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EX-31 - EXHIBIT 31 - PROGUARD ACQUISITION CORP | proguard10k11ex31.htm |
EXCEL - IDEA: XBRL DOCUMENT - PROGUARD ACQUISITION CORP | Financial_Report.xls |
EX-32 - EXHIBIT 32 - PROGUARD ACQUISITION CORP | proguard10k11ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] 15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2011
OR
[ ] 15, 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: 333-123910
Proguard Acquisition Corp.
(Exact name of registrant as specified in its charter)
FLORIDA |
| 33-1093761 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification Number) |
954-491-0704
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [x]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange act
Yes [ ] No [x]
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 (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]
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 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the part 90 days.
Yes [x] No[ ]
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained hereof, and will not be contained, to will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
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 definitions of large accelerated filer, accelerated file and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] |
| Accelerated filer [ ] |
Non-accelerated filer [ ] |
| Smaller reporting company [x] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter. The market value of the registrants voting $.001 par value common stock held by non-affiliates of the registrant was approximately $158,400.
Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant's only class of common stock, as of March 30, 2012 was 3,300,000 shares of its $.001 par value common stock.
No documents are incorporated into the text by reference.
2
Proguard Acquisition Corp.
Form 10-K
For the Fiscal Year Ended December 31, 2011
Table of Contents
|
| Page |
Part I |
|
|
Item 1. Business |
| 4 |
Item 1A. Risk Factors |
| 4 |
Item 1B. Unresolved staff comments |
| 4 |
Item 2. Properties |
| 4 |
Item 3. Legal Proceedings |
| 4 |
Item 4. Mine Safety Disclosures |
| 4 |
|
|
|
Part II |
|
|
Item 5. Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities |
| 5 |
Item 6. Selected Financial Data |
| 6 |
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations |
| 6 |
Item 7A. Quantitative and Qualitative Disclosures about Market Risk |
| 7 |
Item 8. Financial Statements and Supplementary Data |
| 8 |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
| 19 |
Item 9A. Controls and Procedures |
| 19 |
Item 9B. Other Information |
| 20 |
|
|
|
Part III |
|
|
Item 10. Directors, Executive Officers and Corporate Governance |
| 21 |
Item 11. Executive Compensation |
| 23 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
| 25 |
Item 13. Certain Relationships and Related Transactions, and Director Independence |
| 26 |
Item 14. Principal Accountant Fees and Services |
| 26 |
|
|
|
Part IV |
|
|
Item 15. Exhibits, Financial Statements Schedules |
| 27 |
Signatures |
| 29 |
3
PART I
ITEM 1. BUSINESS
We are currently not conducting any business and have had no operating revenues since the sale of our wholly owned subsidiary on October 2, 2006.
Employees
We presently have no full-time employees and no part-time employees.
ITEM 1A. RISK FACTORS
Not applicable
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable
ITEM 2. PROPERTIES.
Our executive offices are located at 1909 Tyler St, Suite 603, Hollywood, FL 33020.
ITEM 3. LEGAL PROCEEDINGS.
Proguard Acquisition management is aware of no pending or threatened litigation. During the fourth quarter of the fiscal year ended December 31, 2011, Proguard Acquisition was not a party to any legal proceedings.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable
4
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Item 5(a)
Market Information
a) Market Information. The registrants common shares are listed on the FINRA Over the Counter Bulletin Board under the symbol PGRD. As of December 31, 2011, there was only a limited market for registrants common shares.
The following table sets forth the range of high and low bid quotations for the registrant's common stock. The quotations represent inter-dealer prices without retail markup, markdown or commission, and may not necessarily represent actual transactions.
Quarter Ended |
| High Bid |
| Low Bid |
3/31/10 |
| 0.35 |
| 0.14 |
6/30/10 |
| 0.175 |
| 0.09 |
9/30/10 |
| 0.23 |
| 0.07 |
12/31/10 |
| 0.41 |
| 0.06 |
3/31/11 |
| 0.18 |
| 0.05 |
6/30/11 |
| 0.20 |
| 0.10 |
9/30/11 |
| 0.15 |
| 0.08 |
12/31/11 |
| 0.08 |
| 0.04 |
b) Holders. At March 30, 2012, there were approximately 90 shareholders and ten warrant holders of the registrant.
c) Dividends. Holders of the registrant's common stock are entitled to receive such dividends as may be declared by its board of directors. No dividends on the registrants common stock have ever been paid, and the registrant does not anticipate that dividends will be paid on its common stock in the foreseeable future.
d) Securities authorized for issuance under equity compensation plans. No securities are authorized for issuance by the registrant under equity compensation plans.
e) Performance graph. Not applicable.
f) Sale of unregistered securities. None.
