Attached files
| file | filename |
|---|---|
| EX-31.1 - Global Security Agency Inc. | ex31-1.htm |
| EX-32.1 - Global Security Agency Inc. | ex32-1.htm |
| EX-31.2 - Global Security Agency Inc. | ex31-2.htm |
| EX-32.2 - Global Security Agency Inc. | ex32-2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2011
Or
r TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 000-53184
Global Security Agency, Inc.
(Exact Name of Small Business Issuer as specified in its charter)
|
Nevada
|
98-0516432
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. employer identification no.)
|
1218 Hwy # 105 West, Suite 2-G
Conroe, TX 77304
(Address of principal executive offices) (Zip Code)
(818) 281 – 1618
Registrant's telephone number, including area code
Indicate by check mark whether the Issuer:
Has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports): Yes þ No o
Has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No þ
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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o Accelerated Filer o
Non-Accelerated Filer o Smaller Reporting Company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
66,221,645 shares of the registrant's Common Stock, 0.00001 per share, were outstanding as of May 6, 2011
Table of Contents
|
PART I FINANCIAL INFORMATION
|
Page
|
|
|
Item 1.
|
2
|
|
|
2
|
||
|
3
|
||
|
Statements of Changes in Stockholders’ Equity as of March 31, 2011 (Unaudited)
|
||
|
4
|
||
|
5
|
||
|
Item 2.
|
6
|
|
|
Item 3.
|
8
|
|
|
Item 4.
|
9
|
|
|
PART II OTHER INFORMATION
|
||
|
Item 1.
|
10
|
|
|
Item 2.
|
10
|
|
|
Item 3.
|
10
|
|
|
Item 4.
|
10
|
|
|
Item 5.
|
10
|
|
|
Item 6.
|
10
|
|
|
11
|
||
ITEM 1. FINANCIAL STATEMENTS
Global Security Agency Inc.
Balance Sheets (unaudited)
|
31-Mar-11
|
31-Dec-10
|
|||||||
|
|
$ | $ | ||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
16,074 | 2,485 | ||||||
|
Accounts receivable
|
651,716 | 687,058 | ||||||
|
Other receivables
|
16,250 | 17,750 | ||||||
|
Prepaid expenses and deposits
|
75,850 | 425 | ||||||
|
Total Current Assets
|
759,890 | 707,718 | ||||||
|
Property and equipment, net
|
31,742 | 34,554 | ||||||
|
Other assets
|
2,373 | 4,576 | ||||||
|
Total Assets
|
794,005 | 746,848 | ||||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
123,364 | 78,099 | ||||||
|
Accounts payable - related parties
|
24,978 | 22,679 | ||||||
|
Accrued liabilities
|
70,814 | 46,405 | ||||||
|
Due to related party
|
– | 70,000 | ||||||
|
Deferred revenue
|
– | 31,348 | ||||||
|
Total Current Liabilities
|
219,156 | 248,531 | ||||||
|
Stockholders’ Equity
|
||||||||
|
Preferred Stock, 100,000,000 shares authorized, $0.00001 par value, none issued
|
– | – | ||||||
|
Common stock, 100,000,000 shares authorized, $0.00001 par value
61,721,645 shares (December 31, 20010 – 61,721,645 shares) issued and outstanding |
617 | 617 | ||||||
|
Additional paid-in capital
|
650,807 | 650,807 | ||||||
|
Accumulated deficit
|
(76,575 | ) | (153,107 | ) | ||||
|
Total Stockholders’ Equity
|
574,849 | 498,317 | ||||||
|
Total Liabilities and Stockholders’ Equity
|
794,005 | 746,848 | ||||||
(The accompanying notes are an integral part of these unaudited financial statements)
Global Security Agency Inc.
Statements of Operations (unaudited)
|
|
For the Three
Months Ended
31-Mar-11
|
For the Three
Months Ended
31-Mar-10
|
||||||
|
|
$ | $ | ||||||
|
Revenue
|
||||||||
|
Personal protection services
|
114,649 | – | ||||||
|
Private investigation services
|
416,848 | – | ||||||
|
Total Revenue
|
531,497 | – | ||||||
|
Cost of Goods Sold
|
161,585 | |||||||
|
Gross Profit
|
369,912 | – | ||||||
|
General and administrative
|
290,108 | 35,667 | ||||||
|
Net Income (Loss) from Operations
|
79,804 | 35,667 | ||||||
|
Other Expenses
|
||||||||
|
Foreign current exchange loss
|
– | (130 | ) | |||||
|
Interest income
|
– | |||||||
|
Interest expense
|
(3,272 | ) | – | |||||
|
Net Income (Loss)
|
76,532 | (35,797 | ) | |||||
|
Net Income (Loss) Per Common Share – Basic and Diluted
|
0.00 | (0.01 | ) | |||||
|
Weighted Average Number of Common Shares Outstanding
|
||||||||
|
Basic
|
61,721,645 | 5,800,600 | ||||||
|
Diluted
|
61,808,667 | 5,800,600 | ||||||
(The accompanying notes are an integral part of these unaudited financial statements)
Global Security Agency Inc.
