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EX-31.1 - EXHIBIT 31.1 - Seals Entertainment Corpglobalsmartexhibit311.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
FORM 10-Q
 
(Mark One)
 

 
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 
SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011
 
[ ] 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: 333-152376
 
GLOBAL SMART ENERGY, INC.
 
 (Exact name of registrant as specified in its charter)
 
 DELAWARE       26-2691611
 (State or other jurisdiction of         (I.R.S. Employer
 incorporation or organization)     Identification No.)
     
 230 North Park Blvd Suite 104        76051
 Grapevine, TX    (Zip Code)
 (Address of principal executive offices)       
     
     
     
 

 

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (817) 416-2533
 (Former name, former address and former fiscal year, if changed since last report)
Formerly TRIANGLE ALTERNATIVE NETWORK INCORPORATED
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (Check one):
 
Large accelerated filer [ ] Accelerated filer [ ]
 
Non-accelerated filer [ ] Smaller reporting company [X]
 
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [  ]
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
 
PRECEDING FIVE YEARS:
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
 
APPLICABLE ONLY TO CORPORATE ISSUERS:
 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.  As of May 15, 2011, there were 5,184,410 shares of common stock, par value $0.005, issued and outstanding.
 

 

 
 

 
 
 
 GLOBAL SMART ENERGY, INC.
 TABLE OF CONTENTS
       
 PART I      
   Item 1  Financial Statements  3
       
   Item 2  Management's Discussion and Analysis of Financial Condition and Results of Operations  8
       
   Item 3  Quantitative and Qualitative Dislosures About Market Risk  9
       
   Item 4T  Controls and Procedures  9
       
 Part II    Other Information  
       
   Item 1  Legal Proceedings  10
       
   Item 2  Unregistered Sales of Equity Securities and Use of Proceeds  10
       
   Item 3  Defaults Upon Senior Securities  10
       
   Item 4  Submission of Matters to a Vote of Security Holders  10
       
   Item 5  Other Information  10
       
   Item 6  Exhibits  10
       
 
 

 

 
 
 

 
PART I - FINANCIAL INFORMATION
 
 
This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the "Exchange Act"). These statements are based on management's beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements also include statements in which words such as "expect," "anticipate," "intend," "plan," "believe," "estimate," "consider" or similar expressions are used.
 
Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.
 
 
2

 
ITEM 1 FINANCIAL STATEMENTS
 

 
GLOBAL SMART ENERGY, INC.
 
(A Development Stage Company)
 
Balance Sheets
 
                   
ASSETS
 
                   
       
March 31,
 
December 31,
 
       
2011
 
2010
 
         
(unaudited)
   
(audited)
 
CURRENT ASSETS
           
Cash and cash equivalents
  $ 319     $ 255  
Prepaid expenses
            3,000  
                       
Total current assets
    319       3,255  
                       
TOTAL ASSETS
  $ 319     $ 3,255  
                       
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
                       
CURRENT LIABILITIES
               
 
 
                   
Accounts payable and accrued expenses
  $ 25,136     $ 20,409  
Related party payable
    1,650       75,427  
                       
Total current liabilities
    26,786       95,836  
                       
                       
TOTAL LIABILITIES
    26,786       95,836  
                       
STOCKHOLDERS' DEFICIT
               
Common stock; 50,000,000 shares authorized
               
   at par value of $0.005, 5,184,410
               
and 3,208,250   shares issued and outstanding, respectively
    25,922       16,041  
Additional paid-in capital
    142,255       63,209  
Accumulated deficit from development stage
    (194,644 )     (171,831 )
                       
Total Stockholders' Deficit
    (26,467 )     (92,581 )
                       
TOTAL LIABILITIES AND STOCKHOLDERS'
               
 DEFICIT
  $ 319     $ 3,255  
                       
The accompanying notes are an integral part of these financial statements.
 