Item 5(b) Use of Proceeds. Not applicable.
5
Item 5(c) Purchases of Equity Securities by the issuer and affiliated purchasers.
Not applicable
ITEM 6. SELECTED FINANCIAL DATA
Not applicable
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Trends and Uncertainties. We are no longer conducting any material operations since the sale of our wholly owned subsidiary on October 2, 2006. We have not yet determined what operations, if any, we intend to pursue.
Investing Activities. For the year ended December 31, 2011 and 2010, Proguard Acquisition did not pursue any investing activities.
Financing Activities. For the year ended December 31, 2010, Proguard Acquisition borrowed $13,037 from related parties and Proguard Acquisition received $5,000 from a related party to repay funds previously advanced. As a result, Proguard Acquisition had net cash provided by financing activities of $18,037.
For the year ended December 31, 2011 the company received a contribution to its capital of $25,000 from certain shareholders of the company. The company repaid $13,037 of advances to affiliates. As a result, Proguard Acquisition had cash provided by financing activities of $11,963.
Results of Operations. For the years ended December 31, 2011 and 2010, we did not receive any revenues from continuing operations. We earned interest income of $0 for the year ended December 31, 2011 compared to $185 for the year ended December 31, 2010.
For the year ended December 31, 2011, we had a loss from continuing operations of $(35,275) compared to $(72,862) for the year ended December 31, 2010.
General and administrative expenses for the year ended December 31, 2011 were $35,275 compared to $73,047 for the prior year. These expenses principally consisted of professional and consulting fees, and office expense. The decrease in general and administrative expenses was largely due to a decrease in rent and consulting fees.
6
As a result, we incurred a net loss of $(35,275) for the year ended December 31, 2011 compared to net loss of $(72,862) for the year ended December 31, 2010.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
7
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PROGUARD ACQUISITION CORP.
Index to
Financial Statements
|
| Page |
Report of Independent Registered Public Accounting Firm |
| 8 |
|
|
|
Balance Sheets at December 31, 2011 and 2010 |
| 10 |
|
|
|
Statements of Operations for the years ended December 31, 2011 and 2010 |
| 11 |
|
|
|
Statement of Changes in Stockholders' Deficit for the years ended December 31, 2011 and 2010 |
| 12 |
|
|
|
Statements of Cash Flows for the years ended December 31, 2011 and 2010 |
| 13 |
|
|
|
Notes to Financial Statements |
| 14 |
8
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
Proguard Acquisition Corp.
Ft. Lauderdale, Florida
We have audited the balance sheets of Proguard Acquisition Corp. as of December 31, 2011 and 2010, and the accompanying related statements of operations, changes in stockholders' deficit and cash flows for the years ended December 31, 2011 and 2010. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Proguard Acquisition Corp. as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has an accumulated deficit as of December 31, 2011 and no source of revenue, which raises substantial doubt about its ability to continue as a going concern. Managements plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Sherb & Co., LLP
Sherb & Co. LLP
Certified Public Accountants
Boca Raton, Florida
March 21, 2012
9
PROGUARD ACQUISITION CORP.
Balance Sheets
|
| December 31, 2011 |
| December 31, 2010 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
| $ 7,691 |
| $ 251 |
Total Current Assets |
| $ 7,691 |
| $ 251 |
|
| ======== |
| ========= |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts Payable |
| $ 13,500 |
| $ 12,148 |
Due to affiliates |
| - |
| 13,037 |
Total Current Liabilities |
| 13,500 |
| 25,185 |
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding |
| - |
| - |
Common stock, $0.001 par value, 50,000,000 shares authorized, 3,300,000 shares issued and outstanding in 2011 and 2010 |
| 3,300 |
| 3,300 |
Additional paid-in capital |
| 787,497 |
| 733,097 |
Accumulated deficit |
| (796,606) |
| (761,331) |
Total Stockholders' (Deficit) |
| (5,809) |
| (24,934) |
|
|
|
|
|
Total liabilities and stockholders' equity |
| $ 7,691 |
| $ 251 |
|
| ======== |
| ======== |
See accompanying notes to the financial statements.
