In The News

Nov 12, 2010

Sea 2 Sky Energy Acquires ecoTECH Energy Group


Financial Statements and Exhibits, Changes in Registrant's Certifying Accountant
General
Item 9.01 Financial Statements and Exhibits.

As used in this Current Report on Form 8-K and unless otherwise indicated, the terms the "Company," "we," "us," and "our" refer to Sea 2 Sky Corporation after giving effect to our acquisition of ecoTECH Energy Group (Canada) Inc., and the related transactions described below, unless the context requires otherwise.

Item 1.01 Entry into a Material Definitive Agreement

On November 9, 2010, Sea 2 Sky Corporation executed that certain Business Combination Agreement (the "Agreement') by and among Sea 2 Sky Corporation, 7697112 Canada Corp. and ecoTECH Energy Group (Canada) Inc. ("ecoTECH") pursuant to which ecoTECH will amalgamate with and into 7697112 Canada Corp., a wholly owned subsidiary of Sea 2 Sky Corporation ("Subco") on the terms and conditions set forth under the Agreement whereby each issued Class A common share of ecoTECH shall be converted into the right to receive one share of Sea 2 Sky Corporation.

This description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which is attached as an exhibit to this Report and incorporated herein by reference.

 


Item 2.01 Completion of Acquisition or Disposition of Assets.

The ecoTECH Acquisition

On November 12, 2010, we completed the acquisition (the "Acquisition") of all of the issued and outstanding shares of ecoTECH Energy Group (Canada) Inc., pursuant to the Agreement.

Under the terms of the Agreement, at closing, each holder of Class A common shares of ecoTECH received one share of our common stock in exchange for each Class A common share they held of ecoTECH, requiring the issuance of 110,606,239 shares of our common stock. ecoTECH then amalgamated with Subco, our wholly owned subsidiary, resulting in our 100% ownership of ecoTECH.

The closing of the Acquisition represented a change in control of our company. For accounting purposes, this change in control constitutes a re-capitalization of our company, and the acquisition has been accounted for as a reverse merger whereby we, as the legal acquirer, are treated as the acquired entity, and ecoTECH, as the legal subsidiary, is treated as the acquiring company with the continuing operations. The financial statements of ecoTECH will be reported on an ongoing basis due to a change in reporting entity.

As a consequence of our acquisition of ecoTECH, we intend to conduct the business described under the Section of this Current Report on Form 8-K under the heading "Item 1.-Business-The Business of ecoTECH" as our sole business.

Upon the closing of the Acquisition the following persons held the following positions with our Company:

 

Name                            Position with the Company

C. Victor Hall      Chief Executive Officer and a director (Chairman)
Erik Odeen               Chief Financial Officer and a director
Terry J. Ferguson        Executive Vice President and a director
John Matthews            Executive Vice President and a director
Anne Sanders                  Vice President and a director

As a result, on the closing date, beneficial ownership of our common stock was as follows:

� The holders of ecoTECHacquired in the aggregate beneficial ownership of approximately 58% of our issued and outstanding common stock;

� The holders of our common stock immediately prior to the consummation of the Acquisition continued to hold approximately 42% of our issued and outstanding common stock after the completion of the Acquisition.

A discussion of the beneficial ownership of our directors, officers and principal stockholders is set forth below in the section entitled "Item 
4.-Security Ownership of Certain Beneficial Owners and Management" beginning on page 16 of this Current Report on Form 8-K and is incorporated herein by reference.

FORM 10 INFORMATION

1. Business

The following describes the business of Sea 2 Sky Corporation after giving effect to the acquisition of ecoTECH. Whenever the terms "our," "we" "us" and the "Company" are used herein they refer to Sea 2 Sky Corporation, a Nevada corporation, together with ecoTECH, our wholly-owned subsidiary, unless the context otherwise provides.

 


Corporate Overview and History of SEA 2 SKY Corporation

General

We were incorporated under the laws of the State of Nevada on November 16, 2005 under the name "Sea 2 Sky Corporation". We were initially established to provide travel related services to tourists in Canada and other countries. Due to an economic downturn, we abandoned the travel service business in the first half of fiscal 2009. Accordingly, results from operations related to the travel business have been reclassified from current operations to that of discontinued operations. Effective March 1, 2009, we transitioned our business focus to that of a world-wide renewable energy provider. Prior to the acquisition of ecoTECH, we were a development stage company that intended to obtain sources of biomass supply streams and convert them into green or alternative energy products.

