Item 1. Business.
Business Development
Global Risk Management & Investigative Solutions (“Global”) was incorporated in the state of Nevada on May 2, 2007. The Company was established to provide investigative, technical IT, background, document verification, and data banks of security information to a wide range of clients.
On November 15, 2007, we entered into a Strategic Alliance Agreement with Global Intelligence Network, a Nevada corporation, Attorney’s Process & Investigation Services, Inc., a Wisconsin corporation, Griffin Investigations, a Nevada corporation, AmericanChecked, Inc., a Oklahoma corporation, GGS-US Ltd., a Nevada corporation, International Investigative Solutions, a Nevada corporation and AP-ID Incorporated, a Nevada corporation (hereinafter referred to individually as “Member” and collectively as “Members”), whereas the Members and Global agreed to market and perform certain complementary business consulting services. Global was created to be a one source risk management and security solution for multiple industries and the Members are independently in various risk management and security solutions businesses, including investigative, technical IT, background, document verification, and data banks of security information to a wide range of clients.
The term of the agreement began on November 15, 2007 and will expire in five (5) years, November 16, 2012. The agreement will be automatically renewed for successive one (1) year periods unless either party gives written notice of termination to the other party at least thirty (30) days prior to the date of expiration.
Pursuant to the agreement, Global will act as the coordinator of referrals originating from Members to Members. Members will be compensated for actual sales of products and services to customers and end users resulting from sales referrals generated by other Members. All referrals will be submitted to Global by the Members (“Referral Provider”) and Global will determine which Member (“Recipient”) to refer the referral to based upon each Members product, services, and ability to service the customer or end user. The Recipient will pay Global a ten percent (10%) commission for sales of Recipient’s products and services. Global will pay the Referral Provider one-half of the collected commission.
In fiscal 2009 we were noticing the effects of the overall global recession and slowdown in consumer and business spending throughout the United States. As a result, we believe our future revenues and results of operations throughout fiscal 2010 will continue to be severely impacted by the recession. Further, we do not believe the results of operations set forth in this report are indicative of future performance.
Recent Developments
Subsequent to the year ended December 31, 2009, on July 30, 2010, we entered into an agreement and plan of merger (the “Merger Agreement”) by and among us, G8 Acquisition Subsidiary, Inc., a Nevada corporation and our wholly-owned subsidiary (“G8S”), and Guardian 8 Corporation, a Nevada corporation (“Guardian 8”).
Under the terms of the Merger Agreement, G8S will be merged with and into Guardian 8, with Guardian 8 as the surviving corporation and new wholly owned subsidiary of us. Pursuant to the Merger Agreement, at the effective time of the merger each issued and outstanding share of Guardian 8 shall be cancelled and converted into one share of our restricted common stock.
The completion of the merger is subject to the satisfaction of several conditions. See Item 9B below for a further discussion of the Merger Agreement.
About Guardian 8
Guardian 8 Corporation has, through its founder, developed what it believes to be a unique and novel mobile/compact personal security device that may be used to draw attention and discourage attack. The device, known as the “PERSONAL SECURITY GUARDIAN”, will employ several countermeasures to allow a user to ward off an eminent attack, including:
·
Emit an audible alarm and strobe light to frighten an attacker, temporarily impair their vision, and alert others;
·
Ability to link to the user’s personal cell phone using Bluetooth technology to automatically dial 9-1-1 to communicate to police dispatch and transmit your GPS location;
·
Provide an audio and video recording of an incident;
·
Transmit the user’s GPS location;
·
Allow the user to accurately direct pepper-spray upon the attacker with a tracer substance to assist in subsequent identifications;
·
Providing a laser pointer for enhancing aiming accuracy;
·
Transmit a custom message-being attacked, name, age and license plate number and last 30 seconds of ambient audio prior to trigger, also sends video or video frame of attacker;
·
Enable a PTT-push to talk feature to talk with Police Dispatch directly;
·
Repeating audio and video transmission to Police Dispatch and after a certain amount of time defaulting to a communication device to Police Dispatch.
Business of Issuer
Global, together with the Members, is a global provider of complementary risk consulting services. Pursuant to the Strategic Alliance Agreement, Global provides the client a single source for all their risk management and security solutions. The Members chosen were hand picked for their expertise.
Members and Services
Global Intelligence Network. Global Intelligence Network is a private investigative firm which conducts background investigations of individuals and companies for governmental compliance, regulatory due diligence, pre-employment backgrounds and employee re-evaluations in over 70 countries.
Attorney’s Process & Investigation Services, Inc. Attorney’s Process & Investigation Services, Inc. provides litigation support services and assists corporations and government agencies with their growing investigative support needs. They also provide local, regional, national, and international clients with successful solutions to their security and personnel challenges.
Griffin Investigations. Griffin Investigations is the exclusive international supplier of surveillance intelligence data providing complete historical database available to gaming establishments. Griffin also provides the first step in defense from suspected cheaters and counters assisting in identifying the subject.
AmericanChecked, Inc. AmericanChecked, Inc. is a single source provider offering a complete menu of background screening, assessment and drug testing services.
Spriggs, Inc. Spriggs, Inc. is a private investigations and security firm specializing in high end retail and executive protection. Spriggs provides upscale security related services to corporate clientele through three business divisions: retail services, associated services and executive services.
International Investigative Solutions. International Investigative Solutions is a provider of background investigations of individuals and companies for pre-employment backgrounds and employee re-evaluations.
AP-ID Incorporated. AP-ID Incorporated produces ePAC. ePAC, Electronic Patriot Act Compliance, is comprised of sophisticated document scanner and revolutionary software that identifies the form of document, authenticates that the document is valid, and then validates the individuals’ status against nations “watch” lists as well as the clients own internal lists, and procedures.
Competition
We compete with numerous other risk management and security solutions companies. Many of these competitors have substantially greater resources than us. Should a larger and better financed company decide to directly compete with us, and be successful in its efforts, our business could be adversely affected.
Personnel
We are a development stage company and as of December 31, 2009, we did not have any employees, other than Kyle Edwards, our President and Chief Executive Officer. We look to our officers and directors who collectively have a varied background in law enforcement, security, internet security and technology, loss prevention, background screening, private investigations, due diligence, customer service evaluations, and regulatory compliance. We do not anticipate hiring employees over the next 12 months. We intend to use the services of consultants to perform various professional services. We believe that this use of third-party service providers may enhance our ability to contain general and administrative expenses.
Governmental Regulations
Global’s business is subject to various federal, state, local and foreign laws and regulations. We hold private investigative licenses from, and our investigative activities are regulated by, state and local government agencies in various jurisdictions. Global also uses some data from outside sources, including data from third party vendors and various government and public records services, in performing its services, the use of which is regulated by certain laws and regulations. To date, applicable laws and regulations have not interfered materially with the manner in which Global obtains information and conducts its operations, including its access to data used in Global’s business. However, changes in these laws and regulations or the adoption of new laws or regulations, particularly those relating to privacy, could interfere with Global’s method of operations and access to data.
Global believes that it currently conducts its activities and operations in substantial compliance with applicable governmental laws and regulations.
Item 1A.
Item 1A. Risk Factors.
In the course of conducting our business operations, we are exposed to a variety of risks that are inherent to our industry. The following discusses some of the key inherent risk factors that could affect our business and operations, as well as other risk factors which are particularly relevant to us in the current period of significant economic and market disruption. Other factors besides those discussed below or elsewhere in this report also could adversely affect our business and operations, and these risk factors should not be considered a complete list of potential risks that may affect us.
We may not complete the proposed merger with Guardian 8 Corporation, and even if we do, our companies have not operated as a combined entity and are not fully integrated, and we may not be able to integrate them successfully.
In July of 2010 we executed an agreement and plan of merger with Guardian 8 Corporation and we are in the process of completing the merger. We may not be able to complete this merger.
Further, even if we are able to successfully complete the proposed merger, Guardian 8 Corporation has been operated as a separate independent entity to date, and we may not be able to integrate the operations of Guardian 8 successfully or institute the necessary systems and procedures, including accounting and financial reporting systems, to manage the combined enterprise on a profitable basis. Our management group will be replaced by the management of Guardian 8 upon consummation of the merger and may not be able to manage the combined entity effectively or to successfully implement successful operating strategies. Any inability to integrate Guardian 8 successfully would have a material adverse effect on our business, financial condition and results of operations.