Statements of Cash Flows (unaudited)
|
For the Three
Months Ended
31-Mar-11
|
For the Three
Months Ended
31-Mar-10
|
|||||||
|
|
$ | $ | ||||||
|
|
||||||||
|
Operating Activities
|
||||||||
|
Net Income (loss)
|
76,532 | (35,797 | ) | |||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||
|
Depreciation and amortization
|
4,590 | – | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable and other receivables
|
36,842 | (1,535 | ) | |||||
|
Prepaid expenses and deposits
|
(75,000 | ) | – | |||||
|
Accounts payable
|
45,265 | 30,908 | ||||||
|
Accounts payable – related parties
|
2,299 | - | ||||||
|
Accrued liabilities
|
24,409 | – | ||||||
|
Deferred revenue
|
(31,348 | ) | – | |||||
|
Net Cash Provided by ((Used in) Operating Activities
|
83,589 | (6,424 | ) | |||||
|
Financing Activities
|
||||||||
|
Proceeds from loan payable - related party
|
– | 205 | ||||||
|
Advances from notes payable - related parties
|
(70,000 | ) | – | |||||
|
Proceeds from the sale of common stock
|
– | 6,000 | ||||||
|
Stock subscriptions received
|
2,600 | |||||||
|
Net Cash (Used in) Provided by Financing Activities
|
(70,000 | ) | 8,805 | |||||
|
Increase (Decrease) In Cash
|
13,589 | 2,381 | ||||||
|
Cash - Beginning of Period
|
2,485 | 247 | ||||||
|
Cash - End of Period
|
16,074 | 2,628 | ||||||
|
Supplemental Disclosures:
|
||||||||
|
Interest paid
|
3,272 | – | ||||||
|
Income tax paid
|
- | – | ||||||
(The accompanying notes are an integral part of these unaudited financial statements)
Global Security Agency, Inc.
Notes to the Financial Statements
1. Basis of Presentation
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company’s audited 2010 annual financial statements and notes thereto. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in the Company’s 2010 annual financial statements have been omitted.
2. Going Concern
These financial statements have been prepared on a going concern basis, which implies the Company will not continue to meet its obligations in the normal course of business for the next fiscal year. As of March 31, 2011, the Company has just begun to generate revenue and has accumulated losses since inception. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
3. Related Party Transactions
|
(a)
|
As of March 31, 2011, the Company owed the former President of the Company $0.00 (December 31, 2010 - $70,000) which was unsecured, non-interest bearing, and due on demand.
|
|
(b)
|
As of March 31, 2011, the Company owed three officers a total of $24,978 for certain trade payables paid by them on behalf of the Company.
|
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
As used in this quarterly report: (i) the terms "we", "us", "our", and the “Company" mean Global Security Agency Inc., and (ii) all dollar amounts in this annual report refer to U.S. dollars unless otherwise indicated.
Cautionary Statement Regarding Forward-Looking Information
The statements in this report that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements appear in a number of different places in this report and can be identified by words such as “estimates”, “projects”, “expects”, “intends”, “believes”, “plans”, or their negatives or other comparable words. Also look for discussions of strategy that involve risks and uncertainties. Forward-looking statements include, among others, statements regarding our markets and the demand for our services
You are cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties. Our actual results may differ materially from those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our estimates. Some of these risks and assumptions include those set forth in reports and other documents we have filed with or furnished to the United States Securities and Exchange Commission (“SEC”). We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Unless required by law, we do not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations. However, you should carefully review the reports and other documents we file from time to time with the SEC.
General
We were an exploration stage corporation engaged in the search for mineral deposits. Our focus was on the exploration for mineralization on our Spanish Gold property, which we concluded in fiscal 2008, based on work to date, was not sufficiently prospective of mineralization to warrant further work.
In January 2010, we determined to pursue a new line of business focused on the security solutions and risk management services industry. In that regard, during the first quarter of 2010, we initiated a reorganization of our Company by (i) entering into an agreement with our sole director and officer at the time, Shawn Englmann, pursuant to which we issued options to acquire 450,000 shares of our common stock to Mr. Englmann and he agreed to resign as the director and officer of our company, (ii) we issued shares of our common stock to our current Secretary and director, Rock Rutherford, that resulted in a change of control of our company and (iii) we completed our name change. In April 2010, new directors and officers were appointed and Mr. Englmann resigned his positions with the Company. We subsequently entered into agreements to provide security solution and risk management services to certain companies.
