,500 warrants						2,500			5,000							5,000

Common stock issued for cash on May 17, 2006, at $1.00 per share plus 600,000 warrants						600,000			600,000							600,000

Common stock issued for cash on May 20, 2006, at $.49 per share plus 10,000 warrants						6,436			3,148							3,148

Common stock issued for cash on May 22, 2006, at $1.00 per share plus 2,000 warrants						1,000			1,000							1,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)

	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on May 25, 2006, at $1.00 per share plus 8,000 warrants						8,000			16,000							16,000

Common stock issued for cash on May 30, 2006, at $2.00 per share plus 19,500 warrants						19,500			39,000							39,000

Common stock issued for cash on June 2, 2006, at $1.00 per share plus 11,800 warrants						11,800			11,800							11,800

Common stock issued for cash on June 7, 2006, at $2.00 per share plus 1,250 warrants						1,250			2,500							2,500

Common stock issued for cash on June 7, 2006, at $2.00 per share plus 15,000 warrants						15,000			14,990							14,990

Common stock issued for cash on June 12, 2006, at $.50 per share plus 50,000 warrants						25,000			12,485							12,485

Common stock issued for cash on June 22, 2006, at $2.00 per share plus 2,500 warrants						2,500			5,000							5,000

Common stock issued for cash on June 23, 2006, at $1.00 per share plus 24,000 warrants						24,000			24,000							24,000

Common stock issued for cash on June 26, 2006, at $2.00 per share plus 1,900 warrants						1,900			3,800							3,800

Common stock issued for cash on July 6, 2006, at $2.00 per share plus 250 warrants						250			500							500

Common stock issued for cash on July 11, 2006, at $1.00 per share plus 25,000 warrants						25,000			25,000							25,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)


	Preferred Stock A		Preferred Stock B		Common Stock			(Restated)		Deficit Accumulated	(Restated)			Accumulated	(Restated)
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001	Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount	Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on July 17, 2006, at $1.02 per share plus 872,000 warrants						436,000			445,000							445,000

Common stock issued for cash on July 27, 2006, at $2.00 per share plus 2,250 warrants						2,250			4,500							4,500

Common stock issued for cash on July 28, 2006, at $1.00 per share plus 10,000 warrants						10,000			10,000							10,000

Common stock issued for cash on August 4, 2006, at $2.00 per share plus 100,000 warrants						50,000			99,961							99,961

Common stock issued for cash on August 14, 2006, at $1.00 per share plus 160,000 warrants						160,000			160,000							160,000

Common stock issued for cash on August 14, 2006, at $2.00 per share plus 100,000 warrants						50,000			99,961							99,961

Common stock issued for cash on August 30, 2006, at $1.00 per share						3,200			3,200							3,200

Common stock issued for cash on September 13, 2006, at $1.00 per share plus 14,500 warrants						14,500			14,500							14,500

Common stock issued for cash on September 14, 2006, at $1.00 per share plus 50,000 warrants						50,000			50,000							50,000

Common stock issued for cash on September 14, 2006, at $.35 per share plus 863,200 warrants						431,600			288,207							288,207

Common stock issued for cash on September 15, 2006, at $1.00 per share plus 77,510 warrants						47,150			47,510							47,510

Common stock issued for cash on September 15, 2006, at $2.00 per share plus 1,600 warrants						1,600			3,200							3,200

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

	Preferred Stock A				Preferred Stock B				Common Stock						(Restated)			Deficit Accumulated			(Restated)							Accumulated		(Restated)
	Preferred		Par Value $.001		Preferred		Par Value $.001		Common			Par Value $.001			Additional Paid-In			during the Development			Deferred		Stock Subscription			Treasury		Other Comprehensive
	Shares		$ Amount		Shares		$ Amount		Shares			$ Amount			Capital			Stage			Compensation		Receivable			Stock		Loss		Total

Common Stock Shares issued for services rendered:

Common stock issued for services rendered, on September 22, 2006, at $1.04 per share plus 14,123 warrants										14,123						14,746															14,746

Common stock issued for services rendered to old GRC (shell)'s officer, on September 23, 2006, at $2.00 per share										25,000			25			49,975															50,000

Other:

Common stock issued in exchange for investment in real estate on September 18, 2006, at $2.00 per share, plus 22,500 warrants										22,500						45,000															45,000

Common stock issued for conversion of old GRC (shell)'s debt on September 26, 2006, at approximately $0.05 per share										2,681,837			2,682			118,000															120,682

Stock subscriptions receiveable, net																								(582,511	)						(582,511	)

Reclass deferred compensation due to adoption of SFAS 123(R)																(436,000	)					436,000									-

Amortization of deferred compensation																109,000															109,000

Effect of reverse merger September 22, 2006										72,241			48,761			(169,444	)														(120,683	)

Common and Preferred Stock A issued for merger with Mobilestream Oil, Inc. on December 31, 2006, at $0.26 per share plus 27,205,867 warrants		35,236,188		35,236						11,145,255			11,145			3,310,274			(10,498	)											3,346,157