Declining economic conditions could negatively impact our business
Our businesses and earnings are affected by general business and economic conditions in the United States and abroad. General business and economic conditions that could affect us include the level and volatility of short-term and long-term interest rates, inflation, home prices, employment levels, bankruptcies, household income, consumer spending, fluctuations in both debt and equity capital markets, liquidity of the global financial markets, the availability and cost of credit, investor confidence, and the strength of the U.S. economy and the local economies in which we operate.
Continued instability of the U.S. financial system may have a negative impact on our business.
Beginning in the fourth quarter of 2008, the U.S. government has responded to the ongoing financial crisis and economic slowdown by enacting new legislation and expanding or establishing a number of programs and initiatives. Each of the U.S. Treasury, the FDIC and the Federal Reserve Board have developed programs and facilities, including, among others, the U.S. Treasury’s Troubled Asset Relief Program (“TARP”) Capital Purchase Program and other efforts designed to increase inter-bank lending, improve funding for consumer receivables and restore consumer and counterparty confidence in the banking sector. In addition, Congress recently passed the American Recovery and Reinvestment Act of 2009 (the “ARRA”), legislation intended to expand and establish government spending programs and provide tax cuts to stimulate the economy. Congress and the U.S. government continue to evaluate and develop various programs and initiatives designed to stabilize the financial and housing markets and stimulate the economy, including the U.S. Treasury’s recently announced Financial Stability Plan and the U.S. government’s recently announced foreclosure prevention program. The final form of any such programs or initiatives or related legislation cannot be known at this time. There can be no assurance as to the impact that ARRA, the Financial Stability Plan or any other such initiatives or governmental programs will have on the financial markets, including the extreme levels of volatility and limited credit availability currently being experienced. The failure of these efforts to stabilize the financial markets and a continuation or worsening of current financial market conditions could materially and adversely affect our business, financial condition, results of operations, access to credit, or the trading price of our securities.
We are a development stage company organized in May 2007 and have recently commenced operations, which makes an evaluation of us extremely difficult. At this stage of our business operations, even with our good faith efforts, we may never become profitable or generate any significant amount of revenues, thus potential investors have a high probability of losing their investment.
We were incorporated in May of 2007 as a Nevada corporation. As a result of our start-up operations we have; (i) generated minimal revenues of $162,115 since inception, (ii) accumulated a deficit of $456,236 as of December 31, 2009, and (iii) we have incurred losses of $209,099 for the year ended December 31, 2009, and have been focused on organizational and start-up activities, business plan development, and website design since we incorporated. In addition, we have entered into a Strategic Alliance Agreement with seven other companies (the “Members”) who are independently in various risk management and security solutions businesses. Although we have established a website there is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our service, the level of our competition and our ability to attract and maintain key management and employees.
Our auditor’s have substantial doubt about our ability to continue as a going concern. Additionally, our auditor’s report reflects the fact that the ability of the Company to continue as a going concern is dependent upon its ability to obtain additional sources of capital or borrowings and, ultimately the achievement of significant operating revenues. If we are unable to continue as a going concern, you will lose your investment.
Our auditor’s report reflects that our ability to continue as a going concern is dependent upon our ability to obtain additional sources of capital or borrowings and, ultimately, the achievement of significant operating revenues. If we are unable to continue as a going concern, you will lose your investment.
Competitive conditions could materially adversely affect our business.
The markets in which we do, and intend to do business are highly competitive with few barriers to entry. In most service areas in which we operate, there is at least one competitor that is significantly larger or more established than we are in the delivery of that particular service. Most of our competitors have significantly larger financial and other resources than we have and have long-established relationships with their clients, which also are likely to be clients or prospective clients of ours. In addition, large multinational security services providers have indicated an interest in expanding their services to include value-added services such as some of the risk mitigation services we provide.
We are highly dependent on our officers and directors.
We rely heavily on our officers and directors to provide services and for continued business development. It would be difficult to replace any of our officers and directors at such an early stage of development of Global. Global’s business could be materially adversely affected if a number of our officers and directors were to leave and if Global were unable to retain qualified replacements.
We may need to raise additional capital, which may not be possible.
Although we believe that the net proceeds of our offering will be sufficient to fund our general working capital needs for not less than six months, there can be no assurance that we will be able to generate sufficient funds from operations to support ongoing operations after such period of time. In the event that we would need additional debt or equity financing to support operations, there is no assurance that we would be able to raise such capital in an amount sufficient to continue our operations after the proceeds of the offering have been used.
In the event we require additional financing, we will seek such financing through bank borrowing, debt or other equity financing, corporate partnerships or otherwise. We cannot assure you that such financing would be available to the Company in the amounts or at the times we may require the financing, or if we do obtain any financing that it would be on terms that would allow us to achieve profitability and to sustain our business. We do not presently have a credit line available with any lending institution. Any additional equity financing may involve the sale of additional shares of our common stock on terms that have not yet been established. These terms may be more favorable to future investors than those contained herein.
There is no current public market for our common stock; therefore you may be unable to sell your securities at any time, for any reason, and at any price, resulting in a loss of your investment.
As of the date of this filing, there is no public market for our common stock and there can be no assurance that our attempts to do so will be successful. Furthermore, if our securities are not quoted on the OTC Bulletin Board, or elsewhere, there can be no assurance that a market will develop for the common stock or that a market in the common stock will be maintained. As a result of the foregoing, investors may be unable to liquidate their investment for any reason.
Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.
Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:
·
Deliver to the customer, and obtain a written receipt for, a disclosure document;
·
Disclose certain price information about the stock;
·
Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;
·
Send monthly statements to customers with market and price information about the penny stock; and
·
In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.
Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.
We have the ability to issue additional shares of our common stock and shares of preferred stock without asking for stockholder approval, which could cause your investment to be diluted.
Our Certificate of Incorporation authorizes the Board of Directors to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. The power of the Board of Directors to issue shares of common stock, preferred stock or warrants or options to purchase shares of common stock or preferred stock is generally not subject to shareholder approval. Accordingly, any additional issuance of our common stock, or preferred stock that may be convertible into common stock, may have the effect of diluting one’s investment.
By issuing preferred stock, we may be able to delay, defer or prevent a change of control.
We are authorized to issue a total of 10,000,000 shares of “blank check” preferred stock. Our Board of Directors can determine the rights, preferences, privileges and restrictions granted to, or imposed upon, the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series. It is possible that our Board of Directors, in determining the rights, preferences and privileges to be granted when the preferred stock is issued, may include provisions that have the effect of delaying, deferring or preventing a change in control, discouraging bids for our common stock at a premium over the market price, or that adversely affect the market price of and the voting and other rights of the holders of our common stock.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
We have a limited number of personnel that are required to perform various roles and duties as well as be responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.
Additional Risks and Uncertainties
We are a diversified financial services company. Although we believe our diversity helps lessen the effect when downturns affect any one segment of our industry, it also means our earnings could be subject to different risks and uncertainties than the ones discussed herein. If any of the risks that we face actually occur, irrespective of whether those risks are described in this section or elsewhere in this report, our business, financial condition and operating results could be materially adversely affected.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2.
Item 2. Properties.
Our executive office is located at 3950 East Patrick Lane, Suite 101, Las Vegas, Nevada 89120. During the period ended September 30, 2009, we entered into an Administrative Rent and Service Agreement with Global Intelligence Network, Inc., which is controlled by a founding shareholder and director of the Company. Pursuant to this agreement, Global Intelligence has agreed to provide office space, administrative staff, supplies and equipment to the Company in exchange for a quarterly service fee of $15,625. The agreement was for a period of one year beginning on April 1, 2009.
Item 3.
Item 3. Legal Proceedings.
We may become involved in various routine legal proceedings incidental to our business. However, to our knowledge as of the date of this report, there are no material pending legal proceedings to which we are a party or to which any of our property is subject.
Item 4.
Item 4. (Removed and Reserved).
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
(a) Market Information
There is currently no public market for our securities.
(b) Holders of Common Stock
As of October 1, 2010, there were approximately 41 holders of record of our Common Stock and 5,554,110 shares outstanding.
(c) Dividends
In the future we intend to follow a policy of retaining earnings, if any, to finance the growth of the business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends on the Common Stock will be the sole discretion of board of directors and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions, future prospects and other factors deemed relevant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
Subsequent Issuances After Year-End.
On June 30, 2010, we authorized the issuance of 500,000 shares of our common stock to Kyle Edwards as partial consideration for accrued compensation payable to Mr. Edwards under the terms of his employment agreement and for cancellation of the employment agreement. We believe that the authorization and issuance of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof. The shares were issued in October of 2010.