The Business of ecoTECH

Overview

ecoTECH was incorporated under the Canada Business Corporations Act ("CBCA") on November 28, 2007 under the name "ecoPHASER Energy Corp." Our name was changed to "ecoTECH Energy Group (Canada) Inc. on July 1, 2010. On November 12, 2010, ecoTECH was amalgamated with 7697112 Canada Corp., a federally incorporated company that was a wholly owned subsidiary of Sea 2 Sky Corporation, and as a result of this amalgamation, ecoTECH is now a wholly owned subsidiary of Sea 2 Sky Corporation. ecoTECH has no subsidiaries and is not a reporting issuer in any jurisdiction of Canada or the United States.

ecoTECH is a development-stage renewable energy company which plans to manufacture biomass-fuelled power stations that produce renewable and sustainable "green" energy products.

ecoTECH's current executive offices are located at 101-26633 Gloucester Way, Langley, BC V4W 3S8 and its telephone number is (604) 288-8263.

Industry Overview

Renewable Energy Industry

Worldwide growth in the renewable energy industry is set to reach more than $250 billion by the year 2017. In 2007, the biofuels market reached $25.4 billion globally, 40% of which came from the United States. Accordingly, we believe there is approximately $225 billion of market opportunity in the next seven years.

In the United States, it is projected that 250 gigawatts (GW) of new generating capacity will be required between 2009 and 2035; of this capacity, 37 percent will come from renewable energy sources. Nonhydro-electric renewable generation will account for 41 percent of the growth in total electricity generation from 2008 to 2035. Power generated from biomass, which we believe is the most renewable energy source in the world, is expected to grow from 0.9 percent in 2008 to 5.5 percent in 2035. A large portion of this increase comes from increased co-firing-a process in which biomass is mixed with coal in coal-firing plants.

The U.S. Energy Information Administration ("EIA") projects that over the next 23 years (by 2035), the role of fossil fuel in providing energy will fall from 84% to 78%, and renewable energy sources will supply in excess of 14% of the nation's total consumption.

ecoTECH's Business Plan

ecoTECH plans to manufacture biomass-fuelled combined heat and power (CHP) stations that produce renewable and sustainable "green" energy products. Over the past 30 years, ecoTECH's executives have developed and refined a "proprietary thermal gasification" technology to create clean-burning waste-to-energy cogeneration Power Stations. This combined heat and power (CHP) technology produces: (i) electricity, which can be channeled to utilities and end-users via the Grid; and (ii) heat which can be used to fuel a torrefied biomass briquette manufacturing facility, allowing for a "green-fuel" offering and related revenue stream. ecoTECH will specialize in the development and operation of CHP Power Stations and intends to build five CHP Power Stations in North American in the next five to seven years.

 


ecoTECH intends to strategically position multiple CHP Power Stations in order to: (i) reduce the reliance on fossil fuels by providing a sustainable and environmentally friendly source of energy and fuel products manufactured from local biomass feedstocks; (ii) meet specific local needs for decentralized power, while reducing the cost of biomass transportation; (iii) assist communities meet federal and state renewable energy and reduced emissions mandates; and, (iv) provide local jobs and community development for the project communities.

ecoTECH's Advantages:

ecoTECH believes that its proprietary technology; prototype manufacturing equipment, and access to feedstock resources provide advantages over potential competitors to meet their objectives.

Proprietary Technology:

During the past 30 years, ecoTECH's executives developed and refined its proprietary thermal gasification technology to create clean-burning waste-to-energy cogeneration Power Stations which would provide optimal revenue performance, correct volumetric fuel flow systems and minimum environmental impact. ecoTECH's power stations combine technologies to effectively process and convert biomass and other feedstocks, under environmentally friendly conditions, into electricity. ecoTECH's proprietary design uses multiple fuel stocks and produces higher mass-to-energy with almost zero harmful emissions to the environment. Additionally, ecoTECH has acquired the licensing rights to adjunct technologies (hydroponic harvesting, cold storage, etc.) which, when requested, can be coupled with the power stations to provide cost-effective solutions for rural community needs.

Prototype Equipment:

ecoTECH's technology has been developed and fine-tuned via initial prototypes created through private funding and tested in the Company's lab facilities in Langley, BC. ecoTECH is currently in discussions with external engineering firms for independent testing and feasibility studies. Commercial scale manufacturing equipment will be constructed upon obtaining additional capital funding through debt and equity financing. Third party technologies/applications identified for use by ecoTECH have been tested and currently exist in commercial environments.