10
PROGUARD ACQUISITION CORP.
STATEMENTS OF OPERATIONS
|
| For the years ended December 31, | ||
|
| 2011 |
| 2010 |
Interest Income |
| $ - |
| $ 185 |
|
|
|
|
|
General and administrative expenses |
| (35,275) |
| (73,047) |
(Net Loss) |
| $(35,275) |
| $(72,862) |
|
| ======= |
| ======= |
Net (loss) per common share: |
|
|
|
|
Basic and diluted (loss) per common share |
| $ (0.01) |
| $ (0.02) |
|
| ======= |
| ======= |
Weighted average number of common shares and common equivalent shares |
|
|
|
|
Basic |
| 3,300,000 |
| 3,300,000 |
|
| ======= |
| ======= |
Diluted |
| 3,300,000 |
| 3,300,000 |
|
| ======== |
| ======== |
See accompanying notes to the financial statements.
11
PROGUARD ACQUISITION CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2011 and 2010
|
| Common Stock |
| Additional Paid-in |
| Accumulated |
|
| ||
|
| Shares |
| Amount |
| Capital |
| Deficit |
| Total |
Balance, December 31, 2009 |
| 3,300,000 |
| $3,300 |
| $720,847 |
| $(688,469) |
| $35,678 |
|
|
|
|
|
|
|
|
|
|
|
Contribution of Capital |
| - |
| - |
| 12,250 |
| - |
| 12,250 |
Net (Loss) |
| - |
| - |
| - |
| (72,862) |
| (72,862) |
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2010 |
| 3,300,000 |
| 3,300 |
| 733,097 |
| (761,331) |
| (24,934) |
|
|
|
|
|
|
|
|
|
|
|
Contribution of Capital |
| - |
| - |
| 54,400 |
| - |
| 54,400 |
Net (Loss) |
| - |
| - |
| - |
| (35,275) |
| (35,275) |
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2011 |
| 3,300,000 |
| $3,300 |
| $787,497 |
| $(796,606) |
| $(5,809) |
|
| ======== |
| ====== |
| ======== |
| ========= |
| ======= |
See accompanying notes to the financial statements.
12
PROGUARD ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
|
| For the years ended December 31, | |||
|
| 2011 |
| 2010 | |
Cash flows from operating activities: |
|
|
|
| |
Net (loss) |
| $(35,275) |
| $(72,862) | |
|
|
|
|
| |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: |
|
|
|
| |
Decrease in Accrued interest receivable |
| - |
| 1,189 | |
Increase in accounts payable |
| 1,352 |
| 9,785 | |
Total adjustments to net (loss) |
| 1,352 |
| 10,974 | |
Net cash (used in) operating activities |
| (33,923) |
| (61,888) | |
|
|
|
|
| |
Cash flows from investing activities |
| - |
| - | |
|
|
|
|
| |
Cash flows from financing activities: |
|
|
|
| |
Repayments of advances to affiliate |
| (13,037) |
| 5,000 | |
Contribution of capital |
| 54,400 |
| 25,287 | |
Net cash provided by financing activities |
| 41,363 |
| 30,287 | |
Net increase (decrease) in cash |
| 7,440 |
| (31,601) | |
|
|
|
|
| |
Cash, beginning of year |
| 251 |
| 31,852 | |
Cash, end of year |
| $ 7,691 |
| $ 251 | |
|
| ====== |
| ====== | |
Supplemental cash flow information: |
|
|
|
| |
Cash paid for interest |
| - |
| - | |
|
| ====== |
| ====== | |
Cash paid for income taxes |
| - |
| - | |
|
| ======= |
| ======= |
See accompanying notes to the financial statements.
13
PROGUARD ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2011 AND 2010
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations.
The accompanying financial statements present the accounts of Proguard Acquisition Corp. (the Company), formed in Florida in June 2004.
Cash and Cash Equivalents.
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Net Income (Loss) Per Common Share.
Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon conversion of preferred shares, exercise of stock options and warrants (calculated using the reverse treasury stock method). The dilutive common shares equivalents, including convertible notes, preferred stock and warrants, are not included in the computation of diluted earnings per share, because the inclusion would be anti-dilutive.
Income Taxes.
Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax asset and liabilities for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than changes in the tax law or rates. A valuation allowance is recorded when it is deemed more likely than not that a deferred tax asset will be not realized.