On June 30, 2010, we authorized the issuance of 250,000 shares of our common stock to Global Intelligence Network as consideration for accrued expenses payable to Global Intelligence Network under the terms of a services and rent agreement and for cancellation of the agreement. We believe that the authorization and issuance of the shares was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof. The shares were issued in October of 2010.
Use of Proceeds From Sales of Registered Securities
Our Registration Statement on Form S-1 (File No. 333-150954), related to our initial public offering, was declared effective by the SEC on June 16, 2008. A total of 1,000,000 new shares of common stock were registered with the SEC with an aggregate offering price of $500,000. All of these shares were registered on our behalf. As of the date of this filing we have not sold any shares under the registration statement and anticipate withdrawing this registration statement.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the year ended December 31, 2009.
Item 6.
Item 6. Selected Financial Data.
Not applicable.
Item 7.
Item 7. Plan of Operation.
Overview and Outlook
Global is a development stage company incorporated in the State of Nevada in May of 2007. We were formed to provide investigative, technical IT, background, document verification, and data banks of security information to a wide range of clients.
On November 15, 2007, we entered into a Strategic Alliance Agreement with Global Intelligence Network, a Nevada corporation, Attorney’s Process & Investigation Services, Inc., a Wisconsin corporation, Griffin Investigations, a Nevada corporation, AmericanChecked, Inc., a Oklahoma corporation, GGS-US Ltd., a Nevada corporation, International Investigative Solutions, a Nevada corporation and Veridocs (formerly AP-ID Incorporated), a Nevada corporation (hereinafter referred to individually as “Member” and collectively as “Members”), whereas the Members and Global agreed to market and perform certain complementary business consulting services.
As a result of the Strategic Alliance Agreement we have become a one source risk management and security solution for multiple industries.
In September of 2008, Mr. Steve Toneguzzo, a director of the Company and President of GGS-US Ltd., a Member pursuant to the Strategic Alliance Agreement, resigned his position as a director of the Company and requested to be terminated from the Strategic Alliance Agreement. As a result of Mr. Toneguzzo’s resignation the Company and the Members entered into an addendum to the Strategic Alliance Agreement to replace GGS-US Ltd. as a member with Spriggs Inc., a private investigations and security firm specializing in high end retail and executive protection. Spriggs Inc., is licensed in multiple states with international capabilities.
Additionally, in October 2008 the board of directors appointed Michael Spriggs, President of Spriggs Inc. to serve on the Company’s board of directors.
Since our inception on May 2, 2007 through December 31, 2009, we generated $162,115 in revenues and have incurred a net loss of $456,236. For the year ended December 31, 2009, we generated $37,193 in revenues and incurred a net loss of $209,099.
Merger with Guardian 8 Corporation
Subsequent to the year ended December 31, 2009, we entered into an agreement and plan of merger (the “Merger Agreement”) by and among us, G8 Acquisition Subsidiary, Inc., a Nevada corporation and our wholly-owned subsidiary (“G8S”), and Guardian 8 Corporation, a Nevada corporation (“Guardian 8”).
Under the terms of the Merger Agreement, G8S will be merged with and into Guardian 8, with Guardian 8 as the surviving corporation and new wholly owned subsidiary of us. Pursuant to the Merger Agreement, at the effective time of the merger each issued and outstanding share of Guardian 8 shall be cancelled and converted into one share of our restricted common stock.
The completion of the merger is subject to the satisfaction of several conditions. See Item 9B below for a further discussion of the Merger Agreement.
About Guardian 8
Guardian 8 Corporation has, through its founder, developed what it believes to be a unique and novel mobile/compact personal security device that may be used to draw attention and discourage attack. The device, known as the “PERSONAL SECURITY GUARDIAN”, will employ several countermeasures to allow a user to ward off an eminent attack, including:
·
Emit an audible alarm and strobe light to frighten an attacker, temporarily impair their vision, and alert others;
·
Ability to link to the user’s personal cell phone using Bluetooth technology to automatically dial 9-1-1 to communicate to police dispatch and transmit your GPS location;
·
Provide an audio and video recording of an incident;
·
Transmit the user’s GPS location;
·
Allow the user to accurately direct pepper-spray upon the attacker with a tracer substance to assist in subsequent identifications;
·
Providing a laser pointer for enhancing aiming accuracy;
·
Transmit a custom message-being attacked, name, age and license plate number and last 30 seconds of ambient audio prior to trigger, also sends video or video frame of attacker;
·
Enable a PTT-push to talk feature to talk with Police Dispatch directly;
·
Repeating audio and video transmission to Police Dispatch and after a certain amount of time defaulting to a communication device to Police Dispatch.
Operation Plan
During the next twelve months we plan to focus on the completion of the Guardian 8 merger described above. If we consummate the merger, our operations will switch to those of Guardian 8. However, if we do not complete the merger, we will seek out other merger or acquisition candidates.
Satisfaction of our cash obligations for the next 12 months.
As of December 31, 2009, our cash balance was $4,478. Our plan for satisfying our cash requirements for the next twelve months is through the consummation of the Guardian 8 merger. We anticipate sales-generated income will be minimal until we complete the merger.
Going Concern
The consolidated financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of Global as a going concern. Global may not have a sufficient amount of cash required to pay all of the costs associated with operating and marketing of its services. Management intends to use borrowings and security sales to mitigate the effects of cash flow deficits, however no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should Global be unable to continue existence.
Summary of product and research and development that we will perform for the term of our plan.
We do not anticipate performing any significant product research and development under our plan of operation. In lieu of product research and development we anticipate maintaining control over our advertising to assist us in determining the allocation of our limited advertising dollars.
Expected purchase or sale of plant and significant equipment.
We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time or in the next 12 months.
Significant changes in the number of employees.
We are a development stage company and as of December 31, 2009, we did not have any employees, other than Kyle Edwards, our President and Chief Executive Officer. We look to our officers and directors who collectively have a varied background in law enforcement, security, internet security and technology, loss prevention, background screening, private investigations, due diligence, customer service evaluations, and regulatory compliance. We do not anticipate hiring employees before the consummation of the Guardian 8 merger. We intend to use the services of consultants to perform various professional services. We believe that this use of third-party service providers may enhance our ability to contain general and administrative expenses.
Employment Agreement
Kyle Edwards. On October 10, 2008, we executed an employment agreement with our President and CEO, Kyle Edwards, wherein Mr. Edwards agreed to serve as the Company’s Chief Operating Officer to supervise and control all of the business and affairs of the Company. This agreement was terminated in June of 2010 through the issuance of 500,000 shares of restricted common stock to Mr. Edwards. In addition, we assigned all accounts receivable and bank balances to Mr. Edwards as additional consideration for cancellation of the employment agreement.
Liquidity and Capital Resources
Since inception, we have financed our cash flow requirements through issuance of common stock.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Page
Independent Auditor’s Report for December 31, 2009
Report of Independent Registered Public Accounting Firm for December 31, 2008
Balance Sheets at December 31, 2009 and 2008
Statements of Operations for the Years Ended December 31, 2009 and 2008 and for the period from May 2, 2007 (Inception) through December 31, 2009
Statements of Stockholders’ (Deficit) for the Year Ended December 31, 2009 and 2008 and for the period from May 2, 2007 (Inception) through December 31, 2009
Statements of Cash Flows for the Year Ended December 31, 2009 and 2008 and for the period from May 2, 2007 (Inception) through December 31, 2009
Notes to Financial Statements
INDEPENDENT AUDITOR’S REPORT
Board of Directors
Global Risk Management & Investigative Solutions
We have audited the accompanying balance sheet of Global Risk Management & Investigative Solutions (“the Company”) as of December 31, 2009, and the related statements of operations, changes in stockholders’ deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
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. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Global Risk Management & Investigative Solutions as of December 31, 2009, and the results of its operations and its cash flows for the year then ended are in conformity with accounting principles generally accepted in the United States of America.
/s/ Weaver & Martin
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Global Risk Management & Investigative Solutions
We have audited the accompanying balance sheet of Global Risk Management & Investigative Solutions (a Development Stage Company) as of December 31, 2008, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2008 and for the periods from May 2, 2007 (inception) through December 31, 2008. The Company’s management is responsible for these financial statements . 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 Global Risk Management & Investigative Solutions as of December 31, 2008, and the results of its operations and cash flows for the year ended December 31, 2008 and for the periods from May 2, 2007 (inception) through December 31, 2008 in conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is in the development stage and has incurred a net loss from operations since inception, all of which raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ L.L. Bradford & Company, LLC
L.L. Bradford & Company, LLC
April 14, 2009
Las Vegas, Nevada
Global Risk Management & Investigative Solutions (a Development Stage Company) Balance Sheets
The accompanying notes are an integral part of the financial statements.