 




 
3

 





 
GLOBAL SMART ENERGY, INC.  
(A Development Stage Company)  
Statements of Operations
 
(Unaudited)
 
                   
                   
                   
               
From Inception
 
               
(May 23,
 
   
For the Three
   
For the Three
   
2007) through
 
   
Months Ended
   
Months Ended
   
March 31,
 
   
3/31/11
   
3/31/10
   
2011
 
                   
REVENUES
  $ -     $ -     $ -  
                         
OPERATING EXPENSES
                       
                         
General and administrative
    22,813       6,585       113,726  
                         
Total Operating Expenses
    22,813       6,585       113,726  
                         
LOSS FROM OPERATIONS
    (22,813 )     (6,585 )     (113,726 )
                         
Income taxes
    -       -       -  
                         
LOSS FROM CONTINUING OPERATIONS
    (22,813 )     (6,585 )     (113,726 )
                         
DISCONTINUED OPERATIONS
            -       (80,918 )
                         
NET LOSS
  $ (22,813 )   $ (6,585 )   $ (194,644 )
                         
BASIC LOSS PER COMMON SHARE
                       
CONTINUING OPERATIONS
  $ (0.00 )   $ (0.00 )        
DISCONTINUED OPERATIONS
  $ -     $ 0.00          
                         
WEIGHTED AVERAGE NUMBER OF
                       
COMMON SHARES OUTSTANDING
    3,545,653       3,208,250          
                         
                         
                         
                         
                         
                         
                         
                         
                         
The accompanying notes are an integral part of these financial statements.
 
 



 
4

 
GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
 
Statement of Stockholders' Deficit
 
From Inception (May 23, 2007) to March 31, 2011
 
                               
                     
Deficit
       
                     
Accumulated
       
               
Additional
   
During the
   
Total
 
   
Common Stock
   
Paid-In
   
Development
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Deficit
 
                               
Balance, May 23, 2007
    -     $ -     $ -     $ -     $ -  
                                         
Common stock issued for services
                                       
   at $0.075 per share
    5,000,000       25,000       50,000       -       75,000  
                                         
Net loss for the year ended
                                       
  December 31, 2007
    -       -       -       (85,762 )     (85,762 )
                                         
Balance, December 31, 2007 (audited)
    5,000,000       25,000       50,000       (85,762 )     (10,762 )
                                         
Common stock cancelled
    (2,216,750 )     (11,084 )     11,084       -       -  
                                         
Common stock issued for services
                                       
  at $0.01 per share
    200,000       1,000       1,000       -       2,000  
                                         
Net loss for the year ended
                                       
  December 31, 2008
    -       -       -       (29,370 )     (29,370 )
                                         
Balance, December 31, 2008 (audited)
    2,983,250       14,916       62,084       (115,132 )     (38,132 )
                                         
Common stock issued for services
                                       
  at $0.01 per share
    225,000       1,125       1,125       -       2,250  
                                         
Net loss for the twelve months
                                       
  ended December 31, 2009
    -       -       -       (37,487 )     (37,487 )
                                         
Balance, December 31, 2009 (audited)
    3,208,250     $ 16,041     $ 63,209     $ (152,619 )   $ (73,369 )
 
Net loss for the twelve months
  Ended December 31, 2010
 
    -       -       -       (19,212 )     (19,212 )
Balance, December 31, 2010 (audited)
    3,208,250     $ 16,041     $ 63,209     $ (171,831 )   $ (92,581 )
 
Common Stock issued for Services
At $0.045 per share
    300,000       1,500       12,000       -       13,500  
                                         
Common Stock issued for settlement of related
party payables at $0.045 per share
    1,676,160       8,381       67,046       -       75,427  
 
Net Loss for three months  ended
March 31, 2011
    -       -       -       (22,813 )     (22,813 )
 Balance, March 31, 2011(unaudited)            5,184,410         $  25,922      $  142,255      $  (194,644 )   $  (26,467 )
                                                                                                                            

 
 
 
The accompanying notes are an integral part of these financial statements.
 

