Attached files
file | filename |
---|---|
EX-31.2 - CONNEXUS CORP | exhbit312.htm |
EX-32.1 - CONNEXUS CORP | exhibit321.htm |
EX-32.2 - CONNEXUS CORP | exhibit322.htm |
EX-31.1 - CONNEXUS CORP | exhibit311.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended December 31, 2009
OR
[ ] TRANSITION
REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from __________ to ______________
Commission
File Number 333-119566
DYNAMIC
ALERT LIMITED
(Exact
name of registrant as specified in its charter)
Nevada
|
98-0430746
|
|
State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization
|
Identification
No.)
|
11622
El Camino Real, Suite 204, San Diego, California 92160
(Address
of principal executive offices) (Zip Code)
Registrant’s telephone number,
including area code: (888) 675-0888
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes
X No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of "large accelerated filer", "accelerated
filer" and "smaller reporting company" in Rule 12b-2 of the Exchange
Act.
Larger
accelerated
filer Accelerated
filer
Non-accelerated
filer Smaller
reporting company X
Indicate
by check mark whether registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
Yes No X
Number of
shares outstanding of the registrant’s class of common stock as of January 31,
2010: 80,000,000
PART
I – FINANCIAL INFORMATION
Item
1. Consolidated Financial
Statements (Unaudited) Page
Consolidated
Balance Sheets
|
F-2
|
Interim
Consolidated Statements of Operations
|
F-3
|
Interim
Consolidated Statements of Cash Flows
|
F-4
to F-5
|
Interim
Consolidated Statement of Stockholders’ (Deficit)
|
F-6
|
Notes
to Interim Consolidated Financial Statements
|
F-7
to F-9
|
Item
2. Management’s Discussion and
Analysis 11
Item
3. Quantitative and Qualitative Disclosure about Market
Risk 12
Item
4. Controls and
Procedures 13
Item 4(A)
T. Controls and
Procedures 13
PART
II – OTHER INFORMATION
Item
1. Legal Proceedings - Not
Applicable 13
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds -
Not
Applicable 13
Item
3. Defaults upon Senior Securities – Not
Applicable 13
Item
4. Submission of Matters to a Vote of Security Holders – Not
Applicable 14
Item 5. Other
Information 14
Item6. Exhibits
16
SIGNATURES
17
PART
I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL
STATEMENTS
DYNAMIC
ALERT LIMITED
INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2009
(Unaudited)
Page
|
|
Consolidated
Financial Statements:
|
|
Consolidated
Balance Sheets
|
F-2
|
Interim
Consolidated Statements of Operations
|
F-3
to F-4
|
Interim
Consolidated Statements of Cash Flows
|
F-5
|
Interim
Consolidated Statement of Stockholders’ (Deficit)
|
F-6
|
Notes
to Interim Consolidated Financial Statements
|
F-7
to F9
|
F-1
DYNAMIC
ALERT LIMITED
CONSOLIDATED BALANCE
SHEETS
December
31,
2009
(Unaudited)
|
June
30,
2009
(See
Note 1)
|
|||
ASSETS
|
||||
Current
|
||||
Cash
|
$
|
-
|
$
|
170
|
Prepaid
expenses
|
233
|
679
|
||
Total
Current Assets
|
233
|
849
|
||
Computer
Equipment
|
-
|
823
|
||
Notes
Receivable – (Note 4)
|
481,758
|
-
|
||
TOTAL
ASSETS
|
$
|
481,991
|
$
|
1,672
|
LIABILITIES
AND STOCKHOLDERS’ (DEFICIT)
|
||||
LIABILITIES
|
||||
Current
|
||||
Accounts
payable
|
$
|
27,928
|
$
|
5,803
|
Accrued
liabilities
|
14,500
|
9,000
|
||
Advances
payable (Note 5)
|
495,185
|
-
|
||
Accounts
payable, related parties (Note 6)
|
7,500
|
-
|
||
Total
Current Liabilities
|
545,113
|
14,803
|
||
TOTAL
LIABILITIES
|
545,113
|
14,803
|
||
STOCKHOLDERS’
(DEFICIT)
|
||||
Capital
Stock
|
||||
Authorized:
|
||||
250,000,000
common shares, par value $0.001 per share
10,000,000
preferred shares, par value $0.001 per share
|
||||
Issued
and outstanding:
|
||||
80,000,000
common shares
|
80,000
|
80,000
|
||
Additional
paid-in capital
|
66,435
|
45,585
|
||
Accumulated
comprehensive income
|
6,153
|
6,153
|
||
Accumulated
(Deficit)
|
(215,710)
|
(144,869)
|
||
Total
Stockholders’ (Deficit)
|
(63,122)
|
(13,131)
|
||
TOTAL
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
|
$
|
481,991
|
$
|
1,672
|
The
accompanying notes are an integral part of these consolidated
statements.