Global Risk Management & Investigative Solutions (a Development Stage Company) Statements of Operations
The accompanying notes are an integral part of the financial statements.
Global Risk Management & Investigative Solutions (a Development Stage Company) Statements of Changes in Stockholders’ (Deficit)
The accompanying notes are an integral part of the financial statements.
Global Risk Management & Investigative Solutions (a Development Stage Company) Statements of Cash Flows
The accompanying notes are an integral part of the financial statements.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Accounting Policies
Nature of business
We were incorporated in the State of Nevada on May 2, 2007 as Global Risk Management & Investigative Solutions. The Company provides a single source for risk management and security solutions and provides investigative, technical IT, background, document verification, and data banks of security information to a wide range of clients.
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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair value of financial instruments
At December 31, 2008, our financial instruments consist of cash, accounts receivable and accounts payable. Interest rates currently available to us for long-term debt with similar terms and remaining maturities are used to estimate fair value of such financial instruments. Accordingly, since interest rates on substantially all of our debt are variable, market based rates, the carrying amounts are a reasonable estimate of fair value.
Revenue recognition
We recognizes revenue as services are performed. Amounts billed and collected before services are performed are included in deferred revenue.
Cash and cash equivalents
We maintain cash balances in interest and non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
Concentration of Credit Risk
We provide services to various customers in the same geographical region. We continually evaluate the creditworthiness of our customers. We evaluate the collectibility of accounts receivable on a combination of factors. Our policies require us to record specific reserve if we become aware of anything that would cause us to question a specific customer’s inability to meet their financial obligations to us. We will record a specific reserve for bad debts to reduce a related receivable when we believe an amount is not collectible. We do not have any reserves for bad debt at December 31, 2009.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
Research & Development
We charge expenditures relating to research and development and improvements to expense as incurred. During the years ended December 31, 2008 and 2009, $0 has been recorded to expenses.
Income Taxes
We account for income taxes in accordance with ASC Topic 740, "Accounting for Income Taxes” (as amended). Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
We classify tax-related penalties and net interest as income tax expense. As of December 31, 2009 and 2008, no income tax expense has been incurred.
Earnings per share
Earnings per share is provided in accordance with ASC Topic 260 “Earnings Per Share”(as amended). Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Basic earnings per common share are based on the weighted average number of common shares outstanding during the year. Diluted earnings per share is based on the weighted average number of common shares, plus all stock options and warrants convertible into common stock.
Stock-Based Compensation
We account for stock-based compensation under ACS Topic 505-50. These standards define a fair value based method of accounting for stock-based compensation. The cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount that must be paid to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. During the years ended December 31, 2009 and 2008, the Company recognized stock based compensation expense of $93,750 and $25,903 from the granting of a common stock.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Adopted During the Year Ended December 31, 2009
In December 2009, the FASB issued ASU 2009-17 for Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. The Board's objective in issuing this Statement is to improve financial reporting by enterprises involved with variable interest entities. The Board undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FASB Statement 166, Accounting for Transfers of Financial Assets, and (2) constituent concerns about the application of Certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise's involvement in a variable interest entity. This Statement shall be effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. We do not anticipate the adoption of these changes will have an impact on the Company’s financial statements.
On October 31, 2009, the Company adopted FASB ASC 105 -- Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification (“the Codification”), as the single official source of authoritative, nongovernmental, U.S. GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right, as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. The Codification is designed to simplify U.S. GAAP into a single, topically ordered structure. All guidance contained in the Codification carries an equal level of authority. The Codification is effective for interim and annual periods ending after September 15, 2009. Accordingly, the Company refers to the Codification in respect of the appropriate accounting standards throughout this document as “FASB ASC”. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Company’s financial statements.
In October 2009, the FASB issued ASU 2009-13 for changes to multiple-deliverable revenue arrangements a consensus of the FASB emerging issues task force, which amends ASC topic 605, Revenue Recognition, to require companies to allocate revenue in multiple-element arrangements based on an element’s estimated selling price if vendor-specific or other third-party evidence of value is not available. ASU 2009-13 is effective for us on November 1, 2010. Earlier application is permitted. We do not anticipate the adoption of these changes will have an impact on the Company’s financial statements.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Adopted During the Year Ended December 31, 2009, Continued
In August 2009, the FASB issued Accounting Standards Update (ASU) 2009-05 for changes to measuring liabilities at fair value. These changes clarify existing guidance that in circumstances in which a quoted price in an active market for the identical liability is not available, an entity is required to measure fair value using either a valuation technique that uses a quoted price of either a similar liability or a quoted price of an identical or similar liability when traded as an asset, or another valuation technique that is consistent with the principles of fair value measurements, such as an income approach (e.g., present value technique). This guidance also states that both a quoted price in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. These changes become effective for the Company on November 1, 2009. The Company does not anticipate the adoption of these changes will have an impact on the Company’s financial statements.
On July 31, 2009, the Company adopted the changes issued by FASB ASC topic 855 to subsequent events. ASC 855 establishes authoritative accounting and disclosure guidance for recognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. ASC 855 also requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The adoption of the changes to ASC 855 had no impact on the Company’s financial statements.
On July 31, 2009, the Company adopted the changes issued by FASB ASC topic 825 on determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. ASC 825 provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased and includes guidance for identifying circumstances that indicate a transaction is not orderly. This guidance is necessary to maintain the overall objective of fair value measurements, which is that fair value which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The adoption of the changes to ASC 825 had no impact on the Company’s financial statements.
On July 31, 2009, the Company adopted the changes issued by the FASB to recognition and presentation of other-than-temporary impairments. These changes amend existing other-than-temporary impairment guidance for debt securities to make the guidance operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities. The adoption of these changes had no impact on the Company’s financial statements.
On July 31, 2009, the Company adopted the changes issued by the FASB for interim disclosures about fair value of financial instruments. These changes require a publicly traded company to include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for interim reporting periods. Such disclosures include the fair value of all financial instruments, for which it is practicable to estimate that value, whether recognized or not recognized in the statement of financial position; the related carrying amount of these financial instruments; and the method(s) and significant assumptions used to estimate the fair value. Other than the required disclosures, the adoption of these changes had no impact on the Company’s financial statements.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Adopted During the Year Ended December 31, 2009, Continued
In June 2009, the FASB issued ASC topic 860-20 for changes to the accounting for transfers of financial assets. These changes remove the concept of a qualifying special-purpose entity and remove the exception from the application of variable interest accounting to variable interest entities that are qualifying special-purpose entities; limits the circumstances in which a transferor derecognizes a portion or component of a financial asset; defines a participating interest; requires a transferor to recognize and initially measure at fair value all assets obtained and liabilities incurred as a result of a transfer accounted for as a sale; and requires enhanced disclosure; among others. These changes become effective for the Company on February 1, 2010. The adoption of these changes is not expected to have an impact on our financial statements.
In June 2009, the FASB issued changes to the accounting for variable interest entities. These changes require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; to add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. This Statement shall be effective for the Company on February 1, 2010. Earlier application is prohibited. The Company does not anticipate any significant financial impact from adoption of this accounting pronouncement.
On June 30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-01 (Topic 105) - Generally Accepted Accounting Principles - amendments based on - Statement of Financial Accounting Standards No. 168 - The FASB Accounting and Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Beginning with this Statement the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standard Updates. This ASU includes FASB Statement No. 168 in its entirety. While ASU’s will not be considered authoritative in their own right, they will serve to update the Codification, provide the bases for conclusions and changes in the Codification, and provide background information about the guidance. The Codification modifies the GAAP hierarchy to include only two levels of GAAP: authoritative and non-authoritative. ASU No. 2009-01 is effective for financial statements issued for the interim and annual periods ending after September 15, 2009, and the Company does not expect any significant financial impact upon adoption.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Adopted During the Year Ended December 31, 2009, Continued
In May 2009, the FASB issued FASB ASC 855, “Subsequent Events”. This Statement addresses accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. FASB ASC 855 requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, the date issued or date available to be issued. The Company adopted this Statement in the fourth quarter of 2009.
In April 2009, the FASB issued an update to FASB ASC 805, “Business Combinations”, that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies. This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination. The Company adopted this Statement on August 1, 2009. Implementation of this update to FASB ASC 805 did not have any impact on the Company’s financial statements.
In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4;”), to address challenges in estimating fair value when the volume and level of activity for an asset or liability have significantly decreased. This FSP emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. This FSP is effective for interim and annual reporting periods ending after June 15, 2009. The Company adopted this Statement on August 1, 2009. Implementation of this Standard did not have any impact on the Company’s financial statements.