Cancellation of shares for merger with Mobilestream, Inc. on November 28, 2006										(37,500,000	)		(37,500	)		37,500															-

Reclassification of derivative liability on warrants																(16,139,529	)														(16,139,529	)

Net loss for the year ended December 31, 2006																			(5,010,541	)											(5,010,541	)

Balance at December 31, 2006		35,236,188		35,236		-		-		(25,113,329	)		25,113			(6,648,402	)		(7,696,594	)		-		(660,693	)		-		-		(14,945,340	)

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)		Deficit	(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock shares issued for cash :

Common stock issued for cash on January 29, 2007, at $0.30 per share						8,000		8		2,392							2,400

Common stock issued for cash on February 2, 2007, at $0.30 per share						3,500		4		1,046							1,050

Common stock issued for cash on February 21, 2007, at $0.30 per share						6,000		6		1,794							1,800

Common stock issued for cash on March 7, 2007, at $1.08 per share						186,822		187		201,156							201,343

Common stock issued for cash from April 2, 2007, at $0.32 per share						88,800		89		28,327							28,416

Common stock issued for cash from April 23, 2007, at $0.32 per share						66,500		67		21,213							21,280

Common stock issued for cash from April 30, 2007, at $0.32 per share						47,500		48		15,152							15,200

Common stock issued for cash from May 7, 2007, at $0.32 per share						9,100		9		2,903							2,912

Common stock issued for cash from May 14, 2007, at $0.32 per share						39,900		40		12,728							12,768

Common stock issued for cash from May 21, 2007, at $0.32 per share						56,588		57		18,051							18,108

Common stock issued for cash from May 29, 2007, at $0.32 per share						39,000		39		12,441							12,480

Common stock issued for cash from June 4, 2007, at $0.32 per share						19,873		20		6,339							6,359

Common stock issued for cash from June 11, 2007, at $0.32 per share						113,703		114		34,621							34,735

Common stock issued for cash from June 25, 2007, at $0.32 per share						18,600		19		5,933							5,952

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on October 25, 2007, at $2.00 per share					2,500		2		4,998							5,000

Common stock issued for cash on December 20, 2007, at $1.00 per share plus 625,000 warrants					1,000,000		1,000		999,000							1,000,000

Common Stock Shares issued for services rendered:

Common stock issued for services rendered, on March 19, 2007, at $1.00 per share						5,000		5		4,995							5,000

Common stock issued for services rendered, on March 19, 2007, at $0.50 per share						20,000		20		9,980							10,000

Common stock issued for services rendered, on March 20, 2007, at $0.50 per share						11,000		11		10,989							11,000

Common stock issued to employee for services rendered, on April 20, 2007, at $1.38 per share						250,000		250		344,750							345,000

Common stock issued for services rendered, on May 30, 2007, at $1.05 per share						3,417		3		3,301							3,304

Common stock issued to employee for services rendered, on June 1, 2007, at $1.36 per share						194,500		195		264,325							264,520

Common stock issued for services rendered, on July 9, 2007, at $1.00 per share						4,700		4		4,696							4,700

Common stock issued for services rendered, on July 18, 2007, at $0.80 per share						37,500		37		29,963							30,000

Common stock issued to employee for services rendered, on August 1, 2007, at $4.43 per share						100,000		100		442,900							443,000

Common stock issued to employee for services rendered, on August 19, 2007, at $4.50 per share						250,000		250		1,124,750							1,125,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for services rendered, on August 30, 2007, at $2.27 per share					3,745		3		8,497							8,500

Common stock issued for services rendered, on August 30, 2007, at $0.69 per share					30,041		30		20,698							20,728

Common stock issued for services rendered, on August 31, 2007, at $3.41per share					1,000		1		3,409							3,410

Common stock issued for services rendered, on August 31, 2007, at $3.41 per share					10,000		10		34,090							34,100

Common stock issued for services to be performed, service valued on August 31, 2007, at $3.41 per share						350,000		350		1,193,150							1,193,500

Common stock issued for services to be performed, service valued on September 14, 2007, at $2.29 per share						150,000		150		343,350							343,500

Common stock issued to employee for services rendered, on October 1, 2007, at $2.60 per share						300,000		300		779,700							780,000

Common stock issued for services to be performed, service valued on October 02, 2007, at $2.47 per share						350,000		350		864,150							864,500

Common stock issued for services to be performed, service valued on October 02, 2007, at $2.40 per share						75,000		75		179,926							180,001

Common stock issued for services rendered, on October 9, 2007, at $2.69 per share						47,579		47		127,703							127,750

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued to employee for services rendered, on October 22, 2007, at $1.86 per share						50,000		50		92,950							93,000

Common stock issued for services rendered, on October 29, 2007, at $2.25 per share						150,000		150		337,350							337,500