F-2
DYNAMIC
ALERT LIMITED
INTERIM CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three-month
Period
ending
December
31, 2009
|
Three-month
Period
ending
December
31, 2008
|
|||
Revenue
|
$
|
-
|
$
|
-
|
-
|
-
|
|||
Expenses
|
||||
Depreciation
and amortization
|
-
|
388
|
||
Marketing
and travel
|
1,775
|
-
|
||
Office
and administration
|
4,667
|
339
|
||
Professional
Fees
|
40,786
|
3,245
|
||
Training
and consulting
|
22,500
|
3,072
|
||
69,728
|
7,044
|
|||
Net
(Loss) from Operations
|
(69,728)
|
(7,044)
|
||
Other
Income and Expenses
|
||||
Gain
on sale of assets
|
-
|
-
|
||
-
|
-
|
|||
Net
(Loss) For The Period
|
$
|
(69,728)
|
$
|
(7,044)
|
Basic
And Diluted Loss Per Share
|
$
|
Nil
|
$
|
Nil
|
Weighted
Average Number of Shares Outstanding
|
80,000,000
|
80,000,000
|
||
The
accompanying notes are an integral part of these consolidated
statements.
F-3
DYNAMIC
ALERT LIMITED
INTERIM CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Six-month
Period
ending
December
31, 2009
|
Six-month
Period
ending
December
31, 2008
|
|||
Revenue
|
$
|
3,840
|
$
|
-
|
3,840
|
-
|
|||
Expenses
|
||||
Depreciation
and amortization
|
-
|
775
|
||
Marketing
and travel
|
1,775
|
-
|
||
Office
and administration
|
5,179
|
4,406
|
||
Professional
Fees
|
45,604
|
12,382
|
||
Consulting
|
22,500
|
3,072
|
||
75,058
|
20,635
|
|||
Net
(Loss) from Operations
|
(71,218)
|
(20,635)
|
||
Other
Income and Expenses
|
||||
Gain
on sale of assets
|
377
|
-
|
||
377
|
-
|
|||
Net
(Loss) For The Period
|
$
|
(70,841)
|
$
|
(20,635)
|
Basic
And Diluted Loss Per Share
|
$
|
Nil
|
$
|
Nil
|
Weighted
Average Number of Shares Outstanding
|
80,000,000
|
80,000,000
|
||
The
accompanying notes are an integral part of these consolidated
statements.
F-4
DYNAMIC
ALERT LIMITED
INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six-month
period ending
December
31, 2009
|
Six-month
period
ending
December
31, 2008
|
|||
Cash
Flows from Operating Activities
|
||||
Net
(loss) for the period
|
$
|
(70,841)
|
$
|
(20,635)
|
Adjustments
to Reconcile Net Profit (Loss) to Net Cash Provided by (Used in) Operating
Activities
|
||||
Gain
on sale of assets
|
(377)
|
-
|
||
Prepaid
expenses
|
446
|
(438)
|
||
Depreciation
and amortization
|
-
|
775
|
||
Accounts
payable and accrued liabilities
|
35,125
|
(5,112)
|
||
Net
Cash (Used in) Operating Activities
|
(35,647)
|
(25,410)
|
||
Cash
Flows from Investing Activities
|
||||
Note
receivables
|
(481,758)
|
-
|
||
Disposal
of capital assets
|
1,200
|
-
|
||
Net
Cash Provided by Investing Activities
|
(480,558)
|
-
|
||
Cash
Flows From Financing Activities
|
||||
Increase
in additional paid-in capital
|
20,850
|
-
|
||
Increase
in advances payable
|
495,185
|
-
|
||
Foreign
currency translation adjustment
|
-
|
(77)
|
||
Net
Cash Provided by (Used in) Financing Activities
|
516,035
|
(77)
|
||
(Decrease)
in Cash during the Period
|
(170)
|
(25,487)
|
||
Cash,
Beginning Of Period
|
170
|
26,903
|
||
Cash,
End Of Period
|
$
|
-
|
$
|
1,416
|
Supplemental
Disclosure Of Cash Flow Information
|
||||
Cash
paid for:
|
||||
Interest
|
$
|
-
|
$
|
-
|
Income
taxes
|
$
|
-
|
$
|
-
|
The
accompanying notes are an integral part of these consolidated
statements.