On February 1, 2009, the Company adopted changes issued by the FASB to the fair value option for financial assets and liabilities. These changes permit measurement of certain financial assets and financial liabilities at fair value. If the fair value option is elected, the unrealized gains and losses are reported in earnings at each reporting date. Generally, the fair value option may be elected on an instrument-by-instrument basis, as long as it is applied to the instrument in its entirety. The fair value option election is irrevocable, unless a new election date occurs. The adoption of these changes had no material impact on the Company’s financial statements, as we did not elect the fair value option for any of the Company’s financial assets or liabilities.
On February 1, 2009, the Company adopted the changes issued by FASB ASC topic 805 for business combinations. These changes require an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired business at the acquisition date, measured at their fair values as of that date, with limited exceptions. This statement also requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well as the non-controlling interest in the acquired business, at the full amounts of their fair values. ASC 805 makes various other amendments to authoritative literature intended to provide additional guidance or to confirm the guidance in that literature to that provided in this statement. Our adoption of the changes to ASC 805 had no impact on the Company’s financial statements. However, we expect the changes to ASC 805 will have an impact on our accounting for future business combinations, but the effect is dependent upon making acquisitions in the future.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Adopted During the Year Ended December 31, 2009, Continued
On February 1, 2009, the Company adopted the changes issued by FASB ASC topic 810-10 for non-controlling interests in consolidated financial statements. ASC 810-10 states that accounting and reporting for minority interests are to be re-characterized as non-controlling interests and classified as a component of equity. The calculation of earnings per share continues to be based on income amounts attributable to the parent. ASC 810-10 applies to all entities that prepare consolidated financial statements, except not-for-profit organizations, but affects only those entities that have an outstanding non-controlling interest in one or more subsidiaries or that deconsolidate a subsidiary. Our adoption of the changes to ASC 810-10 had no impact on the Company’s financial statements.
On February 1, 2009, the Company adopted the changes issued by FASB ASC topic 815-10-50 for disclosures about derivative instruments and hedging activities. ASC 815-10-50 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Our adoption of the changes to ASC 815-10-50 did not have an impact on our current or comparative consolidated financial statements.
On February 1, 2009, the Company adopted changes issued by the FASB to accounting for intangible assets. These changes amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset in order to improve the consistency between the useful life of a recognized intangible asset outside of a business combination and the period of expected cash flows used to measure the fair value of an intangible asset in a business combination. The adoption of these changes had no impact on the Company’s financial statements.
On February 1, 2009, the Company adopted the changes issued by the FASB to the hierarchy of generally accepted accounting principles. These changes identify the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. Adoption of these changes had no impact on the Company’s financial statements.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Adopted During the Year Ended December 31, 2009, Continued
On February 1, 2009, the Company adopted the changes issued by the FASB on accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement). These changes specify that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The adoption of these changes had no impact on the Company’s results of operations or financial position.
On February 1, 2009, the Company adopted the changes issued by the FASB to whether an instrument (or embedded feature) is indexed to an entity’s own stock. These changes provide a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for scope exception. The adoption of these changes did not have an impact on the Company’s financial statements.
On February 1, 2009, the Company adopted the changes issued by the FASB to determine whether instruments granted in share-based payment transactions are participating securities. These changes address the question of whether instruments granted in share-based payment transactions are participating securities prior to vesting. This guidance indicates that unvested share-based payment awards that contain rights to dividend payments should be included in earnings per share calculations. The adoption of these changes had no impact on the Company’s results of operations or financial position.
On February 1, 2009, the Company adopted the changes issued by the FASB to equity method investment accounting considerations. These changes clarify the accounting for certain transactions and impairment considerations involving equity method investments. The intent of these changes is to provide guidance on (i) determining the initial carrying value of an equity method investment, (ii) performing an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment, (iii) accounting for an equity method investee’s issuance of shares, and (iv) accounting for a change in an investment from the equity method to the cost method. The adoption of these changes had no impact on our current or prior consolidated financial position or results of operations.
On February 1, 2009, the Company adopted the changes issued by the FASB to disclosures by public entities (enterprises) about transfers of financial assets and interest in variable interest entities. These changes require additional disclosure about transfers of financial assets and an enterprise’s involvement with variable interest entities. The adoption of these changes did not have an impact on the Company’s financial statements.
On February 1, 2009, the Company adopted the changes issued by the FASB to employers’ disclosures about pensions and other postretirement benefits. These changes require enhanced disclosures about the plans for assets of a Company’s defined benefit pension and other postretirement plans. The enhanced disclosures are intended to provide users of financial statements with a greater understanding of: (1) how investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used to measure the fair value of plan assets; (4) the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5) significant concentrations of risk within plan assets. The adoption of these changes did not have an impact on the Company’s financial statements.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Updates (“ASU’s”)
March 2010
Update No. 2010-11-Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. This Update provides amendments to Subtopic 815-15, Derivatives and Hedging-Embedded Derivatives, as follows: 1) Subtopic 815-15 is amended to clarify the scope exception under paragraphs 815-15-15-8 through 15-9 for embedded credit derivative features related to the transfer of credit risk in the form of subordination of one financial instrument to another. The amendments address how to determine which embedded credit derivative features, including those in collateralized debt obligations and synthetic collateralized debt obligations, are considered to be embedded derivatives that should not be analyzed under Section 815-15-25 for potential bifurcation and separate accounting. 2) The embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to the application of Section 815-15-25. Thus, only the embedded credit derivative feature between the financial instruments created by subordination is not subject to the application of Section 815-15-25 and should not be analyzed under that Section for potential bifurcation from the host contract and separate accounting as a derivative. 3) Other embedded credit derivative features, including those in some collateralized debt obligations and synthetic collateralized debt obligations, are considered embedded derivatives subject to the application of Section 815-15-25, provided that the overall contract is not a derivative in its entirety under Section 815-10-15. 4) The economic characteristics and risks of an embedded credit derivative feature that is in a beneficial interest in a securitized financial asset and that exposes the holder of an interest in a tranche of that securitized financial instrument to the possibility (however remote) of being required to make potential future payments (not merely receive reduced cash inflows) should be considered to be not clearly and closely related to the economic characteristics and risks of the host contract and thus to meet the criterion in paragraph 815-15-25-1(a). 5) In initially adopting the amendments in this Update, an entity may elect the fair value option for any investment in a beneficial interest in a securitized financial asset; that is, the entity may irrevocably elect to measure that investment in its entirety at fair value (with changes in fair value recognized in earnings). The election of the fair value option should be determined on an instrument-by-instrument basis at the beginning of the fiscal quarter of initial adoption. An entity must ensure that an impairment analysis of the investment has been performed before the initial adoption of the amendments in this Update.
February 2010
Update No. 2010-10-Consolidation (Topic 810): Amendments for Certain Investment Funds. The amendments to the consolidation requirements of Topic 810 resulting from the issuance of Statement 167 are deferred for a reporting entity's interest in an entity (1) that has all the attributes of an investment company or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies. The deferral does not apply in situations in which a reporting entity has the explicit or implicit obligation to fund losses of an entity that could potentially be significant to the entity. The deferral also does not apply to interests in securitization entities, asset-backed financing entities, or entities formerly considered qualifying special purpose entities. In addition, the deferral applies to a reporting entity's interest in an entity that is required to comply or operate in accordance with requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. An entity that qualifies for the deferral will continue to be assessed under the overall guidance on the consolidation of variable interest entities in Subtopic 810-10 or other applicable consolidation guidance, such as the guidance for the consolidation of partnerships in Subtopic 810-20. The amendments in this Update also clarify that for entities that do not qualify for the deferral, related parties should be considered when evaluating each of the criteria in paragraph 810-10-55-37, as amended by Statement 167, for determining whether a decision maker or service provider fee represents a variable interest. In addition, the requirements for evaluating whether a decision maker's or service provider's fee is a variable interest are modified to clarify the Board's intention that a quantitative calculation should not be the sole basis for this evaluation.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
New Accounting Standards Updates (“ASU’s”), Continued
Update No. 2010-09-Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements. The amendments remove the requirement for an SEC filer to disclose a date in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. Additionally, the Board has clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were issued or available to be issued. Those amendments remove potential conflicts with the SEC's literature. All of the amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010.