Bio-Mass Resources

ecoTECH has already established long-term agreements for sources of woody biomass with land owners; tree farm license ("TFL") holders; First Nations bands in British Columbia and Alberta, Canada; and Native Americans in Montana, U.S. Currently, contracts and/or letters of intent have been secured from two North American sources which account for multiple-year fiber supply in excess of 1.5 million tons biomass feedstock per year.

ecoTECH's Divisions

ecoTECH intends to conduct its business through two divisions: (i) CHP Bio Energy Production Division and (ii) Torrefied Bio-Fuels Manufacturing and Distribution Division.

CHP Bio-Energy Production Division

The CHP Bio-Energy Production division uses biomass-to-energy technology to produce and provide renewable, clean power directly to the Grid, utility companies, power brokers, large industrial manufacturers and other end users.

ecoTECH's combined heat and power ("CHP") Bio-Energy Power Station produces heat and power by converting sustainable (closed or open loop) biomass or similar biomass through a thermal gasification process into heat (producing virtually zero harmful emissions), which is then converted into electricity.

ecoTECH has proprietary thermal power generation technology utilizing several patented components making it arguably the cleanest and most efficient thermal technology today. ecoTECH combines its own technology with the proven high quality technologies of both Turboden (a United Technologies company) and WOW Energies to transition the heat generated into usable power.

 


During the electricity generation process, a heat by-product is produced which would normally be classified as "waste heat"; however, ecoTECH endeavors to utilize all available energy from these highly efficient units, so the energy in the by-produced heat is captured and circulated in an ecoTECH Thermax� site heating high-flow hot oil systems. The oil is transferred in underground pipes at a temperature of 700o F. (370o C), and is used to heat the airless roasting chamber in the torrefaction process. Residual energy is used in other site heating systems before reheat by the ecoPHASER system.

ecoPhaser System

ecoTECH's Power Station includes an "ecoPHASER", which is a Sublimation Reactor and Sonic Standing Wave Pulsed Burner fuelled by such feedstocks as: coal, lignite, leonardite, peat, chipped tyres, straw, wood waste, forestry slash, croppings, coke, bark, sawdust, paper, natural gas, landfill gas, bagasse, presorted garbage, manure, dried sewage and municipal solid waste. Any and all of the aforementioned are viable and cost effective fuel feedstocks. The efficiency of the ecoPHASER allows traditional fuels such as coal or natural gas to be efficiently processed into electricity, producing emissions well below current regulatory requirements.

The ecoPHASER produces a near-zero NOx exhaust, comprising mainly of Nitrogen and CO2. The inert exhaust gases are piped to the sealed, flow-through drying tunnel, where the ambient moisture (<35%) wood chips are anaerobically heat-dried to <10% moisture. The zero-oxygen environment is sustained throughout the entire process.

Whereas other processes rely on exothermic oxidation of the material to produce friable bio-char, our process creates fiber embrittlement from super dehydration and thermal breakdown without oxygen, so the lift of hydrocarbons associated with aerobic char production and thermal oxidation of energy components cannot occur. Therefore, latent energy remains in the wood as it is rendered friable.

Upon exiting the roast oven, the flue gas is returned to the ecoPHASER system's exhaust stack, whilst the biomass is ground to optimum granule size before mixing with the lignin binder extracted from wood by our separate Bio-Still� process, prior to briquetting. The fully roasted chips are ground to an optimum fuel granule size required by the client power stations and mixed with 1.5% by weight dried lignin. The mixture is conveyed to an array of briquettors where it is compressed into the finished product. Most briquettes are 120 mm square cushion style, but the dies can be changed to suit client requirements.

CHP Bio-Energy Power Stations:

A CHP Bio-Energy Power Station is described as a Waste-to-Energy (W2E), Combined Heat and Power energy generating facility. It produces both the heat and electricity in varying combinations, which can be tailored to produce desired amounts of either. The main structure houses a variable number of modules operating in a parallel array, each delivering 12MW's of electrical power and approximately 5MW's equivalent (15Mbtu) of process and sacrificial heat.

Each station consists of a traditional two-stage gassifier / burner which utilizes proven proprietary gasification technology and "off the shelf" boilers and turbines. The stations are built in 12MW modules (or "Pods") for simplicity in expansion and redundancy. This compact and scalable design provides flexibility for various sized projects.