Concentrations.
The Company maintains cash in financial institutions insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.
14
Recent accounting pronouncements
In May 2011, the FASB issued guidance and clarification about the application of existing fair value measurements and disclosure requirements. This guidance will be effective for interim and fiscal periods beginning after December 15, 2011. We will review the requirements under the standard to determine what impacts, if any, the adoption would have on our consolidated financial statements.
In June 2011, FASB issued guidance which eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance requires all nonowner changes in stockholders equity to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements, and requires presentation on the face of the financial statements of reclassification adjustments for items that are reclassified from other comprehensive income to net income. This guidance is effective for fiscal period beginning after December 15, 2011. The adoption of this standard will not impact our consolidated financial statements.
In September 2011, the FASB amended its guidance regarding the disclosure requirements for employers participating in multiemployer pension and other postretirement benefit plans (multiemployer plans) to improve transparency and increase awareness of this commitments and risks involved with participation in multiemployer plans. The new accounting guidance requires employers participating in multiemployer plans to provide additional quantitative and qualitative disclosures to provide users with more detailed information regarding the employers involvement in multiemployer plans. The provisions of this new guidance are effective for annual periods beginning with fiscal years ending after December 15, 2011, with early adoption permitted. The Company anticipates that adoption of these additional disclosures will not have a material effect on our consolidated financial statements.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350) Testing Goodwill for Impairment. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2011. The Company does not anticipate the provisions of ASU 2011-08 will have a material effect on our consolidated financial statements.
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.
15
In February 2010, the FASB issued an amendment to the accounting standards relating to the accounting for, and disclosure of, subsequent events in an entitys consolidated financial statements. This standard amends the authoritative guidance for subsequent events that were previously issued and among other things exempt Securities and Exchange Commission registrants from the requirement to disclose the date through which it has evaluated subsequent events for either original or restated financial statements. This standard does not apply to subsequent events or transactions that are within the scope of other applicable GAAP that provides different guidance on the accounting treatment for subsequent events or transactions. The adoption of this standard did not have a material impact on the Companys financial statements.
Use of Estimates.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Share-Based Payments.
Effective January 1, 2006, the Company has fully adopted the provisions of ASC Topic 718 Compensation Stock Compensation and related interpretations. As such, compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
Going Concern.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The amounts of assets and liabilities in the financial statements do not purport to represent realizable or settlement values. The Company has an accumulated deficit of $796,606 as of December 31, 2011 and continuing losses. Such losses may impair its ability to obtain additional financing.
These factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has met its historical working capital requirements from sale of capital shares. However, there can be no assurance that such financial support shall be ongoing or available on terms or conditions acceptable to the Company.
16
NOTE 2. RELATED PARTY TRANSACTIONS
During the year ended December 31, 2011 and 2010, the Company paid an affiliated entity $0 and $10,050, respectively, in rent, administration and taxes.
The Company borrowed funds during the year from a company with common shareholders. During the year, these borrowings were contributed to capital of the company.
NOTE 3. DUE TO, FROM AFFILIATES
During the year, the Company borrowed money from certain affiliates. The loans are due on demand and do not bear any interest. These borrowings were subsequently contributed to the capital of the company.
NOTE 4. INCOME TAXES
The Company accounts for income taxes under ASC 740, which requires use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.
Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.
The income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to net income (loss) before income taxes for the years ended December 31, 2011 and 2010, as shown:
17
|
| 2011 |
| 2010 |
Tax (benefit) at the federal statutory rate |
| $(12,250) |
| $(25,500) |
State taxes, net of federal benefit |
| (1,300) |
| (2,550) |
Increase in valuation allowance |
| 13,550 |
| 28,050 |
|
|
|
|
|
Tax expense (benefit) |
| $ - |
| $ - |
|
| ======= |
| ======= |
The components of the deferred tax asset and deferred tax liability at December 31, 2011 and 2010 are as follows:
|
| 2011 |
| 2010 |
Deferred tax asset: |
|
|
|
|
Net operating loss carry forwards |
| $ 307,000 |
| $ 293,000 |
Valuation allowance |
| (307,000) |
| (293,000) |
|
| $ - |
| $ - |
|
| ======= |
| ======= |
As of December 31, 2011, the Company has a net operating loss carryforward of approximately $796,000. This loss will be available to offset future taxable income through December 31, 2031. If not used, this carryforward will expire through 2031 subject to IRS Code Section 382 limits.