Common stock issued for services rendered, on November 9, 2007, at $3.23 per share						130,000		130		419,770							419,900

Common stock issued for services rendered, on November 19, 2007, at $3.50 per share						50,000		50		174,950							175,000

Common stock issued for services rendered, on November 26, 2007, at $3.01 per share						30,000		30		90,270							90,300

Common stock issued for services rendered, on December 3, 2007, at $2.00 per share						45,094		45		89,955							90,000

Common stock issued for services rendered, on December 4, 2007, at $3.15 per share						50,000		50		157,450							157,500

Common stock issued for services rendered, on December 11, 2007, at $2.50 per share						200,000		200		499,800							500,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

														(Restated)					(Restated)										(Restated)
	Preferred Stock A				Preferred Stock B				Common Stock							Deficit Accumulated											Accumulated
	Preferred		Par Value $.001		Preferred		Par Value $.001		Common			Par Value $.001		Additional Paid-In		during the Development			Deferred		Stock Subscription			Treasury			Other Comprehensive
	Shares		$ Amount		Shares		$ Amount		Shares			$ Amount		Capital		Stage			Compensation		Receivable			Stock			Loss		Total

Common stock issued for services rendered, on December 17, 2007, at $1.446 per share										400,000			400		578,052															578,452

Common stock issued for services rendered, on December 17, 2007, at $2.50 per share										100,000			100		249,900															250,000

Common stock issued for services rendered, on December 18, 2007, at $3.02 per share										50,000			50		150,950															151,000

Common stock issued for services rendered, on December 21, 2007, at $3.00 per share										40,000			40		119,960															120,000

Common stock issued for services rendered, on December 27, 2007, at $3.10 per share										50,000			50		154,950															155,000

Other:

Preferred Stock B Shares issued for settlement of services						1,000		1							399,999															400,000

Treasury stock, purchased from former officer on May 17, 2007, at $.70 per share										(94,961	)														(66,473	)				(66,473	)

Stock subscriptions receiveable, net																						475,000								475,000

Amortization of deferred compensation															109,000															109,000

Reclassification of derivative liability into additional paid in capital due to cancellation of warrants															2,187,850															2,187,850

Net loss for the year ended December 31, 2007 (Restated, see Note 20)																	(6,578,331	)												(6,578,331	)

Balance at December 31, 2007 (Restated, see Note 20)		35,236,188		35,236		1,000		1		30,263,330			30,358		6,328,170		(14,274,925	)		-		(185,693	)		(66,473	)		-		(8,133,326	)

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock shares issued for cash :

Common stock issued for cash on February 19, 2008, at $2.00 per share						17,000		17		33,983							34,000

Common stock issued for cash on March 5, 2008, at $1.61 per share						31,057		31		49,969							50,000

Common stock issued for cash on March 18, 2008, at $1.00 per share, plus 850,669 warrants						850,669		851		849,818							850,669

Common stock issued for cash on March 26, 2008, at $1.00 per share, plus 1,138,500 warrants						1,138,500		1,138		1,137,362							1,138,500

Common stock issued for cash on March 26, 2008, at $1.18 per share						9,000		9		10,611							10,620

Common stock issued for cash on April 1, 2008, at $1.00 per share, plus 3,387,980 warrants						3,387,980		3,388		3,384,593							3,387,981

Common stock issued for cash on April 11, 2008, at $1.11 per share, plus 1,929,775 warrants						1,929,775		1,930		2,148,662							2,150,592

Common stock issued for cash on April 25, 2008, at $1.19 per share, plus 1,487,139 warrants						1,487,139		1,487		1,771,366							1,772,853

Common stock issued for cash on May 15, 2008, at $1.10 per share plus 39,100 warrants						39,100		39		42,891							42,930

Common stock issued for cash on June 12, 2008, at $1.00 per share, plus 236,909 warrants						236,909		237		236,672							236,909

Common stock issued for cash on June 23, 2008, at $1.00 per share						250,000		250		249,750							250,000

Common stock issued for cash on July 1, 2008, at $1.00 per share, plus 391,730 warrants						391,730		392		391,338							391,730

Common stock issued for cash on July 21, 2008, at $1.00 per share, plus 73,480 warrants						73,480		73		73,407							73,480

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for cash on August 21, 2008, at $.88 per share						10,000		10		8,740							8,750

Common stock issued for cash on September 4, 2008, at $1.04 per share						13,867		14		14,384							14,398

Common stock issued for cash on September 29, 2008, at $1.00 per share						1,723,844		1,724		1,722,120							1,723,844

Common stock issued for cash on October 7, 2008, at $1.00 per share						497,375		497		496,878							497,375

Common stock issued for cash on October 7, 2008, at $1.00 per share						7,500		8		7,492							7,500

Common stock issued for cash on October 10, 2008, at $1.00 per share						10,000		10		9,990							10,000

Common stock issued for cash on October 15, 2008, at $1.00 per share, plus 2,500 warrants						241,000		241		240,359							240,600