 
5

 

GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
 
 
                From inception  
                (May 23,  
    For the Three     For the Three     2007) through  
    Months Ended     Months Ended     March 31,  
    March 31, 2011     March 31, 2010     2011  
                   
 OPERATING ACTIVITIES                  
                       
     Net Loss   $ (22,813 )   $ (6,585  )   $ (194,644  )
     Adjustments to reconcile net loss to net                        
     Cash used by operating activities:                        
                         
        Common stock issued for services     13,500               92,750  
                         
     Changes in operating assets and liabilities:                        
        Changes in accounts payable     4,727       (721 )     25,136  
           Change in Current Assets     3,000       -       -  
                         
           Net cash used by operating Assets     (1,586 )     (7,306 )     (76,758 )
                         
 INVESTING ACTIVITIES                        
                         
     Discontinued operations     -       -       (54,553 )
                         
        Net cash used in investing activities     -       -       (54,553 )
                         
 FINANCING ACTIVITIES                        
                         
     Discontinued operations     -       -       6,304  
     Proceeds from related party loans     1,650       8,000       77,077  
                         
        Net cash provided by financing activities     1,650       8,000       83,381  
                         
     NET INCREASE (DECREASE) IN CASH     64       694       (47,930 )
        DISCONTINUED OPERATIONS                     48,249  
     CASH AT BEGINNING OF PERIOD     255       118       -  
                         
     CASH AT END OF PERIOD   $ 319     $ 812     $ 319  
                         
 SUPPLEMENTAL DISCLOSURES OF                              
     CASH FLOW INFORMATION                        
     CASH PAID FOR:                        
                         
     Interest   $       $       $ 625  
                         
     Income Taxes   $       $       $    
                         
        SUPPLEMENTAL DISCLOSURE OF NON                        
        CASH FLOW INFORMATION                        
                         
          Shares issued for settement of related party loans   $ 75,427             $ 75,427  
                         
           Shares Issued for Services   $ 13,500             $ 13,500  
                         
The accompanying notes are an integral part of these financial statements  
 
 
 

 
6

 
GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
Notes to Unaudited Financial Statements

 
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
 
The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2011 and for all periods presented have been made.
 
Certain information and footnote disclosures normally included in financial statements prepared, have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the most recent filing of the Form 10-K which included the financial statements and notes thereto as of December 31, 2010. The operating results for the three month period ended March 31, 2011 is not necessarily indicative of the operating results that may be expected for the fiscal year ending December 31, 2011.
 
NOTE 2 - GOING CONCERN
 
The Company’s financial statements are prepared in conformity with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has had no revenues and has generated losses from operations. The Company has accumulated a deficit of ($194,644) and working capital deficiency of ($26,467) as of March 31, 2011.
 
In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and to develop a consistent source of revenue.  Management’s plans include investing in and developing all types of businesses related to the energy industry.
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations.
 
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
 
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
 
Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles 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.
 
Cash and cash equivalents
 
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
 
Loss per common share
 
Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.
 
Development -Stage Company
 
The accompanying financial statements have been prepared in accordance with the FASB ASC Topic 915 "Accounting and Reporting by Development-Stage Enterprises". A development-stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenue there from. Development-stage companies report cumulative costs from the enterprise's inception.
 
 
Recent Accounting Pronouncements

The Company evaluated all of the other recent accounting pronouncements and deemed that they did not have a material impact on our financial statements.
 
NOTE 4 – RELATED PARTY TRANSACTIONS
 
As of December 31, 2010 a major shareholder of the Company advanced $75,427 which was converted to common stock at $0.045 per share for 1,676,160 shares in March of 2011.  As of March 31, 2011 a company, of which the CEO is also an officer, advanced $1,650 for the administration and other costs of operations on an unsecured basis; bearing no interest and due on demand.