NOTE 6. SUBSEQUENT EVENTS
We have evaluated events and transactions through the date the financial statements were issued, for potential recognition or disclosure in the accompanying financial statements. We did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.
18
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to insure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commissions rules and forms and that such information is accumulated and communicated to our management, including our CEO and CFO, or the persons performing similar functions, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has evaluated changes in internal control over financial reporting that accrued during 2011. Based on that evaluation, our CEO and CFO, or the persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
Managements Annual Report on Internal Control over Financial Reporting:
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our CEO and CFO, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management has evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control over Financial Reporting Guidance for Smaller Public Companies.
Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2011, and concluded that it is effective.
19
This annual report does not include an attestation report of the registrants registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the registrants registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only managements report in this annual report.
Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or those persons performing similar functions, our management has evaluated changes in our internal controls over financial reporting that occurred during the fourth quarter of 2010. Based on that evaluation, our CEO and CFO, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
ITEM 9B. OTHER INFORMATION.
None
20
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our bylaws provide that the number of directors who shall constitute the whole board shall be such number as the board of directors shall at the time have designated. We confirm that the number of authorized directors has been set at three pursuant to our bylaws. Each director shall be selected for a term of one year and until his successor is elected and qualified. Vacancies are filled by a majority vote of the remaining directors then in office with the successor elected for the unexpired term and until the successor is elected and qualified.
The directors and executive officers are as follows:
NAME |
| POSITIONS HELD |
| SINCE |
Allerton Towne, age 70 |
| Chief Executive Officer/ President/ Director |
| August 7, 2007 to present |
|
|
|
|
|
Norman H. Becker, age 74 |
| Treasurer/ CFO/ Controller/ Director |
| Inception to present |
|
|
|
|
|
Ricardo A. Rivera, age 41 |
| Vice President/ Secretary/ Director |
| Inception to present |
BUSINESS EXPERIENCE OF OFFICERS AND DIRECTORS
---------------------------------------------
Allerton Towne. From 1963 to 1975, Mr. Towne held various management positions with Ford Motor Company. They included distribution, sales planning and analysis, business management, and regional management. In 1975, Mr. Towne founded Drexel Leasing Corp. in Philadelphia, PA. He also established several retail ice cream shops in the tri-state area. Mr. Towne sold both businesses in 1981 and moved to Florida joining Conti-Commodity. A fully registered broker since 1983, Mr. Towne worked as a broker for Source Capital from 2000 to October 2006 specializing in IPOs, mergers and acquisitions and private placements. Mr. Towne earned a Bachelor of Science degree in business administration from Suffolk University in 1963.
Norman H. Becker has been treasurer and director of Proguard Acquisition since inception. Mr. Becker was a director of Ram Ventures Holdings Corp from 1987 to the change of control in March 2004. On January 15, 1993, Mr. Becker was appointed Ram Ventures president. Norman H. Becker has been president and director of Corrections Systems International, Inc., a dormant company without any current operations, since February 1988 and is in the process of terminating its existence.
21
Since January 1985, Mr. Becker has also been self-employed in the practice of public accounting in Hollywood, Florida. Mr. Becker is a 1959 graduate of City College of New York (Bernard Baruch School of Business) and is a member of a number of professional accounting associations including the American Institute of Certified Public Accountants and the Florida Institute of Certified Public Accountants.
Ricardo A. Rivera has been vice president, secretary and a director of Proguard Acquisition since inception. Mr. Rivera has served as vice president for Professional Programmers, Inc., d/b/a/ Corrections Services, Inc. since January 1999. Once a public company called Corrections Services, Inc., Professional Programmers is now a private Florida corporation headquartered in Ft. Lauderdale, Florida. CSI has been involved in the manufacturing, marketing, implementation and support of electronic monitoring systems since November 1984. CSI has installed and implemented electronic monitoring programs for private and government agencies involved in work release, probation, parole, pre-trial, and juvenile offenders. Mr. Rivera has over 14 years experience in the electronic monitoring industry. Mr. Rivera began as a technician in 1989, repairing electronic monitoring equipment.
Non-Qualified and Incentive Stock Option Plans
The registrant does not currently have any stock option plans.
Section 16(a). Beneficial Ownership Reporting Compliance
To the registrants knowledge, no director, officer or beneficial owner of more than ten percent of any class of equity securities o the registrant failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the year ended December 31, 2011.