F-5
DYNAMIC
ALERT LIMITED
CONSOLIDATED STATEMENT OF
STOCKHOLDERS’ (DEFICIT)
For
the Period from July 1, 2008 to December 31, 2009
CAPITAL
STOCK
|
ACCUMULATED
|
||||||||||||||
ADDITIONAL
|
COMPRE-
|
||||||||||||||
PREFERRED
|
COMMON
|
PAID-IN
|
ACCUMULATED
|
HENSIVE
|
|||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
CAPITAL
|
(DEFICIT)
|
INCOME
(LOSS)
|
TOTAL
|
||||||||
Balance,
July 1, 2008
|
-
|
$
|
-
|
80,000,000
|
$
|
80,000
|
$
|
45,000
|
$
|
(109,181)
|
$
|
6,235
|
$
|
22,054
|
|
Foreign
currency translation adjustment
|
-
|
-
|
-
|
-
|
-
|
-
|
(82)
|
|
(82)
|
||||||
Increase
in additional paid-in capital
|
-
|
-
|
-
|
585
|
-
|
-
|
|
585
|
|||||||
Net
loss for the year
|
-
|
-
|
-
|
-
|
-
|
(35,688)
|
-
|
|
(35,688)
|
||||||
Balance
June 30, 2009
|
-
|
-
|
80,000,000
|
80,000
|
45,585
|
(144,869)
|
6,153
|
|
(13,131)
|
||||||
Increase
in additional paid-in capital
|
-
|
-
|
-
|
20,850
|
-
|
|
20,850
|
||||||||
Net
(loss) for the period
|
-
|
-
|
-
|
-
|
-
|
(70,841)
|
-
|
|
(70,841)
|
||||||
Balance,
December
31, 2009
|
-
|
$
|
-
|
80,000,000
|
$
|
80,000
|
$
|
66,435
|
$
|
(215,710)
|
$
|
6,153
|
$
|
|
(63,122)
|
The
accompanying notes are an integral part of these consolidated
statements.
F-6
DYNAMIC
ALERT LIMITED
NOTES
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2009
(Unaudited)
Note
1 Basis
of Presentation
While the
information presented in the accompanying interim consolidated financial
statements is unaudited, it includes all adjustments which are, in the opinion
of management, necessary to present fairly the financial position, results of
operations and cash flows in the interim periods presented. Except as
disclosed below, these interim consolidated financial statements follow the same
accounting policies and methods of their application as Dynamic Alert Limited’s
audited June 30, 2009 annual financial statements. It is suggested
that these interim consolidated financial statements be read in conjunction with
Dynamic Alert Limited’s June 30, 2009 audited financial statements.
The
information as of June 30, 2009 is taken from the audited financial statements
of this date.
Note
2 Basis
of Presentation – Going Concern
The
accompanying consolidated financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of America,
which contemplates our continuation as a going concern. However, the
Company has negative working capital and a stockholders’ deficit and has losses
to date of approximately $216,000. These matters raise substantial
doubt about our ability to continue as a going concern. In view of
these matters, realization of certain of the assets in the accompanying
consolidated balance sheet is dependent upon the Company’s ability to meet its
financing requirements, raise additional capital, and the success of its future
operations. The Company is seeking additional means of financing to fund its
business plan. There is no assurance that the Company will be
successful in raising sufficient funds to assure the eventual profitability of
the Company. Management believes that actions planned and presently
being taken to revise the Company’s operating and financial requirements provide
the opportunity for the Company to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from these uncertainties.
Note
3 Income
Taxes
We are
subject to U.S. federal income taxes. We have had losses to date, and
therefore, have paid no income tax.