January 2010
Update No. 2010-06-Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. Overall Subtopic (Subtopic 820-10) of the FASB Accounting Standards Codification™, originally issued as FASB Statement No. 157, Fair Value Measurements, is issued to provide updated guidance on disclosures of fair value measurements and increased financial reporting transparency. This Update provides amendments to Subtopic 820-10 that requires new disclosures to the following: 1. Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2. Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements. In addition, this Update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows: 1. Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2. Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.
Update No. 2010-05 Compensation - Stock Compensation (Topic 718): Escrowed Share Arrangements and the Presumption of Compensation. This update codifies EITF Topic D-110, with the addition of paragraph 718-10-S99-2.
Update No. 2010-02-Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary-a Scope Clarification The objective of this Update is to address implementation issues related to the changes in ownership provisions in the Consolidation-Overall Subtopic (Subtopic 810-10) of the FASB Accounting Standards Codification ™, originally issued as FASB Statement No. 160, Non-controlling Interests in Consolidated Financial Statements. Subtopic 810-10 establishes the accounting and reporting guidance for non-controlling interests and changes in ownership interests of a subsidiary. An entity is required to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary at fair value. The gain or loss includes any gain or loss associated with the difference between the fair value of the retained investment in the subsidiary and its carrying amount at the date the subsidiary is deconsolidated. In contrast, an entity is required to account for a decrease in its ownership interest of a subsidiary that does not result in a change of control of the subsidiary as an equity transaction.
Previous year financial information has been presented to conform to current year financial statement presentation.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
Year-end
The Company has adopted December 31 as its fiscal year end.
Note 2 - Going concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a net loss of approximately $456,236 for the period ended December 31, 2009.
These conditions give rise to doubt about the Company’s ability to continue as a going concern. These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock as may be required and ultimately to attain profitability.
Management’s plan, in this regard, is to seek potential strategic partners or raise financing of approximately $500,000 through a combination of equity and debt financing. Management believes this amount will be sufficient to finance the continuing development for the next twelve months. However, there is no assurance that the Company will be successful in any of its efforts.
Note 3 - Income taxes
The Company accounts for income taxes in accordance with ASC Topic 740, "Accounting for Income Taxes” (as amended). Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The provision for income taxes consists of the following:
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
Note 3 - Income taxes, continued
Below is a summary of deferred tax asset calculations on net operating loss carry forward amounts as of December 31, 2009 and 2008. Currently there is no reasonable assurance that the Company will be able to take advantage of a deferred tax asset. Thus, an offsetting allowance has been established for the deferred asset. Furthermore, the Company has determined that prior net operating loss carryforwards were nullified with the Company’s change in business plan.
During the twelve months ended December 31, 2009, the valuation allowance increased $76,685.
The Company has the following operating loss carry forwards available at December 31, 2009:
Reconciliation between income taxes at the statutory tax rate (35%) and the actual income tax provision for continuing operations follows:
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
Note 4 - Stockholders’ equity
We are authorized to issue 10,000,000 shares of $0.001 par value preferred stock and 100,000,000 shares of $0.001 par value common stock.
In August 2007, we issued 3,500,000 founders shares for cash in the amount of $35,000.
During 2007, we issued a total of 540,000 shares of our common stock pursuant to subscription agreements for cash totaling $135,000.
In March 2008, we issued 140,500 shares of our common stock pursuant to subscription agreements for cash totaling $35,125.
In September 2008, we issued 103,610 shares of our common stock pursuant to a retainer agreement with our securities counsel. We recorded professional fees in the amount of $25,903 representing the fair value of the shares issued.
On February 3, 2009, we issued 500,000 shares of our common stock to our President and CEO valued at $125,000 in lieu of his initial base annual salary for the period beginning on October 2008 through October of 2009. We have recorded executive compensation of $125,000 for services received through December 31, 2009.
On March 2, 2009, we sold 20,000 shares of our common stock for cash totaling $5,000 to an individual.
Global Risk Management & Investigative Solutions
(a Development Stage Company)
Notes to Financial Statements
Note 5 - Related party transactions
On November 15, 2007, we entered into a “Strategic Alliance Agreement” with our founding shareholders. Pursuant to this agreement we agreed to facilitate a business development program whereby Global Risk Management would accept referrals from each founding member in exchange for a 5% referral fee. Further, in the event the referred services are to be performed by a member of the strategic alliance team, that member will receive approximately 90% of the proceeds received from the referral. During the years ended December 31, 2009 and 2008, we paid referral fees to our founders pursuant to the strategic alliance agreement, totaling $33,789 and $11,577, respectively.
During the year ended December 31, 2009, we entered into an Administrative Rent and Service Agreement with Global Intelligence Network, Inc., which is controlled by a founding shareholder and director of the Company. Pursuant to this agreement, Global Intelligence has agreed to provide office space, administrative staff, supplies and equipment to the Company in exchange for a quarterly service fee of $15,625. The agreement is for a period of one year beginning on April 1, 2009. As of December 31, 2009, we have expensed $46,875.
On February 3, 2009, we issued 500,000 shares of our common stock to our President and CEO valued at $125,000 in lieu of his initial base annual salary for the period beginning on October 2008 through October of 2009.
Note 6 - Subsequent events
On July 30, 2010, we entered into an Agreement and Plan of Merger with G8 Acquisition Subsidiary, Inc., (“GS8”) a Nevada corporation and our wholly-owned subsidiary and Guardian 8 Corporation, a Nevada corporation. Pursuant to the terms of the Merger Agreement, G8S will be merged with and into Guardian 8, with Guardian 8 as the surviving corporation and our new wholly owned subsidiary. At the effective time of the merger each issued and outstanding share of Guardian 8 shall be cancelled and converted into one share of our restricted common stock.
Item 9.
Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure.
On July 27, 2010, the Registrant dismissed L.L. Bradford & Company, LLC as the Registrant’s independent auditor. On July 27, 2010, the Registrant engaged Weaver & Martin, LLC, as their independent accountants for the year ended December 31, 2009. This is a change in accountants recommended and approved by the Registrant’s Executive Management and the Registrant’s Board of Directors. During the most recent two fiscal years and the portion of time preceding the decision to engage Weaver & Martin, LLC, neither the Registrant nor anyone engaged on its behalf has consulted with Weaver & Martin, LLC regarding (i) either the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Registrant’s financial statements; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event.
The audit reports issued by L.L. Bradford & Company, LLC with respect to the Registrant’s financial statements for the fiscal years ended December 31, 2008 and 2007 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles, except that L.L. Bradford & Company, LLC’s report contained an explanatory paragraph regarding substantial doubt about the Registrant’s ability to continue as a going concern. From November of 2007 through the notice date, there were no disagreements between the Registrant and L.L. Bradford & Company, LLC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of L.L. Bradford & Company, LLC would have caused it to make a reference to the subject matter of the disagreement in connection with its audit report.
The change in accountants does not result from any dissatisfaction with the quality of professional services rendered by L.L. Bradford & Company, LLC, as the independent accountants of the Registrant.
Item 9A(T).
Item 9A(T). Controls and Procedures.
Our Chief Executive Officer, Kyle Edwards and Principal Financial Officer, Peter Maheu, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on that evaluation, Messrs. Edwards and Maheu concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings and in ensuring that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as is defined in the Securities Exchange Act of 1934. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and overriding of controls. Consequently, an effective internal control system can only provide reasonable, not absolute, assurance, with respect to reporting financial information.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2009.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Item 9B.
Item 9B. Other Information.
On July 30, 2010, the Registrant entered into an agreement and plan of merger (the “Merger Agreement”) by and among the Registrant, G8 Acquisition Subsidiary, Inc., a Nevada corporation and wholly-owned subsidiary of the Registrant (“G8S”), and Guardian 8 Corporation, a Nevada corporation (“Guardian 8”).
Under the terms of the Merger Agreement, G8S will be merged with and into Guardian 8, with Guardian 8 as the surviving corporation and new wholly owned subsidiary of the Registrant. Pursuant to the Merger Agreement, at the effective time of the merger each issued and outstanding share of Guardian 8 shall be cancelled and converted into one share of the Registrant’s restricted common stock.
The completion of the merger is subject to the satisfaction of several conditions, including the following: (i) the Registrant’s completion of a 1-for-4 reverse stock split; (ii) the Registrant’s completion of the filing of its delinquent 34 Act reports; (iii) the delivery by Guardian 8 of audited financial statements; (iv) approval of the merger by the Registrant’s and Guardian 8’s stockholders; and (v) such other customary conditions with respect to transactions of this type.
The Merger Agreement may be terminated at any time by either Guardian 8 or the Registrant if the merger has not closed on or before September 30, 2010, unless extended by the parties. The parties have agreed to extend the merger agreement until such time as the Registrant has completed the filing of its delinquent public reports.