 The Company approved the issue of 1,676,160 shares at $0.045 per share for the cancellation of the unsecured advances owed by the Corporation to its majority shareholder in the amount of $75,427.15.effective March 17, 2011.
 
NOTE 5 - STOCKHOLDER’S DEFICIT
 
On March 8, 2011 the Board of the Directors authorized the issue of its common shares to the officers and directors that have been serving without compensation in the following amounts:
 
 Lyle J. Mortensen   CEO and director    200,000 shares
 Gerry Shirren  CFO and director     75,000 shares
 Tiffany Kalahiki  past secretary and director    25,000 shares
 
Compensation in the amount of $13,500 was recorded on the books of the company, or $0.045 per share.

The Company also approved the issue of 1,676,160 shares at $0.045 per share for the cancellation of the unsecured advances owed by the Corporation to its majority shareholder in the amount of $75,427.15.effective March 17, 2011.

For the three months ended March 31, 2011, apart from those stated above, there are no other issuances of common stock of the Company.
 
7

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
 
Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
 
OVERVIEW
 

Global Smart Energy, Inc. (formerly Triangle Alternative Network Incorporated) (“GSEI”) is a development stage company that was incorporated in the state of Delaware on April 1, 2008 and was the holding company for Triangle Alternative Network, LLC (“TAN, LLC” and, together with GSEI., "GSEI", the "Company", "we", "us" or "our").  We are a start-up company that was originally organized to develop a television network to provide programming to the Gay, Lesbian, Bi-Sexual and Trans-gender (“GLBT”) Community.
 
After attempting to develop programming, it was determined that the company did not want to develop this particular programming and had not entered into a definitive contract to sell the programming.   The film and production costs have been transferred to related parties in exchange for the debt owed to them for advances to the Company.
 
The Company is actively seeking a merger candidate and/or strategic alliances with energy related companies in order to secure operations and revenues to sustain the Company and provide value to its shareholders.

OUR CORPORATE INFORMATION
 
GSEI was incorporated in the State of Delaware on April 1, 2008 under the name of Triangle Alternative Network, Inc. The Company officially changed its name to Global Smart Energy, Inc. on February 8, 2011. GSE has no full time employees. Our principal executive offices are located at 230 North Park Blvd Suite 104., Grapevine, TX 75061 and our telephone number is (817) 416-2533.
 
THREE MONTHS ENDED MARCH 31, 2011 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2010
 
REVENUES, EXPENSES AND LOSS FROM OPERATIONS
 
Our revenues, selling, general and administrative expenses and net loss for the three months ended March 31, 2011 and March 31, 2010 are as follows:
 
    Three Months     Three Months  
    Ended March     Ended March  
      31, 2011       31,2010  
                 
 Revenue      $ -     $ -  
Selling, general and administrative         22,813       6,585  
                 
Net Loss       $ (22,813 )      $ (6,585
                 
                 
 
Revenues for the three months ended March 31, 2011 were $0, compared to $0 for the three months ended March 31, 2010.
 
For the three months ended March 31, 2011, operating expenses totaled $22,813 as compared to $6,585 for the three months ended March 31, 2010. The increase was primarily due to the issuance of common stock to prior and current officers and directors of the Company for compensation.
 
Liquidity and Capital Resources
 
Cash Requirements
 
At March 31, 2011, we had cash on hand of $319 compared to $255 at December 31, 2010. The cash on hand is not sufficient for the next twelve months. We anticipate that our cash requirements will increase substantially as a result of the fact that we are now a public, reporting company and are beginning to develop our business plan. We anticipate that we will require approximately $24,000 to meet our minimal operating requirements for the next twelve months. We have not established our revenues and have not established any other source for the required operating funds.
 