Common stock issued on December 16, 2008, at $0 per share						850,000		850		1,089							1,939

Common stock shares issued for services rendered:

Common stock issued for services rendered, on February 1, 2008, at $2.95 per share						100,000		100		294,900							295,000

Common stock issued for services rendered, on February 6, 2008, at $2.63 per share						150,000		150		394,350							394,500

Common stock issued for services rendered, on February 13, 2008, at $2.39 per share						12,500		13		29,862							29,875

Common stock issued for services rendered, on February 15, 2008, at $2.42 per share						20,000		20		48,380							48,400

Common stock issued for services rendered, on February 28, 2008, at $2.15 per share						25,000		25		53,725							53,750

Common stock issued for services rendered, on February 29, 2008, at $2.19 per share						175,000		175		383,075							383,250

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for services rendered, on March 14, 2008, at $2.10 per share						5,000		5		10,495							10,500

Common stock issued for services rendered, on March 18, 2008, at $1.60 per share						30,000		30		47,970							48,000

Common stock issued for services rendered, on March 19, 2008, at $1.60 per share						20,000		20		31,980							32,000

Common stock issued for services rendered, on March 31, 2008, at $1.90 per share						350,000		350		664,650							665,000

Common stock issued for services rendered, on April 1, 2008, at $1.95 per share						70,000		70		136,430							136,500

Common stock issued for penalty, on April 2, 2008, at $1.84 per share						50,000		50		91,950							92,000

Common stock issued for services rendered, on April 4, 2008, at $1.90 per share						20,000		20		37,980							38,000

Common stock issued for services rendered, on April 4, 2008, at $1.90 per share						1,066,666		1,067		2,025,598							2,026,665

Common stock issued for services rendered, on April 14, 2008, at $3.05 per share						150,000		150		457,350							457,500

Common stock issued for services rendered, on April 29, 2008, at $3.07 per share						883,333		883		2,710,950							2,711,833

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for services rendered, on May 7, 2008, at $2.55 per share						1,000,000		1,000		2,549,000							2,550,000

Common stock issued for services rendered, on May 12, 2008, at $2.65 per share						20,000		20		52,980							53,000

Common stock issued for services rendered, on May 13, 2008, at $2.79 per share						50,000		50		139,450							139,500

Common stock issued for services rendered, on June 3, 2008, at $2.10 per share						150,000		150		314,850							315,000

Common stock issued for services rendered, on June 11, 2008, at $2.25 per share						88,750		89		199,599							199,688

Common stock issued for services rendered, on June 13, 2008, at $2.25 per share						125,000		125		281,125							281,250

Common stock issued for penalty to "POOF", on June 30, 2008, at $2.09 per share						650,000		650		1,357,850							1,358,500

Common stock issued for services rendered, on July 14, 2008, at $1.66 per share						200,000		200		331,800							332,000

Common stock issued for services rendered, on July 25, 2008, at $1.40 per share						75,000		75		104,925							105,000

Common stock issued for services rendered, on August 8, 2008, at $1.03 per share						75,000		75		77,175							77,250

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

									(Restated)			(Restated)				(Restated)
	Preferred Stock A		Preferred Stock B		Common Stock						Deficit Accumulated				Accumulated
	Preferred	Par Value $.001	Preferred	Par Value $.001	Common		Par Value $.001		Additional Paid-In		during the Development	Deferred	Stock Subscription	Treasury	Other Comprehensive
	Shares	$ Amount	Shares	$ Amount	Shares		$ Amount		Capital		Stage	Compensation	Receivable	Stock	Loss	Total

Common stock issued for services rendered, on August 25, 2008, at $1.25 per share						6,000		6		7,494							7,500

Common stock issued for services rendered, on September 8, 2008, at $.96 per share						1,500,000		1,500		1,438,500							1,440,000

Common stock issued for services rendered, on October 7, 2008, at $1.49 per share						100,000		100		148,900							149,000

Common stock issued for services rendered, on October 15, 2008, at $1.25 per share						60,000		60		74,940							75,000

Common stock issued for services rendered, on October 20, 2008, at $1.50 per share						125,000		125		187,375							187,500

Common stock issued for services rendered, on October 24, 2008, at $1.37 per share						100,000		100		136,900							137,000

Common stock issued for services rendered, on October 31, 2008, at $1.55 per share, plus 300,000 warrants						150,000		150		232,350							232,500

Common stock issued for services rendered, on December 16, 2008, at $1.35 per share						12,600		13		16,997							17,010

Common stock issued for services rendered, on December 18, 2008, at $1.08 per share						100,000		100		107,900							108,000

Common stock issued to employees for services rendered, on June 26, 2008, at $2.08 per share						7,500		8		16,632							16,640

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

(Restated)