For a typical 36MW Power Station: approximately 460 tons of biomass feedstock would be processed each day (during one eight hour shift) for 260 days per year, and would yield 130,000 tons fuel - enough electricity to provide 36 megawatts per hour, 24 hours per day, for 365 days per year (approximately 315 gigawatts per year). This is enough electricity to power 40,000 homes at average North American consumption rates.

Delivery of Heat from CHP Stations:

A 36MW Power Station produces raw heat energy in the magnitude of 165 GigaJoules (156 Mbtu) per hour, running 24 hours per day for 365 days per year. This equates to 17 MWe (17 megaWatts electricity equivalent) per ecoPHASER x 3, radiated into the boilers, superheaters, reheaters and economizers - thus converting energy into steam which turns the multiple stages of turbo-fans that comprise the steam turbines, which produces mechanical energy to revolve generators to electro-magnetically generate electricity, resulting in heat and mechanical losses that are circa 15 Mbtu (roughly 16 GigaJoules) of energy, most of which is available as high heat energy for use or transportation to a consumer.

 


The heat is transported via a piped Thermax� oil medium, that does not boil until over 700oF (371oC), hence no pressure of expansion as in steam systems; so no leakage, corrosion or burst potential. The insulated transmission pipes are small bore <55mm (2.2"), pumped at high speed around the circuit, usually 5 feet 
(1.5m) below ground and very safe. Heat is pumped to take-off points (heat exchangers/radiators) that may be housed in boilers for steam or hot water heaters.

Torrefied Bio-Fuels Manufacturing and Distribution Division

The Torrefied Bio-Fuels division will manufacture and distribute "green-fuel" via torrefied briquette plants powered by surplus heat and energy provided by the CHP Power Stations. Green-fuel is a wood-based "clean fuel" product that has been torrefied and pelletized, resulting in a highly-condensed wood fuel product which has roughly equal calorific value as standard coal and can be burned in the exact same manner but with greatly reduced carbon dioxide (CO2) emissions. Biomass in general provides a low cost, low risk route to lower CO2 emissions. When high volumes are needed, torrified biomass is price competitive with coal while meeting or exceeding emissions standards and may also provide a revenue stream through carbon credit gains.

ecoTECH anticipates that North American markets will further emerge as legislation and emission standards follow demand from governments and constituents seeking low carbon dioxide coal replacement products. Based on current pricing models and additional preliminary diligence discussions with a European utility company, we anticipate pricing FOB London at $250/ton US. At startup, ecoTECH expects to produce torrified biomass at a cost of $125/ton for delivery to European markets. Customers for "green-fuel" biofuels make up two potential groups: Direct end-users including current coal-fuelled power companies, and commodities brokers.

Torrefied Briquettes, As industries transition from coal-fired energy to more earth-friendly methods, "green-fuel" production provides a solution for coal-fired energy manufacturers to meet mandated percentages of sustainable fuels contents by established regulatory deadlines. Currently, most coal-fired power generators around the world do not have a readily available "green" fuel, and the cost of converting / retrofitting existing combustion systems is often not practicable. Most of the coal-fired power generators pulverize coal in ball mills and spray the ground fuel into the combustion zones. When wood in briquette or pellet form is ground in a ball mill, it forms stubbornly stringy mats and fibers that clog the system, making it an unfeasible solution for long-term use. However, when wood is roasted ("torrefied"), it becomes brittle at a certain temperature and takes on the attributes of coal, with the exceptions that it provides greater heat energy by weight, is sustainably renewable, and meets the mandated criteria. ecoTECH intends to use surplus heat generated by the Power Stations to provide this torrefaction process to woody biomass, which is then formed into briquettes to be sold at respectable margins on long-term fuel supply contracts with coal-fired power stations. This allies our efforts with the existing coal power giants, where helping them gives access to transmission facilities that would not be afforded a competitor.

Our torrefication process offers advantages for parties requiring low carbon dioxide replacement products, including

� No modifications to firing systems needed; No capital outlay required to burn the fuel:

� No handling or storage modifications needed; can be stored in the coal piles.

� Will not deteriorate in inclement weather. Hydrophobic; hygroscopy actually less than coal.

� Even with old burners, it will produce lower NOx and zero SOx to lower emissions.

� Higher energy content; emissions reduction exceed percentage of briquettes added.

� Carbon Credits: each ton of ecoTECH briquettes that are consumed reduces the CO2 output by 2.5tons. Depending on the buyer and the prevailing cap & trade spot at the time, this amounts to a rebate of at least $75 per ton of briquettes used.