Deferred
income taxes arise from temporary timing differences in the recognition of
income and expenses for financial reporting and tax purposes. Our
deferred tax assets consist entirely of the benefit from net operating loss
(“NOL”) carry forwards. Our deferred tax assets are offset by a
valuation allowance due to the uncertainty of the realization of the NOL carry
forwards. The net operating loss carry forward, if not used, will
expire in various years through 2009. NOL carry forwards may be
further limited by a change in company ownership and other provisions of the tax
laws.
The
Company’s deferred tax assets, valuation allowance and change in valuation
allowance are as follows:
Period
Ending
|
Estimated
NOL Carry forward
|
NOL
Expires
|
Estimated
Tax Benefit from NOL
|
Valuation
Allowance
|
Change
in Valuation Allowance
|
Net
Tax Benefit
|
||||
June
30, 2009
|
144,869
|
Various
|
36,217
|
(36,217)
|
(8,922)
|
—
|
||||
December
31, 2009
|
215,710
|
Various
|
53,927
|
(53,927)
|
(17,710)
|
-
|
Income
taxes at the statutory rate are reconciled to our actual income taxes as
follows:
Income
tax benefit at statutory rate resulting from NOL carry
forwards
|
(25%)
|
|
Deferred
income tax valuation allowance
|
25%
|
|
Actual
tax rate
|
0%
|
F-7
Note
4 Notes
Receivable
The
Company carries its notes receivable at cost or loan balance, subject to the
valuation procedures as described below. The book value of these
financial instruments is representative of their fair values. These notes are
for funds advanced to Rusheen Handels AG, a Swiss corporation ("Rusheen"), whom
the Company is in negotiations with a doing a due diligence to acquire Rusheen’s
99% interest in its Brazilian subsidiary Amazônia Capital e Participações Ltda.
(“ACP”)
As of
December 31, 2009, the company had a total of $481,758 invested in notes
receivable. The note is uncollateralized. Effective
January 2, 2010, the notes receivable will bear interest at 12 % with no set
maturity date. Interest will be accrued at 12% per annum, calculated
monthly and compounded on the notes receivable as earned. No imputed interest
was recorded as of December 31, 2009 because the amount was considered
immaterial.
The
Company will maintain a valuation for certain loans that are delinquent, have
significant collateral deficiencies or have other attributes that reduce their
collectability potential. The valuation account is netted against
notes receivable. At December 31, 2009, management determined that no
allowance was necessary.
Note
5 Advances
Payable
As of
December 31, 2009, the company had a total of $495,185 in advances payable that
were uncollateralized. Subsequent to December 31, 2009 $477,000 of
the advances payable were collateralized with convertible promissory notes,
bearing interest at 12% per annum, and due in full July 2011. No imputed
interest was recorded as of December 31, 2009 because the amount was considered
immaterial.
The face
amount of convertible promissory notes and all interest accrued thereon may be
converted, in whole or in part, any time following the Issuance Date in Holder’s
sole discretion. Upon receipt the Company shall instruct the transfer agent to
deliver stock certificates representing the number of shares of Common Stock
issuable upon such conversion, as applicable. The holder of
convertible promissory notes, is entitled to convert the face amount of such
notes at anytime following the Issuance Date at the lesser of either $1.00 per
share or the average weighted trading price for the 20-day period prior to the
Conversion Date.
Note
6 Accounts
payable, related parties
As of
December 31, 2009, the company had a total of $7,500 in accounts payable to its
officers for consulting fees.
Note
7 Subsidiary
On
December 22, 2009, Brazil Gold Corp was formed and is a wholly owned subsidiary
of Dynamic Alert Limited. As of December 31, 2009, Brazil Gold Corp
was dormant. All inter-company balances have been
offset.
Note
8 Subsequent
Events
On
November 13, 2009, the Company entered into a Letter of Intent with Rusheen
Handels AG, a Swiss corporation ("Rusheen") for the acquisition by the Company
of Rusheen's 99% ownership interest in its Brazilian subsidiary Amazônia Capital
e Participações Ltda. (“ACP”) in exchange for (a) 44 million restricted shares
of the Company's common stock and a 2.5% net smelter return royalty on mineral
production from ACP mineral claims located in Brazil. ACP, the owner of numerous
poly-metallic mineral claims covering approximately 824,411 hectares (2,037,119
acres) in three states in the prolific Tapajos Greenstone Belt in the Amazon
Basin of Brazil. The primary mineral target is gold, but copper, nickel, iron
ore, manganese and tin are also found in the area. The legal claims are located
in three western states: Amazonas, Mato Grosso and Rondonia.
