Seals Entertainment Corp - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - Seals Entertainment Corp	Financial_Report.xls
EX-32.1 - EXHIBIT 32.1 - Seals Entertainment Corp	v241023_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - Seals Entertainment Corp	v241023_ex31-1.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 SEPTEMBER 30, 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.)

3340 Peachtree Road, N.E.
Atlanta, GA		30326
(Address of principal executive offices)		(Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (404) 230-9600

230 North Park Blvd Suite 104

Grapevine, TX 76051

(Former name, former address and former fiscal year, if changed since last report)

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 o No o

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 November 17, 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 - FINANCIAL INFORMATION		3

ITEM 1 Financial Statements		4

ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations.		11

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk		13

ITEM 4 Controls and Procedures		13

PART II - OTHER INFORMATION		15

ITEM 1 Legal Proceedings		15

ITEM 1A Risk Factors		15

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds		15

ITEM 3 Defaults Upon Senior Securities		15

ITEM 4 Submission of Matters to a Vote of Security Holders		15

ITEM 5 Other Information		15

ITEM 6 Exhibits		15

Signatures		16

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.

ITEM 1 FINANCIAL STATEMENTS

GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
Balance Sheets

ASSETS

	Sept 30,				December
	2011				2010
		(unaudited)				(audited)
CURRENT ASSETS
Cash and cash equivalents		$	2,334			$	255
Prepaid Expenses			-				3,000

Total Current Assets			2,334				3,255

TOTAL ASSETS		$	2,334			$	3,255

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

Accounts payable and accrued expenses		$	22,046			$	20,409
Related party payable			4,450				75,427

Total Current Liabilities			26,496				95,836

LONG-TERM LIABILITIES

Convertible note payable			-				-

Total Long-Term Liabilities			-				-

TOTAL LIABILITIES			26,496				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			25,922				16,041
Additional paid-in capital			203,806				63,209
Accumulated deficit from development stage			(253,890	)			(171,831	)

Total Stockholders' Deficit			(24,162	)			(92,581	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	2,334			$	3,255

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

GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)


														From Inception
														on May 23,
	For the Three Months Ended							For the Nine Months Ended						2007 Through
	September 30,							September 30,						September 30,
	2011				2010			2011			2010			2011

REVENUES		$	-		$	-		$	-		$	-		$	-

OPERATING EXPENSES

General and administrative			42,345			2,802			78,492			15,083			169,406

Total Operating Expenses			42,345			2,802			78,492			15,083			169,406

LOSS FROM OPERATIONS			42,345			2,802			78,492			15,083			169,406

OTHER INCOME EXPENSES
Interest expense			(3,025	)		-			(3,566	)		-			(3,566	)

INCOME (LOSS) BEFORE TAXES			(45,370	)		(2,802	)		(82,058	)		(15,083	)		(172,972	)

Income taxes			-			-			-			-			-

LOSS FROM CONTINUING OPERATIONS			(45,370	)		(2,802	)		(82,058	)		(15,083	)		(172,972	)

DISCONTINUED OPERATIONS			-			-			-			-			(80,918	)

NET INCOME (LOSS)		$	(45,370	)	$	(2,802	)	$	(82,058	)	$	(15,083	)	$	(253,890	)

BASIC INCOME (LOSS) PER COMMON SHARE
CONTINUING OPERATIONS		$	-		$	-		$	-		$	-
DISCONTINUED OPERATIONS		$	-		$	-		$	-		$	-

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING			5,184,410			3,208,250			4,644,160			3,208,250

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

GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Deficit


									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		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		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 year ended December 31, 2009										(37,487	)		(37,487	)

Balance, December 31, 2009		3,208,250			16,041			63,209		(152,619	)		(73,369	)

Net loss for the year ended ended December 31, 2010										(19,212	)		(19,212	)

Balance, December 31, 2010		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

Transfer of debt to a Company owned by former officer		-			-			61,551		-			61,551

Net Loss for nine months ended September 30, 2011										(82,058	)		(82,058	)

Balance, June 30, 2011		5,184,410		$	25,922		$	203,806	$	(253,890	)	$	(24,162	)