Torrefaction Technology:

Torrefaction is a scientifically proven method for improving the properties of biomass as a fuel. Torrefaction is the thermo-chemical treatment of biomass at 200 to 300�C, carried out under atmospheric conditions and in the absence of oxygen. During the process the biomass partly decomposes, giving off various types of volatiles. The final product is the remaining solid, which is often referred to as torrefied biomass, or torrefied wood when produced from woody biomass.

 


Typically, 70% of the mass is retained as a solid product, containing approximately 90% of the initial energy content. The remaining 30% of the mass is converted into torrefaction gases, but contains only approximately 10% of the energy content of the biomass. Hence a considerable energy densification can be achieved, typically by a factor of 1.3 on mass basis. This example points out one of the fundamental advantages of the process, which is the high transition . . .



Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On May 22, 2009, Sea 2 Sky dismissed Schumacher & Associates, Inc. the independent accountants previously engaged as the principal accountants to audit its financial statements. The decision to change accountants was approved by our Board of Directors.

Also effective on May 22, 2009, we engaged dbbmckennon, Certified Public Accountants, as our independent certified public accountants. The decision to change accountants was approved by Sea 2 Sky's Board of Directors.

Schumacher & Associates, Inc. audited our financial statements for our fiscal years ended August 31, 2008 and 2007. The audit report of Schumacher & Associates, Inc. on our financial statements for the fiscal years stated above (the "Audit Period") did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, other than reflecting an uncertainty as to the Company's ability to continue as a going concern. During the Audit Period, and through May 22, 2009, there were no disagreements with Schumacher & Associates, Inc. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountants, would have caused it to make reference to the subject matter of the disagreements in connection with its report, and there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K.

We provided a copy of this disclosure to Schumacher & Associates, Inc. and requested that the former accountants furnish us with a letter addressed to the Securities and Exchange Commission stating whether they agree with the statements made by the Registrant, and, if not, stating the respects in which they do not agree. A copy of such letter was attached as Exhibit 16.1 to our Current Report on Form 8-K disclosing our change of accountants. . 
During the two most recent fiscal years, or any subsequent interim period prior to engaging dbb mckennon, we nor anyone acting on our behalf consulted with dbb mckennon regarding (i) the application of accounting principles to a specific completed or contemplated transaction, or (ii) the type of audit opinion that might be rendered on the company's financial statements where either written or oral advice was provided that was an important factor considered by the company in reaching a decision as to the accounting, auditing, or financial reporting issue, or (iii) any matter that was the subject of a disagreement with the company's former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the former accountant, would have caused it to make reference to the subject matter of the disagreements in connection with its audit report.

Item 15. Financial Statements and Exhibits

See Item 9.01 and the exhibit index below and the corresponding exhibits, which are incorporated herein by reference.

 


Item 3.02 Unregistered Sales of Equity Securities.

Reference is made to the disclosure set forth under the heading "Recent Sales of Unregistered Securities-Sales of Unregistered Securities by Sea 2 Sky" in Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

Item 5.01 Changes in Control of Registrant.

As a result of the Acquisition, the Company experienced a change in control, with the former stockholders of ecoTECH acquiring control of the Company. Reference is made to the disclosures set forth under the heading "Acquisition" in Item 1.01 and the disclosures set forth in Item 2.01 of this Current Report on Form 8-K, which disclosures are incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On the effective date of the Acquisition, in connection therewith, C. Victor Hall, Terry Ferguson, John Matthews and Anne Sanders were appointed to the Company's Board of Directors to fill vacancies thereunder.

Additionally, on the effective date of the Acquisition, the Board of Directors appointed (i) C. Victor Hall as the Company's Chief Executive Officer; (ii) Terence Ferguson as Executive Vice President, Business Development; (iii) John Matthews as Executive Vice President, Engineering and (iv) Anne Sanders as Vice President, Administration. Erik Odeen resigned his position as Chief Executive Officer concurrent with the effective date of the Acquisition.

Reference is made to the disclosures under the headings "Directors and Executive Officers," "Executive Compensation" and "Certain Relationships and Related Transactions" in Item 2.01 of this Current Report on Form 8-K, which disclosures are incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

As a result of the Acquisition described in Items 1.01 and 2.01 of this Current Report on Form 8-K, on the Closing Date, we adopted the fiscal year end of ecoTECH, thereby changing our fiscal year end from August 31 to December 31.

Item 9.01 Financial Statements and Exhibits.