F-8
The
consideration payable to Rusheen for transfer of the ACP ownership stake is 44
million restricted shares in the common stock of the Company, and a 2.5% NSR on
mineral production from the ACP claims. The Acquisition is subject to entering
into a definitive acquisition agreement and to certain conditions of closing
such as due diligence and the approval of each of Rusheen's and the Company's
board of directors.
If the
business combination is completed this will result in a change of control of the
Company/
On
January 7, 2010, the Board of Directors of Dynamic Alert Limited adopted a 2010
Stock Option Plan, which plan authorizes the issuance of up to ten percent (10%)
of the Company’s total issued and outstanding shares of common stock to the
Company’s officers, directors, employees, advisors and consultants.
On
January 7, 2010, the Company’s Board of Directors also granted to officers and
directors under the above plan options to purchase a total of 2.75 million
shares at an exercise price per share of $0.56
The
Company has evaluated all subsequent events through February 16, 2010, the date
the financial statements were available to be issued.
F-9
DYNAMIC
ALERT LIMITED
NOTES
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2009
(Unaudited)
ITEM
2. MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We
incorporated as Dynamic Alert Limited (referred to herein as “we”, “us”, “our”
and similar terms) on June 17, 2004, in the State of Nevada. Our
principal executive offices have moved and are now located at 11622 El Camino Real, Suite 204, San
Diego, California 92160. Our telephone number is (888) 675-0888, Our fiscal
year end is June 30.
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
Over the
last two (2) years, we have continued to build a business that assists consumers
with their security needs. Our goal has been to help our customers
create and implement a personalized security plan. We offer a
three-fold service. Our first focus was to assist our clients in developing
personalized security plans. Our second focus is to source and market
personal security products. Our third focus is to provide personal
protection on an as-needed basis. We are actively seeking to add new
products and/or services that we can offer. A new marketing strategy
will be developed as new products and services are identified. For the immediate
quarter, we are continuing with our initial core business in marketing security
products.
However,
we believe that we need to enlarge our business activity. Therefore,
we will continue to review opportunities with the objective of bringing
additional revenue to the Company.
It is for
this reason that on November 13, 2009, the Company entered into a Letter of
Intent with Rusheen Handels AG, a Swiss corporation ("Rusheen") for the
acquisition by the Company of Rusheen's 99% ownership interest in its Brazilian
subsidiary Amazônia Capital e Participações Ltda. (“ACP”) in exchange for (a) 44
million restricted shares of the Company's common stock and a 2.5% net smelter
return royalty on mineral production from ACP mineral claims located in Brazil.
ACP the owner of numerous poly-metallic mineral claims covering approximately
824,411 hectares (2,037,119 acres) in three states in the prolific Tapajos
Greenstone Belt in the Amazon Basin of Brazil. The primary mineral target is
gold, but copper, nickel, iron ore, manganese and tin are also found in the
area. The legal claims are located in three western states: Amazonas, Mato
Grosso and Rondonia.
The
consideration payable to Rusheen for transfer of the ACP ownership stake is 44
million restricted shares in the common stock of the Company, and a 2.5% NSR on
mineral production from the ACP claims. The Acquisition is subject to entering
into a definitive acquisition agreement and to certain conditions of closing
such as due diligence and the approval of each of Rusheen's and the Company's
board of directors.
The
agreement to acquire Rusheen's ownership interest in ACP is contingent on the
parties entering into a written definitive acquisition agreement, approval by
both parties' board of directors and upon the completion of a due diligence
investigation by each party.
Material
Changes in Financial Condition
At
December 31, 2009, we had a working capital deficit of ($544,880), compared to a
working capital deficit of ($13,954), at June 30, 2009. At December
31, 2009, our total assets consisted of notes receivable of $481,758 and prepaid
expenses of $233. This compares with total assets at June 30, 2009
consisting of cash of $170, prepaid expenses of $679 and capital assets of $823.