Preferred Stock A

Preferred Stock B

Common Stock

Deficit Accumulated

Accumulated

Preferred

Par Value $.001

Preferred

Par Value $.001

Common

Par Value $.001

Additional Paid-In

during the Development

Deferred

Stock Subscription

Treasury

Other Comprehensive

$ Amount

Capital

Stage

Compensation

Receivable

Stock

Loss

Total

Common stock warrants and option activity:

Common Stock Warrants issued for services (BOD) on February 7, 2008, at $2.43 per share (6,000 warrants)

21,870

Common Stock Warrants issued for services (BOD) on May 21, 2008, at $2.47 per share (9,000 warrants)

14,795

Common Stock Warrants issued for services (BOD) on September 23, 2008, at $2.25 per share (25,000 warrants)

50,000

Common Stock Warrants issued for services (BOD) on November 13, 2008, at $1.35 per share (20,000 warrants)

24,600

Common Stock Warrants issued for services to non-employee on September 3, 2008, at $2.75 per share (76,500 warrants)

78,030

Common Stock Warrants issued for services to non-employee on October 1, 2008, at $1.36 per share (300,000 warrants)

102,285

Common Stock Warrants exercised cashless by Nutmeg/Black Diamond on April 2, 2008, at $1.84 per share

58,478

(58

)

Common Stock Warrants exercised cashless by Nutmeg/Black Diamond on April 2, 2008, at $1.84 per share

66,011

(66

)

Common Stock Warrants exercised cashless by POOF on July 3, 2008, at $1.42 per share

325,957

326

(326

)

Common Stock Options issued to employee on October 1, 2008, at fair value of $1.04 per share

1,040,000

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

																		(Restated)						(Restated)										(Restated)
	Preferred Stock A						Preferred Stock B						Common Stock								Deficit Accumulated										Accumulated
	Preferred			Par Value $.001			Preferred			Par Value $.001			Common			Par Value $.001		Additional Paid-In			during the Development			Deferred		Stock Subscription		Treasury			Other Comprehensive
	Shares			$ Amount			Shares			$ Amount			Shares			$ Amount		Capital			Stage			Compensation		Receivable		Stock			Loss			Total

Other:

Preferred stock B - converted to common stock on April 8, 2008								(1,000	)		(1	)		206,559			207		(206	)

Preferred stock A - converted by former officer into common stock on June 25, 2008		(1,791,064	)		(1,791	)								895,532			895		896																-

Preferred stock A - converted by former officer into common stock on August 13, 2008		(33,440,124	)		(33,440	)								16,720,062			16,720		16,720																-

Treasury stock, purchased from former officer on August 13, 2008, for $.25 per share														(6,600,000	)														(1,650,000	)					(1,650,000	)

Stock subscription receivable, net																			(130,518	)							185,693								55,175

Record other comprehensive loss - net unrealized gain /(loss) on short-term investments:

Other comprehensive loss - net unrealized loss recorded at June 30, 2008																																(142,312	)		(142,312	)

Other comprehensive loss - net unrealized loss recorded at September 30, 2008																																(819,015	)		(819,015	)

Other comprehensive loss - net unrealized loss recorded at December 31,2008																																(114,073	)		(114,073	)

Reclassification of unrealized loss deemed to be other than temporary																																837,850			837,850

Amortization and write-off of deferred compensation																			218,000																218,000

Net loss for the year ended December 31, 2008																						(15,495,349	)												(15,495,349	)

Balance at December 31, 2008		5,000		$	5			-		$	-			62,854,203		$	69,549	$	35,842,053		$	(29,770,274	)	$	-	$	-	$	(1,716,473	)	$	(237,550	)	$	4,187,310

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

															(Restated)					(Restated)										(Restated)
	Preferred Stock A						Preferred Stock B				Common Stock						Deficit Accumulated										Accumulated
	Preferred			Par Value $.001			Preferred		Par Value $.001		Common		Par Value $.001		Additional Paid-In		during the Development			Deferred		Stock Subscription		Treasury			Other Comprehensive
	Shares			$ Amount			Shares		$ Amount		Shares		$Amount		Capital		Stage			Compensation		Receivable		Stock			Loss			Total

Common stock shares issued for services rendered:

Common stock issued for services rendered, on Jan. 8, 2009, at $1.17 per share plus 150,000 warrants												60,000		60		70,140															70,200

Common stock issued for services rendered, on Feb 24, 2009, at $1.30 per share												15,000		15		19,485															19,500

Common stock issued for services rendered, on March 20, 2009, at $1.25 per share plus 60,041 warrants												19,000		19		23,731															23,750

Common stock warrants and option activity:

Common Stock Warrants issued for services Non-Employees on Jan. 2, 2009, at $1.50																25,787															25,787

Common Stock Warrants issued for services Non-Employees on Feb. 18, 2009, at $2.50																31,666															31,666

Common Stock Warrants issued for services Non-Employees on March 2, 2009, at $1.02																9,103															9,103

Common Stock Warrants issued for services (BOD) on March 27, 2009, at $1.04																27,119															27,119