The Merger Agreement was approved by the unanimous consent of the Registrant’s Board of Directors.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, attached to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 as Exhibit 2.1 and is incorporated into this Item by reference.
About Guardian 8
Guardian 8 Corporation has, through its founder, developed what it believes to be a unique and novel mobile/compact personal security device that may be used to draw attention and discourage attack. The device, known as the “PERSONAL SECURITY GUARDIAN”, will employ several countermeasures to allow a user to ward off an eminent attack, including:
·
Emit an audible alarm and strobe light to frighten an attacker, temporarily impair their vision, and alert others;
·
Ability to link to the user’s personal cell phone using Bluetooth technology to automatically dial 9-1-1 to communicate to police dispatch and transmit your GPS location;
·
Provide an audio and video recording of an incident;
·
Transmit the user’s GPS location;
·
Allow the user to accurately direct pepper-spray upon the attacker with a tracer substance to assist in subsequent identifications;
·
Providing a laser pointer for enhancing aiming accuracy;
·
Transmit a custom message-being attacked, name, age and license plate number and last 30 seconds of ambient audio prior to trigger, also sends video or video frame of attacker;
·
Enable a PTT-push to talk feature to talk with Police Dispatch directly;
·
Repeating audio and video transmission to Police Dispatch and after a certain amount of time defaulting to a communication device to Police Dispatch.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth the names and positions of our executive officers and directors.
Kyle Edwards, President and a Director of Global, is also President of International Investigative Solutions, an investigative company specializing in employment backgrounds, gaming compliance, criminal and internal investigations, as well as providing due diligence and loss prevention expertise. Mr. Edwards has thirty four years of investigative experience. Mr. Edwards is a prior chief law enforcement officer with the Las Vegas Metropolitan Police Department, retiring after twenty six years as a Deputy Chief of Investigations. During his law enforcement career he led thousands of criminal investigations including several hundred homicides as well as other violent crimes and white collar crimes and gaming investigations. In addition he supervised undercover narcotic investigations receiving the departments Meritorious Service Award and the U.S. Attorney General’s Safety Award for an undercover operation culminating in Thailand.
After leaving the Las Vegas Metropolitan Police Department Mr. Edwards joined the MGM MIRAGE as Vice President of Corporate Security and Gaming Surveillance. In that role he developed and refined the companies background investigation process with a staff conducting over 35,000 backgrounds a year.
Julie Hakman, Secretary and a Director of Global, is also President of AmericanChecked, Inc., a nationwide screening company dedicated primarily to Gaming industries. Ms. Hakman created AmericanChecked, Inc. (AC), a certified women-owned business, in 2004. Ms. Hakman has over 25 years experience in business leadership. Her involvement in employee screening began in 1997 when Total Information Services, Inc., (TISI/DAC Services), recruited her for her innovative business development strategies and executive leadership accomplishments. Prior to joining TISI / DAC Services, she was the Director of Sales, Marketing and Operations for a leading national specialty retailer. Ms. Hakman is a graduate of the University of Oklahoma, a national member of SHRM, Women’s Business Council, Committee Co-Chair - National Association of Professional Background Screeners (NAPBS), and has served as a consultant to the Casino Management Association Executive Board, and the National Indian Gaming Association. Julie was honored by the National Indian Gaming Association for outstanding contributions, and has been a featured speaker at numerous HR, Gaming and Education events.
Peter Maheu, Treasurer and Chairman of Global, is also President of Global Intelligence Network, an intelligence and investigations firm specializing in due diligence for regulatory compliance in the gaming industry and other business sectors. Mr. Maheu is a licensed Private Investigator in California and Nevada.
Mr. Maheu has written several articles and lectured to various organizations including the International Association of Gaming Attorneys, World President’s Organization, and the California Association of Licensed Investigators on topics such as compliance, due diligence and complex business fraud. Of special interest is Mr. Maheu's extensive research into the emerging gaming markets abroad, with emphasis on organized crime.
Previously, Mr. Maheu was the President of Trademark Protection Services, a firm specializing in trademark and copyright infringement. The largest firm of its kind in the United States, Trademark Protection Services had over 30 reporting offices nationwide comprised of investigators and attorneys. His clients have included The Hard Rock Cafe, 20th Century Fox, Mirage Studios, and the Walt Disney Company.
Mr. Maheu has had an outstanding career spanning both the casino industry and investigative work. A member of Robert A. Maheu Associates, Peter was instrumental in the management of the extensive gaming interests of Mr. Howard Hughes in Las Vegas as well as Mr. Hughes’ other Nevada investments in real estate and mining.
Mr. Maheu has spoken at the Annual Casino Regulatory Compliance for the past three years. He has also spoken at the International Masters of Gaming Law Conference, the International Association of Gaming Attorneys Conference and the World President’s Association.
Mr. Maheu has taught at the California Department of Justice Advanced Training School on International Organized Crime and the gaming industry and has addressed the same topic at the Under Sheriffs Association of California, as well as the North American Gaming Regulators Association, and the National Indian Gaming Regulators Conference.
Mr. Maheu is a member of the Las Vegas Metropolitan Police Department’s Use of Force Board and is the President of the Nevada Society of Professional Investigators.
Beverly Griffin, is a Director of Global. For the past five years Ms. Griffin has been the President of Griffin Investigations, an exclusive international supplier of surveillance intelligence data providing complete historical database available to gaming establishments. Ms. Griffin is also a licensed private investigator.
Dennis Nelson, a Director of Global, is also the President of Attorney's Process & Investigation Services, Inc. Mr. Nelson received his B.A. in Communications from the University of Wisconsin-Green Bay and founded API Services, Inc. (“API”) in 1975. Under Mr. Nelson’s guidance, API has grown into a comprehensive loss management and investigative service group. Mr. Nelson has considerable experience investigating individuals and organizations connected with the gaming industry and has been involved in the development of nationally recognized regulatory services for tribal governments throughout the United States. Mr. Nelson was the project director and co-author of the study “Indian Gaming and its Impact on Law Enforcement in Wisconsin.” He has served as Compliance Director (Head of Gaming Enforcement) and played an active role in training and development of several tribal governments throughout the United States. Mr. Nelson has been involved in many significant due diligence investigations of gaming companies, vendors, gaming industry consultants, and executives. Mr. Nelson has headed several task force projects resulting in major regulatory actions on behalf of API’s gaming clients. In addition, Mr. Nelson serves as a consultant to many gaming clients on development issues, industry intelligence and business issues.
Michael Pate, is a Director of Global. From 2006 to the present Mr. Pate has been the Chief Technology Officer of AP-ID Incorporated, a company that produced ePAC. ePac, Electronic Patriot Act Compliance, is comprised of sophisticated document scanner and revolutionary software that identifies the form of document, authenticates that the document is valid, and then validates the individuals' status against nations "watch" lists as well as the clients own internal lists, and procedures. From 2001 to 2006, Mr. Pate was the President to Viper Applications, a software development Company.
Michael Spriggs, is a Director of Global. From 1992 to present, Mr. Spriggs has been the Chief Executive Officer and founder of Michael S. Spriggs Security and Investigations, Inc. (now known as Spriggs, Inc.), a private investigations and security firm specializing in high end retail and executive protection.
Limitation of Liability of Directors
Pursuant to the Nevada General Corporation Law, our Articles of Incorporation exclude personal liability for our Directors for monetary damages based upon any violation of their fiduciary duties as Directors, except as to liability for any breach of the duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or any transaction from which a Director receives an improper personal benefit. This exclusion of liability does not limit any right which a Director may have to be indemnified and does not affect any Director’s liability under federal or applicable state securities laws. We have agreed to indemnify our directors against expenses, judgments, and amounts paid in settlement in connection with any claim against a Director if he acted in good faith and in a manner he believed to be in our best interests.
Nevada Anti-Takeover Law and Charter and Bylaw Provisions
Depending on the number of residents in the state of Nevada who own our shares, we could be subject to the provisions of Sections 78.378 et seq. of the Nevada Revised Statutes which, unless otherwise provided in a company’s articles of incorporation or Bylaws, restricts the ability of an acquiring person to obtain a controlling interest of 20% or more of our voting shares. Our articles of incorporation and Bylaws do not contain any provision which would currently keep the change of control restrictions of Section 78.378 from applying to us.