Code of Ethics Policy
We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Corporate Governance
There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are exclusive and beyond the scope of our business and needs.
22
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation
The following shows the annual salaries, bonuses and stock options for our executive officers:
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
| Long-Term Compensation |
|
| ||||||
|
|
|
| Annual Compensation |
| Awards |
|
|
| Payouts |
|
|
|
| ||
Name and Principal Position |
| Year |
| Salary |
| Bonus (2) |
| Other Annual Compensation |
| Restricted Stock Awards |
| SARS |
| Options/ LTIP Payouts |
| All Other Compensation |
Allerton Towne |
| 2011 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
CEO |
| 2010 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
|
| 2009 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Norman H. Becker |
| 2011 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
CFO(1) |
| 2010 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
|
| 2009 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ricardo A. Rivera |
| 2011 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
VP |
| 2010 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
|
| 2009 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
All Executive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officers |
| 2011 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
As a Group |
| 2010 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
4 Persons |
| 2009 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
(1) Norman H. Becker P.A., an entity controlled by Mr. Becker, an officer and director, was paid $5,509 for various accounting services during the year ending December 31, 2011.
23
Option/SAR Grants in Last Fiscal Year
Individual Grants | ||||||||
Name: |
| Number of Securities Underlying Options/ SARs Granted (#) |
| % of Total Options/ SARs Granted to Employees in Fiscal Year |
| Exercise or Base Price ($/Sh) |
| Expiration Date |
Frank R. Bauer |
| - |
| - |
| - |
| - |
Norman Becker |
| - |
| - |
| - |
| - |
Allerton Towne |
| - |
| - |
| - |
| - |
Ricardo A. Rivera |
| - |
| - |
| - |
| - |
Option/SAR Grants in Last Fiscal Year
Name |
| Shares Acquired on Exercised (#) |
| Value Realized ($) |
| Number of Securities Underlying Unexercised Options/ SARs FY-End (#) Exercisable/ Unexercisable |
| Value of Unexercised In-the-Money Options/ SARs at FY-End ($) Exercisable/ Unexercisable |
Frank R. Bauer |
| - |
| - |
| - |
| - |
Norman Becker |
| - |
| - |
| - |
| - |
Allerton Towne |
| - |
| - |
| - |
| - |
Ricardo A. Rivera |
| - |
| - |
| - |
| - |
Messrs. Norman H. Becker and Allerton Towne devote approximately 10% of their time, respectively, to Proguard Acquisition's affairs. Prior to his death, Frank R. Bauer devoted approximately 20% of his time to Proguard Acquisition's and our former subsidiary's affairs. Ricardo A. Rivera currently devotes approximately 50% of his time to Proguard Acquisition. There are no employment agreements in effect or presently contemplated.
We do not have any standard arrangements by which directors are compensated for any services provided as a director. No cash has been paid to the directors in their capacity as such.
24
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following tabulates holdings of shares of Proguard Acquisition by each person or entity who, subject to the above, as of December 31, 2011, holds of record or is known by management to own beneficially more than 5.0% of the common shares and, in addition, by all directors and officers of Proguard Acquisition, individually and as a group. Each named beneficial owner has sole voting and investment power with respect to the shares set forth opposite his name.
Name of Beneficial Owners |
| Common Stock Beneficially Owned |
| Percentage Owned |
Allerton Towne |
| 0 |
| 0.00% |
1960 NE 30th Court |
|
|
|
|
Lighthouse Point, FL 33064 |
|
|
|
|
|
|
|
|
|
Norman H. Becker |
| 200,000 |
| 6.06% |
1909 Tyler Street, #603 |
|
|
|
|
Hollywood, FL 33020 |
|
|
|
|
|
|
|
|
|
Ricardo A. Rivera |
| 0 |
| 0.00% |
1422 North Royal Cove Circle |
|
|
|
|
Davie, FL 33325 |
|
|
|
|
|
|
|
|
|
Directors and Officers, |
|
|
|
|
as a group |
| 200,000 | directly | 6.06% |
|
|
|
|
|
|
|
|
|
|
Corrections Systems International |
| 300,000(1) |
| 9.09% |
2501 E. Commercial Boulevard |
|
|
|
|
Suite 207 |
|
|
|
|
Ft. Lauderdale, FL 33308 |
|
|
|
|
|
|
|
|
|
Financial Communications, Inc. |
| 283,450(1) |
| 8.59% |
P.O. Box 804 Pompano |
|
|
|
|
Pompano Beach, FL 33061 |
|
|
|
|
|
|
|
|
|
Professional Programmers, Inc. |
| 250,000(1) |
| 7.58% |
2757 NE 31 Street |
|
|
|
|
Lighthouse Pt. FL 33061 |
|
|
|
|
25
|
|
|
|
|
Diane Martini |
| 316,550 |
| 9.59% |
P.O. Box 804 Pompano |
|
|
|
|
Pompano Beach, FL 33061 |
|
|
|
|
|
|
|
|
|
Estate of Frank R. Bauer |
| 300,000 |
| 9.09% |
710 Cactus Flats Road |
|
|
|
|
Carbondale, CO 91623 |
|
|
|
|
Based upon 3,300,000 issued and outstanding as of December 31, 2011.