Sources and Uses of Cash
 
Operations
 
For the three months ended March 31, 2011, we used cash in our operation of $1,586 compared to $7,306 for the three months ended March 31, 2010. These changes were primarily the result of the loss from operations of $22,813 made of payments to officers and directors, professional and accounting fees paid to maintain corporate requirements, a decrease in prepaid assets of $3,000 and an increase in accounts payable of $4,727 for the three months ended March 31, 2011; compared to a loss of $6,585 with a decrease in accounts payable of $721 for the three months ended March 31, 2010.
 
Financing
 
We had net cash flows of $1,650 from financing activities for the three months ended March 31, 2011 compared to $ 8,000 for the three months ended March 31, 2010. The cash came from related party advances.
 
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CRITICAL ACCOUNTING POLICIES
 
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified the following accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management's most difficult, subjective judgments.
 
Our critical accounting policies, including the assumptions and judgements underlying them, are disclosed in our Calendar Year 2010 Form 10-K in Note 1- Summary of Significant Accounting Policies included in our Financial Statements.  There were no significant changes to our critical accounting policies during the three months ended March 31, 2011. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the result of which form the basis for making judgements about the carrying value of assets and liabilities that are not readily apparent from other sources.  Results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions.
 
Off-balance-Sheet Arrangements
 
We have no off-balance-sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.
 
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
As a smaller reporting company we are not required to provide the information required by this Item.
 
ITEM 4T CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company's management, the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the three months ended March 31, 2011. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2011, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.
 
In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.
 
A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB)) or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following two material weaknesses which have caused management to conclude that, as of March 31, 2011, our disclosure controls and procedures were not effective at the reasonable assurance level:
 
1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
 
2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
 
To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.
 
Remediation of Material Weaknesses
 
To remediate the material weaknesses in our disclosure controls and procedures identified above, we have continued to refine our internal procedures to begin to implement segregation of duties and to reduce the number of audit adjustments.
 
Changes in Internal Control over Financial Reporting. Except as noted above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
CHANGES IN INTERNAL CONTROLS
 
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three-month period ended March 31, 2011. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the three months ended  March 31, 2011 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.
 
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PART II - OTHER INFORMATION
 
ITEM 1 LEGAL PROCEEDINGS
 
The Company is not involved in any legal proceedings.
 
ITEM 1A RISK FACTORS
 
There have been no changes to our risk factors as described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2011.
 
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
The Company approved the issue of 1,676,160 shares at $0.045 per share for the cancellation of the unsecured advances owed by the Corporation to its majority shareholder in the amount of $75,427.15.effective March 17, 2011.
 
 ITEM 3 DEFAULTS UPON SENIOR SECURITIES
 
There have been no events that are required to be reported under this Item.
 
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

In the Annual Meeting of the Company, on January 10, 2011, the following items were submitted to the security holders for a vote, which all were approved by a majority of the shares entitled to vote:
1.  
Lyle J. Mortensen, Gerry Shirren and Tiffany Kalahiki were elected as directors of the Company.
2.  
The name of the Company was changed to Global Smart Energy, Inc., and;
3.  
The Bylaws of the Company were amended to permit stockholders and directors to approve corporate actions through executing majority written consents in lieu of holding meetings.
 
ITEM 5 OTHER INFORMATION
 

Securities Authorized for Issuance Under Equity Compensation Plans
 
On March 8, 2011 the Board of the Directors authorized the issue of its common shares to the officers and directors that have been serving without compensation in the following amounts:
 
 Lyle J. Mortensen  CEO and director    200,000 shares
 Gerry Shirren  CFO and director    75,000 shares
 Tiffany Kalahiki  past secretary and director     25,000 shares
 
ITEM 6 EXHIBITS
 
31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
 
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
 
32.1 Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
32.2 Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 




SIGNATURES
 
Pursuant to the requirements 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.
 
Global Smart Energy, Inc.
 
 Dated: May 15,2011    /s/ Lyle J Mortensen  
 By:  Lyle J Mortensen  
   Chief Executive Officer  
 

 


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