Common Stock Warrants amortization expense issued for services Non-Employees on October 31, 2008, at $1.58																102,285															102,285

Record Common Stock Options expense for options issued to employee on October 1, 2008, at fair value of $1.04 per share																260,000															260,000

Other:

Preferred stock A - converted to common stock on January 6, 2009		(5,000	)		(5	)						2,500		2		3															-

Record other comprehensive loss - unrealized loss recorded at March 31, 2009																												(312,891	)		(312,891	)

Net loss for the period ended March 31, 2009																		(1,697,362	)												(1,697,362	)
																		.
Balance at March 31, 2009		-		$	-			-	$	-		62,950,703	$	69,645	$	36,411,372	$	(31,467,636	)	$	-	$	-	$	(1,716,473	)	$	(550,441	)	$	2,746,467

See accompanying notes to the condensed consolidated financial statements.

Global Resource Corporation

(A Development Stage Company)

Notes to the Condensed Consolidated Financial Statements

March 31, 2009

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and should be read in conjunction with the consolidated financial statements of Global Resources Corporation included in form 10-K for the year ending December 31, 2008. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2009 are not necessarily indicative of the results that maybe expected for the year ended December 31, 2009.

Nature of Business

Global Resource Corporation’s (“GRC” or, “the Company”) business plan is to research, develop and market the business of decomposing petroleum-based materials by subjecting them to a fixed-frequency microwave radiation (the “Technology”) at specifically selected frequencies for a time sufficient to at least partially decompose the materials, converting the materials into hydrocarbons and fossil fuels from sources such as tires, oil shale, capped wells, shale deposits and waste oil streams.

The Company’s business goals for exploitation of the Technology are as follows:

The design, manufacture and sale of machinery and equipment units, embodying the Technology.

The ownership and operation of plants to use the Technology in conjunction with other investors.

The formation of Joint-Venture relationships with established companies.

The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7, "Accounting and Reporting by Development Stage Enterprises". The Company has devoted substantially all of its efforts to business planning and development, as well as allocating a substantial portion of its time and resources in bringing its product to the market and the raising of capital. The Company has not commenced any commercial operations as of December 31, 2008.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”)

Prior to September 22, 2006, the old GRC (shell) was a shell company (“old GRC (shell)”).

On September 22, 2006, the old GRC shell completed the acquisition of Carbon Recovery Corporation (“CRC”), a New Jersey corporation formed on July 19, 2002, pursuant to a July 2006 plan and agreement of reorganization (“CRC Acquisition Agreement”).

Notes to the Condensed Consolidated Financial Statements

NOTE 1- NATURE OF BUSINESS AND BASIS OF PRESENTATION (CONTINUED)

Basis of Presentation (continued)

On December 31, 2006, the Company completed the acquisition of Mobilestream Oil, Inc. (“Mobilestream”) in a transaction deemed to be a merger of entities under common control.

Each of the foregoing transactions changed the reporting entity of the Company. As a result of the CRC transaction, the Company’s reporting reflected the historical accounts of CRC. Subsequently, as a result of the Mobilestream transaction, the Company’s financial statements were combined with Mobilestream on an “as-if” pooling basis since the date common control was established. As a result of a February 2006 recapitalization transaction between Mobilestream, legal acquirer, and PSO Enterprises, Inc. (“PSO”) (surviving corporation of a January 2006 merger with a related party , Careful Sell Holdings, LLC (“Careful Sell”), accounting acquirer, common control was established at February 17, 2005, the inception date of Careful Sell.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Short Term Investments

Cash in excess of operating requirements is invested in marketable debt and equity securities, all of which are classified as available for sale, and are carried at their fair value. The unrealized gains or losses of these investments, which are deemed to be temporary in nature are recorded as part of accumulated other comprehensive income (loss), are included in the consolidated statement of stockholders’ equity. Realized gains or loss and declines in value judged to be other-than-temporary on these investments are recognized as realized gains or losses in the consolidated statements of operations and comprehensive income (loss).

Patents

Legal fees associated with patents, which are expected to be issued are recorded as prepaid patent costs on the accompanying consolidated balance sheets. Upon approval by the relevant patent office, the prepaid patent costs will be reclassified to an intangible asset, and amortized over the expected life of the patent. The value of the patent(s) will be reviewed each year for possible impairment and expensed in the year it is determined that a write-down in the value of the patent is required. Prepaid patent costs associated with patents which are not approved or abandoned are expensed in the period in which such patents are not approved or are abandoned.

Notes to the Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Research and Development Costs

The Company complies with the accounting and reporting requirements of SFAS No. 2, “Accounting for Research and Development Costs (as amended)”. Research and development (“R & D”) costs consist of all activities associated with the development and enhancement of products using the Company’s microwave Technology. R & D costs consist primarily of contract engineer labor and salaries of our in-house engineers, lab supplies used in testing and expenses of equipment used to test and develop our Technology. R & D costs are expensed when incurred. The amounts charged to operations for the three months ended March 31, 2009 and 2008, and for the cumulative period July 19, 2002 (inception) to March 31, 2009 were $242,899, $126,258 and $1,523,938, respectively.