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

GLOBAL SMART ENERGY, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
							From Inception
							on May 23,
	For the Nine Months Ended						2007 Through
	September 30,						September 30,
	2011			2010			2011

OPERATING ACTIVITIES
Net income (loss)	$	(82,058	)	$	(15,083	)	$	(253,889	)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Used by Operating Activities:
Discontinued operations		-
Common stock issued for services		13,500						92,750
Changes in operating assets and liabilities:
Accrued interest on promissory note		3,551			-			3,551
Change in Current Assets		3,000						-
Changes in accounts payable & accrued expenses		1,637			507			22,046

Net Cash Used in Operating Activities		(60,371	)		(14,576	)		(135,543	)

INVESTING ACTIVITIES
Discontinued operations		-			-			(54,553	)

Net Cash Used in Investing Activities		-			-			(54,553	)

FINANCING ACTIVITIES
Discontinued operations		-			-			6,304
Contributed Capital		75,427						75,427
Proceeds from convertible note payable		200,000						200,000
Repayment of loan		(142,000	)					(142,000	)
Related party loans		(70,977	)		16,500			4,450

Net Cash Provided by Financing Activities		62,450			16,500			144,181

NETINCREASE (DECREASE) IN CASH		2,079			1,924			(45,915	)
DISCONTINUED OPERATIONS								48,249
CASH AT BEGINNING OF PERIOD		255			118			-

CASH AT END OF PERIOD	$	2,334		$	2,042		$	2,334

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	-		$	-		$	625
Income Taxes	$	-		$	-		$	-

SUPPLEMENTAL DISCLOSURE OF NON
CASH FLOW INFORMATION

Transfer of debt to a Company owned by former officer	$	61,551			-		$	61,551
Shares issued for settlement of related party loans	$	75,427		$	-		$	75,427

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

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 September 30, 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 and nine month periods ended September 30, 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 ($253,889) and currently has net working capital deficit of $24,162 as of September 30, 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 an operating business.

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.

GLOBAL SMART ENERGY, INC.

(A Development Stage Company)

Notes to Financial Statements

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 therefrom. 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 September 30, 2011 a company, of which the prior CEO is also an officer, advanced $4,450 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 – CONVERTIBLE PROMISSORY NOTE

On June 14, 2011 the Company issued three-year Convertible Promissory Note ( the ”Note”) in the amount of $200,000 in a private transaction to an accredited investor for working capital to assist in the development of a business plan and acquire financing and/or assets in the energy related industry. The Note accumulates interest to maturity at six percent (6%) per annum. At the option of the Note holder, the principal and interest may be converted into common shares at a price of $0.10 per share. However, on September 30, 2011 a privately owned Nevada Corporation, of which the prior CEO and CFO are officers, agreed to assume the Note and all of the underlying obligations of the Note in exchange for the existing cash in the Company bank account at Bank of America and certain other obligations and prepaid expenses that had been incurred and/or paid for by the then existing management. An amount totaling $61,551 of the assumed Note has been treated as contributed capital.

GLOBAL SMART ENERGY, INC.

(A Development Stage Company)

Notes to Financial Statements

NOTE 6 – EMPLOYMENT AGREEMENTS

As of June 1, 2011 the Company entered into an employment agreement with Frank O’Donnell, to serve as President and Director, and Lyle Mortensen to serve as the Secretary/Treasurer and Director of the Company. Each agreement calls for monthly cash compensation of $5,000 per month and an accrual of 10,000 shares of common stock per month for the first full year of employment. The stock award is to be vested 100% upon completion of one year of service. In the event the Employee is terminated, for other than misconduct, the Stock Awards will become 100% vested. Upon the resignations of Frank O’Donnell and Lyle J. Mortensen, effective October 21, 2011, the employment agreements were cancelled and transferred to Global Smart Energy, Inc (NEVADA). The prior officers have agreed to no longer look to the Company for compensation and accrual of stock benefits under the Employment Agreements.

Note 7 – SUBSEQUENT EVENTS

On October 21, 2011 the Company issued a promissory note to Bridgeport Enterprises, Inc. (“Bridgeport”) in the amount of $30,000.00 in exchange for deposits totaling $30,000.00 into bank accounts. The proceeds are to be used for expenses paid to the prior officers and for expenses incurred with $20,000 to be retained by the Company for working Capital. The terms of the Bridgeport note is interest to accrue at 6% and is due on October 21, 2012. At the option of the payee, the note may be converted into Common Stock of the Company at $0.002 per share for a total of 15,000,000 shares of the Company.