These material changes have arisen as a result of the Company having
raised funds in the form of uncollateralized loans, which subsequent to December
31, 2009 $477,000 of the advances payable were collateralized with convertible
promissory notes, bearing interest at 12% per annum, and due in full July
2011. Refer to note 4 above.
These
funds advanced to Rusheen, a Swiss corporation, whom the Company is in
negotiations with and doing a due diligence to acquire Rusheen’s 99% interest in
its Brazilian subsidiary Amazônia Capital e Participações Ltda. (“ACP”), so that
ACP has working capital to fund its property taxes and on-going expenses to
ensure it retains such mineral rights. Refer to note 4
above.
11
At
December 31, 2009, our total current liabilities increased to $545,113 from
$14,803 at June 30, 2009. During the 6 months ended December 31,
2009, accounts payable, accrued liabilities, and advances payable increased by
$530,310.
We
recognized $3,840 in revenues from operations during the six months ending
December 31, 2009. Our short and long-term survival is dependent on
funding from sales of securities as necessary or from shareholder
loans.
As we do
not have an existing cash balance, we do not have sufficient funds to carry out
normal operations over the next three (3) months. Our short and
long-term survival is dependent on funding from sales of securities as necessary
or from shareholder loans, and thus, to the extent that we require additional
funds to support our operations or the expansion of our business, we may attempt
to sell additional equity shares or issue debt. Any sale of
additional equity securities will result in dilution to our
stockholders. Recent events in worldwide capital markets may make it
more difficult for us to raise additional equity or capital. There
can be no assurance that additional financing, if required, will be available to
us or on acceptable terms.
The
recent and continuing downturn in the U.S. economy has had an effect on our
ability to generate revenues and to attract long-term financing for our
operations. The products that we offer could be viewed by many consumers as
discretionary purchases and as such do not fit within consumers current budget
restrictions, which have become much tighter due to the loss of jobs, job
insecurity, the increase of foreclosures on residential homes and overall
decreased economic activity. The downturn in the U.S. economy has also made it
more difficult to find investors that either have capital to invest or are
willing to put capital at risk by investing in our company. We anticipate that
both effects of the current economic rescission will continue to hinder our
abilities to become a profitable company and to grow our
operations.
Material
Changes in Results of Operations
For
The Three Months Ended December 31, 2009, Compared To The Three Months Ended
December 31, 2008.
There
were no revenues from the sale of security products and services during the
three months ending December 31, 2009, which is consistent with nil revenues
during the three months ended December 31, 2008.
For the
three months ended December 31, 2009, operating expenses were $69,728 compared
to $7,044 during the three months ended December 31, 2008. The
increase was principally due to a increase in our professional and
consulting fees for due diligence work being carried out on the ACP
operations in Brazil.
Operating
expenses during the three months ended December 31, 2009, consisted of
professional fees of $40,786, (2008: $3,245) consulting fees of
$22,500 (2008: $3,072) office and administration expenses of $4,667, (2008:
$339) and travel expenses $1,775.
During
the three month period ended December 31, 2009, we recognized a net loss from
operations of $69,728 compared to a net loss from operations of $7,044 for the
three-month period ended December 31, 2008. The increased loss of
$62,684 was due to an increase in our activities over the prior period as
discussed above.
For
The Six Months Ended December 31, 2009, Compared To The Six Months Ended
December 31, 2008.
There was
$3,840 revenue from the sale of security products and services during the six
months ending December 31, 2009, compared to nil revenues during the six months
ended December 31, 2008.
For the
six months ended December 31, 2009, operating expenses were $75,058 compared to
$20,635 during the six months ended December 31, 2008. The increase
was principally due to a increase in our professional and consulting
fees for due diligence work being carried out on the ACP operations
in Brazil.
Operating
expenses during the six months ended December 31, 2009, consisted of
professional fees of $45,604, (2008: $12,382) consulting fees of
$22,500 (2008: $3,072) office and administration expenses of $5,179, (2008:
$4,406) and travel expenses $1,775.
12
During
the six month period ended December 31, 2009, we recognized a net loss from
operations of $71,218 compared to a net loss from operations of $20,635 for the
six month period ended December 31, 2008. The increase loss of
$50,583 was due to an increase in our activities over the prior period as
discussed above.