In May 2010, we affected a reverse split of our common stock on a 1 for 10 basis, reducing the number of outstanding shares of our common stock to 6,600,645 shares. Subsequently, in June 2010, we issued 39,000,000 shares of common stock at a price of $0.0001 per share, thereby increasing the number of outstanding shares of our common stock to 45,600,645 shares.
In August 2010, Thomas Johnson voluntarily resigned as a director and the President of our company and we appointed Ronald Relf as a director and the President of our company in place of Mr. Johnson. In addition, in August 2010, we converted $195,000 in debt owed by us to four lenders into shares of our common stock at a price of $0.01 per share and issued 19,500,000 shares to the lenders.
Our Current Business
We are security solutions and risk management services company. The risks involved in operating domestically and internationally have increased significantly for companies and other organizations over the years. Risk mitigation has become an increasingly important concern for these companies and other organizations, particularly in high-threat environments, for the protection of personnel, property and other valuable assets. In addition, security concerns have increased for wealthy individuals in countries across the globe. Security threats can arise in a variety of forms and we assist companies and other organizations and wealthy individuals with addressing any potential threats to them.
We offer a wide range of security and risk management services for individuals, corporations and other entities. Our services include risk assessments, training, crisis management, protection, support and intelligence.
We operate our business through a network of consultants. Our consultants are experts in the field of crisis management with significant government, military, foreign services and private industry experience, and are located around the world. Our consultants are experienced in all aspects of the services we provide.
See our Current Report on Form 8-K filed with the SEC on February 9, 2011 for more information.
Results of Operations
Three Months Ended March 31, 2011, Compared to Three Months Ended March 31, 2010
Revenues
We generated revenues of $531,497 in the three months ended March 31, 2011, compared to $0 in the three months ended March 31, 2011, from personal protection and private investigation services under our new line of business.
Expenses
For the three months ended March 31, 2011, we incurred total operating expenses of $451,693, comprised primarily of selling, general and administrative expenses related to our new line of business. In the three months ended March 31, 2010, we incurred total operating expenses of $35,667, comprised primarily of selling, general and administrative expenses, during a period in which we had no operations.
Net Income (Loss)
For the three months ended March 31, 2011, our net income was $76,532, compared to a net loss of $35,797 for the three months ended March 31, 2010.
Liquidity and Capital Resources
As of March 31, 2011, we had cash of $16,074, total assets of $794,005, total liabilities of $219,156, working capital of $540,734, and an accumulated deficit of $76,575.
For the three months ended March 31, 2011, operating activities provided cash of $83,589, primarily related to the increase in net income, compared to a use of $6,424 in cash during the period ended March 31, 2010.
During the three months ended March 31, 2011, financing activities used cash of $70,000 to repay a loan to a related party. During the three months ended March 31, 2010, we received $8,805 from the sale of common stock and stock subscriptions.
We are dependent on equity financing and proceeds from related parties to fund our operations. Over the next 12 months, we plan to pursue our current business of providing security solutions and risk management services to our clients, and expect that we will require additional funds of approximately $1.0 million to proceed with our business plan. However, this estimate may change significantly depending on the level of our business activities. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back plan based on our available financial resources. There can be no assurance that we will be successful in our current business.
We intend to raise our capital requirements for the next 12 months from our operations, private placements, loans from related parties or public offerings (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising sufficient funds through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any person to provide us with financing. There is no assurance that any financing will be available to us or if available, on terms that will be acceptable to us.
Although we plan to raise capital through equity or debt financing, we believe that the latter may not be a viable alternative for funding our operations as we do not have tangible assets to secure any such financing. We anticipate that any additional funding will be in the form of equity financing from the sale of our common stock. However, we currently do not have any financing arranged and we cannot provide any assurance that we will be able to raise sufficient funds from the sale of our common stock to finance our operations.
Going Concern
Our financial statements for the three months ended March 31, 2011 have been prepared on a going concern basis and Note 3 to the financial statements identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have only started generating revenues, have achieved losses since our inception, and rely upon the sale of our common stock and loans from related and other parties to fund our operations. We may not generate any material revenues, and if we are unable to raise equity or secure alternative financing, we may not be able to pursue our plans and our business may fail.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were are not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control
Other than as described above, during the three months ended March 31, 2011, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any material pending legal proceedings and are not aware of any legal proceedings that have been threatened against us. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or securityholder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
See our Current Reports on Form 8-K filed with the SEC on February 2, 2011.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(Removed and Reserved)
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
|
Number
|
Description
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Date: March 11, 2011
|
GLOBAL SECURITY AGENCY INC.
|
|
By: /s/ Larry E. Lunger
|
|
|
Larry E. Lunger
|
|
|
Chief Executive Officer
|