Stock-Based Compensation

Effective January 1, 2006, the Company adopted SFAS No. 123R, “Share-Based Payment,” requiring the expense recognition of the estimated fair value of all share-based payments issued to employees. Prior to this, the estimated fair value associated with such awards was not recorded as an expense, but rather was disclosed in a footnote to the Company’s consolidated financial statements. The compensation cost associated with these awards is recorded as an expense within the same functional expense category as cash compensation for the respective grantee. No tax benefit has been recognized with respect to this expense.

The Company expects that share-based compensation expense will continue to have a material impact on its financial results for all subsequent fiscal years.

Prior to January 1, 2006, the Company accounted for its stock-based compensation using the intrinsic value method of accounting under the provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”). The Company’s stock-based compensation awards have generally been granted with an exercise price equal to the estimated fair value of the underlying common stock on the grant date, and accordingly, any stock-based compensation related to stock option grants was not material under APB No. 25. The Company applied the disclosure provisions under SFAS No. 123, “Accounting for Stock-Based Compensation” and related interpretations as if the fair value had been applied in measuring compensation expense. As a result, stock-based compensation expense, based upon the fair value method, is included as a pro forma disclosure in the notes to the Company’s consolidated financial statements.

The effect on the Company’s net loss as if the Company had applied the fair value recognition provisions of SFAS No. 123R to stock-based compensation during the cumulative period July 19, 2002 (inception) to March 31, 2009 was not material.

On January 1, 2006, the Company adopted the provisions of SFAS No. 123R using the modified prospective transition method. The total expense associated with stock-based employee compensation was approximately $260,000 for the three months ended March 31, 2009, and $1,300,000 for the period July 19, 2002 (inception) to March 31, 2009. There was no expense associated with stock-based employee compensation for the three months ended March 31, 2008.

Notes to the Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation (continued)

For non-employees, stock grants and stock issued for services are valued at either the invoiced or contracted value of services provided, or to be provided, or the fair value of stock at the date the agreement is reached, whichever is more readily determinable. Warrants or options issued for services provided, or to be provided, are valued at fair value at the date the agreement is reached.

Earnings (Loss) Per Share of Common Stock

The Company complies with the accounting and reporting requirements of SFAS No. 128, “Earnings Per Share”. Basic loss per share is calculated by dividing net loss attributable to common shares by the weighted average number of outstanding common shares for the period. Diluted earnings per common share includes dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants and the conversion of convertible preferred stock.

Unexercised common stock options and warrants to purchase common stock, and preferred stock convertible into common stock as of March 31, 2009 and 2008 respectively, are as follows:

	As of March 31, 2009		As of March 31, 2008
Options		5,200,000		200,000

Warrants		21,725,836		15,318,182

Convertible preferred stock		-		17,822,153

Total		26,925,836		33,340,335

The foregoing common stock equivalents were excluded from the calculation of diluted net loss per common share because their inclusion would have been anti-dilutive as of March 31, 2009.

Derivative Financial Instruments

The Company accounts for financial instruments that are indexed to and potentially settled in, its own stock in accordance with the provisions of Emerging Issues Task Force (“EITF’) No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock”. These financial instruments include freestanding warrants and options to purchase the Company’s common stock. Under certain circumstances that would require the Company to settle these equity items in cash, and without regard to probability, EITF No. 00-19 would require the classification of all or part of the item as a liability and the adjustment of that reclassified amount to fair value at each reporting date, with such adjustments reflected in the Company’s consolidated statements of operations.

Notes to the Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”). SFAS No. 161 is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS No. 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS No. 161 became effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company adopted SFAS No. 161 in the first quarter of 2009. The adoption of SFAS No. 161 did not have a material impact on the consolidated financial statements.

On April 9, 2009, the FASB issued FASB Staff Position (“FSP”) FAS 107-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1”). FAS FSP 107-1 amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. FAS FSP 107-1 also amends APB No. 28, “Interim Financial Reporting”, to require those disclosures in summarized financial information at interim reporting periods. FAS FSP 107-1 shall be effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An entity may early adopt this FSP if certain requirements are met. This FSP does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this FSP requires comparative disclosures only for periods ending after initial adoption. The Company expects to adopt this FSP for the quarter ending June 30, 2009 and does not expect the adoption of this FSP to have a material impact on its consolidated financial statements.