Off-Balance
Sheet Arrangements
We
currently do not have any off-balance sheet arrangements.
ITEM
3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
As a
"smaller reporting company" as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.
ITEM
4. CONTROLS AND PROCEDURES
As of the
end of the period covered by this report, we conducted an evaluation, under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, of our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the 1934 Act). Based on this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in reports that we file or submit
under the 1934 Act is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms.
ITEM
4T. CONTROLS AND PROCEDURES
Management's
Quarterly Report on Internal Control over Financial Reporting.
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.
Management's
assessment of the effectiveness of the small business issuer's internal control
over financial reporting is as of the quarter ended December 31,
2009. We believe that our internal control over financial reporting
was not effective due to material weaknesses in the system of internal
control. Specifically, management identified the following control
deficiency:
·
|
The
Company uses accounting software that does not prevent erroneous or
unauthorized changes to previous reporting periods and does not provide an
adequate audit trail of entries made in the accounting
software.
|
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
This
quarterly report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this annual report.
There was
no change in our internal control over financial reporting that occurred during
the fiscal quarter ended December 31, 2009, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.
13
PART
II – OTHER INFORMATION
ITEM
1. LEGAL
PROCEEDINGS
None.
ITEM
2. UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM
3. DEFAULTS
UPON SENIOR SECURITIES
None.
ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM
5. OTHER
INFORMATION
On
November 13, 2009, the Company's Board of Directors elected Dr. Thomas E. Sawyer
as a member of the Company's Board of Directors (the "Board"). Dr.
Sawyer was also appointed as the Company's Chief Executive Officer, Secretary
and Treasurer.
Following
the election of Dr. Sawyer to the Board, the Company received the written
resignation of Mr. David Robinson as a member of the Board and as an officer of
the Company.
Dr.
Sawyer, 76, has been Senior Scientific advisor to three US
Presidents. He has been an innovator and entrepreneur in telecom
hardware. Since 2007, he has been the Chairman of the Board and CEO
of Innova Enterprises, Inc., of Sandy, Utah, a company that develops oil
purification technology to reduce waste oil and extend useful life of engines
and engine components. From 2002 through 2005, he was President and
Chief Executive Officer of TeleCom, Inc. From 1998 through 2002, Dr.
Sawyer served as Director and Chief Technology Officer of Global Light
Telecommunications, Inc. He has also been the President and Chief
Executive Officer of Sawyer Technologies, LLC, since 2002, which provides
consulting services for international high net worth entities and individuals,
projects in the fields of mining, gas and oil, telecommunications, green energy
and clean technologies and health care.
Dr.
Sawyer obtained a B.Sc. (Engineering) from UCLA, a M.A. (Business and Urban
Affairs) from Occidental College, a Ph.D. (Clinical Psychology) from Florida
State and a Ph.D. (Management) from Walden University. He performed
Graduate Research (Public Affairs) at Coro Foundation and has completed other
graduate studies at the University of Utah, the University of Southern
California and California Institute of Technology.
On
December 4, 2009, Dynamic Alert Ltd. (the "Company") received the resignation of
Mr. Donald Cameron from its Board of Directors and also as the Company's
Secretary and Treasurer, effective immediately.
On
December 8, 2009, the Company's Board of Directors appointed Mr. J. Roland
Vetter, CA as the Company's Chief Financial Officer.
Mr.
Vetter, 58, is a senior executive with a significant background in mergers and
acquisitions and in growing start-up companies, particularly in the mining,
manufacturing and technology sectors. He has considerable experience
in the mining sector in both North & South America (Mexico &
Brazil).
14
Since
2008, Mr. Vetter has been a non-executive director and the Chair of the audit
committee of Golden Phoenix Mining Inc, a publicly-traded Nevada-based mining
exploration company. From 2005 to 2008, he was named President &
CFO of International Gold Resources, Inc. a US-listed company, after structuring
the successful reverse take-over of a private US mining group with exploration
interests in Brazil and the Yukon. From 1998 to 2003, he was the
President, CFO and director of Cardinal Minerals Inc., a US mining group seeking
to acquire a producing silver/copper mine in Mexico, and the Chief Financial
Officer of Globetech Ventures Corp, a TSX-listed company with mining exploration
operations in Amapa state in Brazil. Prior to 1998, Mr. Vetter was
Financial Services Director for the Zimco Group, part of the New Mining Business
Division of Anglo American Corporation and a former Chairman of the Anglo
American Audit Liaison Committee. The Zimco Group comprised twelve distinct
operations involved in mining and manufacturing. During his Zimco tenure, he
served on the board of directors of Darmag Ltd., and was Strategic Advisor to
the Zaaiplaats Tin Mine Ltd., both Zimco Group publicly-listed
companies.