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 were transferred to related parties in exchange for the debt owed to them for advances to the Company.

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 3340 Peachtree Road, N.E., Atlanta, GA and our telephone number is (404) 230-9600.

Effective October 2, 2011 in a special meeting of the Board of Directors, E. Lamar “Lou” Seals, III was elected as Chairman of the Board of Directors and CEO of the Company to be effective October 22, 2001. Frank O’Donnell, CEO and Director, Lyle Mortensen CFO and Director and Gerry Shirren, Director resigned for personal reasons and had no disagreements with the Company. Prior to resignation the Board of Directors elected E. Lamar Seals, III and John W. Bonner, Jr. as directors to replace them until further action by a majority of the shareholders.

Liquidity and Capital Resources

Cash Requirements

At September 30, 2011, we had cash on hand of $2,334.45 compared to $255 at December 31, 2010. Management feels that 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 a business plan. We anticipate that we will require approximately $2,500,000 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.

THREE MONTHS ENDED SEPTEMBER 30, 2011 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2010

REVENUES, EXPENSES AND LOSS FROM OPERATIONS

Our revenues, selling, general and administrative expenses and net loss for the three months ended September 30, 2011 and September 30, 2010 are as follows:

	Three Months Ended Sept. 30, 2011			Three Months Ended Sept. 30, 2010
Revenue	$	-		$	-
Selling, general and administrative		45,370			2,802
Net Loss	$	(45,370	)	$	(2,802	)

For the three months ended September 30, 2011, operating expenses totaled $45,370 as compared to $2,802 for the three months ended September 30, 2010. The increase was primarily due to payments of monthly compensation to current officers and directors of the Company, accrual of interest and increased professional fees for filing and other professional expenses.

NINE MONTHS ENDED SEPTEMBER 30, 2011 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2010

REVENUES, EXPENSES AND LOSS FROM OPERATIONS

Our revenues, selling, general and administrative expenses and net loss for the nine months ended September 30, 2011 and September 30, 2010 are as follows:

	Nine Months Ended Sept. 30, 2011			Nine Months Ended Sept. 30, 2010
Revenue	$	-		$	-
Selling, general and administrative		82,058			15,083
Net Loss	$	(82,058	)	$	(15,083	)

For the nine months ended September 30, 2011, operating expenses totaled $82,058 as compared to $15,083 for the nine months ended September 30, 2010. The increase was primarily due to payments of monthly compensation to current officers and directors of the Company, accrual of interest and increased professional fees for filing and other professional expenses.

Sources and Uses of Cash

Operations

For the nine months ended September 30, 2011, we used cash in our operation of $60,370 compared to $14,576 for the nine months ended September 30, 2010. These changes were primarily the result of the loss from operations of $82,058 made up of stock issued for 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 $1,637 for the nine months ended September 30, 2011; compared to a loss of $15,083 with an increase in accounts payable of $507 for the nine months ended September 30, 2010 and change noted for issuance of shares for services $ 13,500 for the nine months ended September 30, 2011.

Financing

We had net cash flows of $62,450 from financing activities for the nine months ended September 30, 2011 compared to $ 16,500 for the Nine months ended September 30, 2010. Cash in the amount of $62,450 came from related party advances.

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 judgments 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 nine months ended September 30, 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 judgments 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 4 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 nine months ended September 30, 2011. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 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 September 30, 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 nine-month period ended September 30, 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 nine months ended September 30, 2011 that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

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

There have been no events that are required to be reported under this Item.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

There have been no events that are required to be reported under this Item.

ITEM 4 SUBMUSSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5 OTHER INFORMATION

None

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: November 21, 2011	/s/ E. Lamar Seals, III
		By: E. Lamar Seals, III
		Chief Executive Officer, Chief Financial Officer and Chairman

Seals Entertainment Corp - FORM 10-Q - November 21, 2011

Attached files

Seals Entertainment Corp Reports