On April 9, 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”). FSP FAS 157-4 affirms that the objective of fair value when the market for an asset is not active is the price that would be received to sell the asset in an orderly transaction; clarifies and includes additional factors for determining whether there has been a significant decrease in market activity for an asset when the market for that asset is not active; eliminates the proposed presumption that all transactions are distressed (not orderly) unless proven otherwise. The FSP instead requires an entity to base its conclusion about whether a transaction was not orderly on the weight of the evidence. In addition, FSP FAS 157-4 requires an entity to disclose a change in valuation technique (and the related inputs) resulting from the application of the FSP and to quantify its effects, if practicable. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009 if certain requirements are met. It must be applied prospectively and retrospective application is not permitted. The Company expects to adopt this FSP for the quarter ending June 30, 2009 and does not expect the adoption of this FSP to have a material impact on its consolidated financial statements.

Notes to the Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (continued)

On April 9, 2009, the FASB issued FSP FAS 115-2 and FSP FAS 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments.” These FSP’s are intended to bring consistency to the timing of impairment recognition, and provide improved disclosures about the credit and noncredit components of impaired debt securities that are not expected to be sold. The measure of impairment in comprehensive income remains fair value. These FSP’s also require increased and more timely disclosures regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. These FSP’s shall be effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted. If an entity elects to adopt early either FSP FAS 157-4 or FSP FAS 107-1 and APB. No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments”, the entity also is required to adopt early these FSP’s. Additionally, if an entity elects to adopt early these FSP’s, it is required to adopt FSP FAS 157-4

These FSP’s do not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, these FSP’s require comparative disclosures only for periods ending after initial adoption.

Reclassification

Certain amounts for the three months ended March 31, 2008, and for the cumulative period from July 19, 2002 (inception) to March 31, 2009 have been reclassified in the comparative consolidated financial statements to be comparable to the presentation for the three months ended March 31, 2009. These reclassifications, along with certain income adjustments, are further described in Note 11.

NOTE 3 - GOING CONCERN

As shown in the accompanying condensed financial statements, the Company incurred substantial net losses in the amount of $1,697,362 for the three months ended March 31, 2009 and $31,467,636 for the cumulative period from July 19, 2002 (inception) to March 31, 2009. The Company also had negative cash flows from its operations in the amount of $1,437,965 and $13,982,458 for the three month period ended March 31, 2009 and for the cumulative period from July 19, 2002 (inception) to March 31, 2009, respectively. Additionally, the Company has had no revenue since inception.

Based on the Company’s current operating plan, the total cash expenditures needed for the next twelve months are expected to exceed the Company’s cash, cash equivalents and short-term investments, aggregating approximately $2,500,000, as of March 31, 2009. Our assessment of our cash needs may be affected by changes in our assumptions relating to our technological and engineering requirements in the development of our products as well as payroll, staff and administrative related matters.

Notes to the Condensed Consolidated Financial Statements

NOTE 3 - GOING CONCERN (CONTINUED)

The Company has completed a prototype fixed frequency microwave reactor system, named “Patriot-1” which it has used to demonstrate the decomposition of tires into diesel oil fuel, methane gas and carbon ash. From May 4, 2009 to May 8, 2009, the Company provided a public demonstration of the Patriot-1 to prospects, partners and dignitaries at our outside contract manufacturer’s facility (Ingersoll Production System) located in Rockford, Illinois. The Company is currently in negotiations with prospective customers for orders of our equipment. It will take the Company approximately twelve months to deliver a system from the time the Company receives an order. Each order will be accompanied by a cash deposit from the purchaser which will be recorded as deferred revenue until the equipment is shipped, installed and operating successfully at the destination site.

The Company’s plans to address the expected cash shortfall are dependent upon its ability to raise capital or to secure significant sales orders of our system as a source of revenue. There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations thus raising substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and liabilities in the normal course of business.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern.

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company has engaged Clark Resources, Inc. (“Clark”), a governmental relations consulting firm located in Harrisburg, Pennsylvania, to provide consulting services with respect to governmental issues concerning permits and funding. The Company has a monthly retainer agreement in the amount of $5,000 with Clark and for the three month period ended March 31, 2009 and 2008, and for the cumulative period July 12, 2002 (inception) to March 31, 2009, paid Clark Resources a total of $15,000, $15,000, and $169,670, respectively. The president and CEO of Clark is Frederick A. Clark, who has served as a director of the Company since December 2006.

On October 1, 2008, the Company entered into a four month consulting agreement with LP (Origination) Limited (“LP”), a company incorporated in the United Kingdom, to provide consulting services relating to the oil and gas industries. The Company issued 100,000 shares of its common stock to LP on October 7, 2008 for payment of these consulting services, and the related $37,250 of the total charge of $149,000 was recorded as prepaid services on the consolidated balance sheet at December 31, 2008. For the three month period ending March 31, 2009, a charge to operations, which is reflected in general and administrative expenses on the condensed statement of operations and comprehensive loss, was $56,750. The president of LP is Peter A. Worthington, who has served as a director of the Company since August 2008. In addition to the common shares issued to LP, the Company also paid a fee in the amount of $90,000 to Mr. Worthington for the services provided under the agreement in December 2008.

Notes to the Condensed Consolidated Financial Statements