Mr.
Vetter was born and educated in Johannesburg, South Africa, and attended the
University of the Witwatersrand in South Africa, where he obtained his Bachelor
of Commerce and Bachelor of Accounting degrees. He is a Member of
both the Canadian and South African Institute of Chartered
Accountants.
On
December 21, 2009, Board of Directors of Dynamic Alert Limited (the
"Company") appointed Mr. Phillip Jennings Vice President Business
Development and elected him as a Member of the Company's Board of
Directors.
Mr.
Jennings, 68, is an investment banker with significant experience in
financing and merger and acquisition activities over the past thirty
years. He has created and financed companies in the resource
and technology sectors in Asia and South America, as well as the
U.S. Throughout his career, Mr. Jennings has been a leader in
applying new technology to existing businesses to increase efficiency and
profitability.
In
1992, Mr. Jennings was CEO and founder of Teleres, a joint venture with
Dow Jones & Co. and AEGON USA that created the first national online
real estate system. In 1997, he created a similar company in
China (Soufun.com) which has grown to be the largest in the world in that
industry. He has significant experience and connections in the
South American resource business where, since 2001, he has been involved
in using tertiary recovery technology methodology in oil and gas
exploration in Colombia. His time in South America led him to
become the founder of two ventures using leading-edge technology to
identify and map landmines and to distribute water-purifying devices to
local communities in Colombia that have been negatively affected by war
and the accompanying explosive remnants of such conflict. To
enhance those efforts, he recently co-founded Molecular Resonance
Corporation (MRC) to research and develop an electromagnetic spectroscopy
system for the airborne detection of Improvised Explosive Devices using
sensors developed by Lawrence Livermore National Laboratory combined with
MRC proprietary technology. Mr. Jennings is also the founder of
Brazil Gold Corporation, a US-based privately-held mineral exploration
company active in South America. He currently sits on the board
of directors of quant fund managers First Forge Capital LLC, and is a
member of the board of directors and the CEO of Avalon Holding Group Inc.,
an SEC-listed company.
Mr.
Jennings was born and educated in the United States, graduating from
Oklahoma State University with a degree in Business
Administration. He attended the University of Mexico for
graduate studies. He is a former U.S. Marine
Captain.
|
F-
15
DYNAMIC
ALERT LIMITED
NOTES
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2009
(Unaudited)
ITEM
6. EXHIBITS
Pursuant
to Rule 601 of Regulation S-B, the following exhibits are included herein or
incorporated by reference.
Exhibit
Number Description
3.1 Articles
of Incorporation*
3.2 By-laws*
31.1 CERTIFICATION
OF CEO PURSUANT TO 18 U.S.C. ss. 1350, SECTION 302
31.2 CERTIFICATION
OF CFO PURSUANT TO 18 U.S.C. ss. 1350, SECTION 302
32.1 CERTIFICATION
PURSUANT TO 18 U.S.C. ss. 1350, SECTION 906
32.2 CERTIFICATION
PURSUANT TO 18 U.S.C. ss. 1350, SECTION 906
* Incorporated by
reference to our SB-2 Registration Statement, file number 333-119566, filed on October 30,
2006.
16
DYNAMIC
ALERT LIMITED
NOTES
TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2009
(Unaudited)
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 16th day
of February, 2010.
DYNAMIC
ALERT LIMITED
Date:
February 16,
2010 By:
/s/
Dr.
Thomas E. Sawyer
Name: Dr.
Thomas E. Sawyer
Title:
Chairman of the Board/Chief Executive Officer, principal executive officer and
Secretary
Date:
February 16,
2010 By:
/s/
J Roland Vetter
Name: J
Roland Vetter
Title:
Chief Financial Officer/Principal Financial Officer, principal accounting
officer
17