1. Corrections Systems International, Inc., Financial Communications, Inc. and Professional Programmers, Inc. are controlled by Diane Martini.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the year ended December 31, 2011 and 2010, Proguard Acquisition paid an affiliated entity $0 and $10,050.
Director Independence
The registrants board of directors consists of Allerton Towne, Norman Becker and Ricardo Rivera. None of the directors are independent as such term is defined by a national securities exchange or an inter-dealer quotation system. During the fiscal years ended December 31, 2011 and December 31, 2010, there were no transactions with related persons other than as described in the section above.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees. We incurred aggregate fees and expenses of $12,750 and $12,750 from Sherb & Co., LLP, respectfully for the 2011 and 2010 fiscal years. Such fees included work completed for our annual audit and for the review of our financial statements included in our Forms 10-K and 10-Q.
Tax Fees. We did not incur any aggregate tax fees and expenses from Sherb & Co., LLP for the 2011 and 2010 fiscal years for professional services rendered for tax compliance, tax advice, and tax planning.
26
All Other Fees. We incurred non-audit related fees of $0 and $0 from Sherb & Co., LLP during fiscal 2011 and 2010. The Board of Directors, acting as the Audit Committee considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence. All of the services described above for fiscal years 2011 and 2010 were approved by the Board of Directors pursuant to its policies and procedures. We intend to continue using Sherb & Co., LLP solely for audit and audit-related services, tax consultation and tax compliance services, and, as needed, for due diligence in acquisitions.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) List of financial statements included in Part II hereof:
Report of Independent Registered Public Accounting Firm
Balance Sheet at December 31, 2011 and 2010
Statements of Operations for the years ended December 31, 2011 and 2010
27
Statement of Changes in Stockholders Equity for the years ended December 31, 2011 and 2010
Statements of Cash Flows for the years ended December 31, 2011 and 2010
Notes to Financial Statements
(a)(2) List of financial statement schedules included in Part IV hereof:
None
(a)(3) Exhibits
All of the following exhibits are incorporated by reference to Form SB-2 and its amendments, file no: 333-123910.
3.i Articles of Incorporation
3.ii By-Laws
4.i Form of Specimen of common stock
4.ii Form of Warrant
10.1 Lease Agreement
10.2 GE Interlogix Authorized Dealer Agreement
10.3 Promissory Note dated January 31, 2005
10.4 Promissory Note dated March 15, 2004
10.5 Promissory Note dated January 31, 2003
The following documents are filed as a part of this report:
Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
101.INS** XBRL Instance Document
101.SCH** XBRL Taxonomy Extension Schema Document
101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF** XBRL Taxonomy Extension Definition Linkbase Document
101.LAB** XBRL Taxonomy Extension Label Linkbase Document
101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith
**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, Proguard Acquisition has duly caused this Report to be signed on its behalf by the undersigned duly authorized person.
Date: March 30, 2012
Proguard Acquisition Corp.
/s/Allerton Towne
By: Allerton Towne
Chief Executive Officer
In accordance with the requirements of the Securities Exchange Act of 1934, as amendment, this report has been signed by the following persons in the capacities and on the dates stated.
Proguard Acquisition Corp.
(Registrant)
By: /s/Norman Becker
Dated: March 30, 2012
Controller, Chief Financial Officer
Director
By: /s/Ricardo A. Rivera
Dated: March 30, 2012
Director
By: /s/Allerton Towne
Dated: March 30, 2012
Director
29