We are subject to the provisions of Sections 78.411 et seq. of the Nevada Revised Statutes. In general, this statute prohibits a publicly held Nevada corporation from engaging in a “combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the combination or the transaction by which the person became an interested stockholder is approved by the corporation’s board of directors before the person becomes an interested stockholder. After the expiration of the three-year period, the corporation may engage in a combination with an interested stockholder under certain circumstances, including if the combination is approved by the board of directors and/or stockholders in a prescribed manner, or if specified requirements are met regarding consideration. The term “combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years did own, 10% or more of the corporation’s voting stock. A Nevada corporation may “opt out” from the application of Section 78.411 et seq. through a provision in its articles of incorporation or Bylaws. We have not “opted out” from the application of this section.
Apart from Nevada law, however, our articles of incorporation and Bylaws do not contain any provisions which are sometimes associated with inhibiting a change of control from occurring (i.e., we do not provide for a staggered board, or for “super-majority” votes on major corporate issues). However, we do have 10,000,000 shares of authorized “blank check” preferred stock, which could be used to inhibit a change in control.
Election of Directors and Officers
Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified.
Involvement in Certain Legal Proceedings
None of our executive officers or directors has been the subject of any Order, Judgment, or Decree of any Court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring suspending or otherwise limiting him from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.
None of our executive officers or directors has been convicted in any criminal proceeding (excluding traffic violations) or is the subject of a criminal proceeding, which is currently pending.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers and directors, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. As a company with securities registered under Section 15(d) of the Exchange Act, our executive officers and directors, and persons who beneficially own more than ten percent of our common stock are not required to file Section 16(a) reports.
Audit Committee and Financial Expert
We do not have an Audit Committee; our Board of Directors during 2009 performed some of the same functions of an Audit Committee, such as: recommending a firm of independent registered public accountants to audit the annual financial statements; reviewing the independent auditors independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. The Company does not currently have a written audit committee charter or similar document.
We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our start-up operations, we believe the services of a financial expert are not warranted.
Code of Business Conduct and Ethics
A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:
(1)
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2)
Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
(3)
Compliance with applicable governmental laws, rules and regulations;
(4)
The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5)
Accountability for adherence to the code.
As of December 31, 2009, we had not adopted a corporate code of ethics that applied to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
Nominating Committee
We do not have a Nominating Committee or Nominating Committee Charter. Our Board of Directors in 2009 performed some of the functions associated with a Nominating Committee. We have elected not to have a Nominating Committee in that we have limited operations and resources.
Compensation Committee
We currently do not have a Compensation Committee of the Board of Directors. Until a formal committee is established our entire Board of Directors will review all forms of compensation provided to our executive officers, directors, consultants and employees including stock compensation.
Item 11.
Item 11. Executive Compensation.
The following table sets forth summary compensation information for the years ended December 31, 2009 and 2008 for our chief executive officer, who we refer to throughout this report as our named executive officer. We did not have any other executive officers whose total compensation exceeded $100,000 during the years ended December 31, 2009 and 2008.
Summary Compensation Table
(1)
(2)
In January 2009, we authorized the issuance of 500,000 shares of our common stock to Mr. Edwards valued at $125,000 in lieu of his initial base annual salary for the period beginning on October 2008 through October of 2009. $31,250 was expensed for the year ended December 31, 2008.
Grants of Plan-Based Awards in Fiscal 2009
We did not grant any plan-based awards to our named executive officer during the fiscal year ended December 31, 2009.
Outstanding Equity Awards at 2009 Fiscal Year-End
We did not have any outstanding equity awards as of December 31, 2009.
Option Exercises for 2009
There were no options issued or exercised by our named executive officer in fiscal 2009.
Executive Employment Agreements
Kyle Edwards:
On October 10, 2008, we executed an employment agreement with our President and CEO, Kyle Edwards, wherein Mr. Edwards agreed to serve as the Company’s Chief Operating Officer to supervise and control all of the business and affairs of the Company. This agreement was terminated in June of 2010 through the issuance of 500,000 shares of restricted common stock to Mr. Edwards. In addition, we assigned all accounts receivable and bank balances to Mr. Edwards as additional consideration for cancellation of the employment agreement.
Director Compensation
None of our directors were compensated for the services during the year ended December 31, 2009. However, all directors will be reimbursed for expenses incurred in attending Board meetings.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table presents information, to the best of Global’s knowledge, about the ownership of Global’s common stock on October 1, 2010 relating to those persons known to beneficially own more than 5% of Global’s capital stock and by Global’s directors and executive officers. The percentage of beneficial ownership for the following table is based on 5,554,110 shares of common stock outstanding.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of common stock over which the shareholder has sole or shared voting or investment power. It also includes shares of common stock that the shareholder has a right to acquire within 60 days after October 1, 2010 pursuant to options, warrants, conversion privileges or other right. The percentage ownership of the outstanding common stock, however, is based on the assumption, expressly required by the rules of the Securities and Exchange Commission, that only the person or entity whose ownership is being reported has converted options or warrants into shares of Global’s common stock.
(1)
As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security).
(2)
Figures are rounded to the nearest tenth of a percent.
(3)
The address of each person is care of Global: 3950 East Patrick Lane, Suite 101, Las Vegas, Nevada 89120.
(4)
250,000 shares are owned by Global Intelligence Network, a company controlled by Mr. Maheu.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Other than as set forth below, we were not a party to any transactions or series of similar transactions that have occurred during fiscal 2009 in which:
•
The amounts involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years ($367); and
•
A director, executive officer, holder of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest.
During the year ended December 31, 2009, we entered into an Administrative Rent and Service Agreement with Global Intelligence Network, Inc., which is controlled by Peter Maheu, a founding shareholder and director of the Company. Pursuant to this agreement, Global Intelligence has agreed to provide office space, administrative staff, supplies and equipment to the Company in exchange for a quarterly service fee of $15,625. The agreement is for a period of one year beginning on April 1, 2009. As of December 31, 2009, we have expensed $46,875.
During the year ended December 31, 2009, we paid referral and investigative fees to our founders totaling approximately $33,789.
Director Independence
Our board of directors currently consists of seven members. Our board of directors has affirmatively determined that Ms. Griffin and Messrs. Nelson, Pate and Spriggs are independent directors, as defined by Section 803 of the American Stock Exchange Company Guide.
Item 14.
Item 14. Principal Accounting Fees and Services.
Weaver and Martin, LLC and L.L. Bradford & Company, LLC served as our principal independent public accountants for fiscal 2009 and 2008, respectively. Aggregate fees billed to us for the fiscal years ended December 31, 2009 and 2008 by Weaver and Martin, LLC and L.L. Bradford & Company, LLC were as follows:
(1)
Audit Fees include fees billed and expected to be billed for services performed to comply with Generally Accepted Auditing Standards (GAAS), including the reviews of the quarterly financial statements included in the Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. This category also includes fees for audits provided in connection with statutory filings or procedures related to audit of income tax provisions and related reserves, consents and assistance with and review of documents filed with the SEC.
(2)
Audit-Related Fees include fees for services associated with assurance and reasonably related to the performance of the audit or review of our financial statements. This category includes fees related to assistance in financial due diligence related to mergers and acquisitions, consultations regarding Generally Accepted Accounting Principles, reviews and evaluations of the impact of new regulatory pronouncements, general assistance with implementation of Sarbanes-Oxley Act of 2002 requirements and audit services not required by statute or regulation.
(3)
Tax fees consist of fees related to the preparation and review of our federal and state income tax returns.
(5) Audit Committee Policies and Procedures
Our Board of Directors pre-approves all services to be provided to us by our independent auditor. This process involves obtaining (i) a written description of the proposed services, (ii) the confirmation of our Principal Financial Officer that the services are compatible with maintaining specific principles relating to independence, and (iii) confirmation from our securities counsel that the services are not among those that our independent auditors have been prohibited from performing under SEC rules. The members of the Board of Directors then make a determination to approve or disapprove the engagement of Weaver and Martin, LLC or L.L. Bradford & Company for the proposed services. In fiscal 2009 and 2008, all fees paid to Weaver and Martin, LLC and L.L. Bradford & Company were unanimously pre-approved in accordance with this procedure.
(6) Less than 50 percent of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
The following information required under this item is filed as part of this report:
(a) 1. Financial Statements
Page
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements of Stockholders’ (Deficit)
Statements of Cash Flows
(b) 2. Financial Statement Schedules
None.
(c) 3. Exhibit Index
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities and on the dates indicated have signed this report below.
Name
Title
Date
/s/ Kyle Edwards
Kyle Edwards
Chief Executive Officer, President & Director (Principal Executive Officer)
November 24, 2010
/s/ Peter Maheu
Treasurer (Principal Financial Officer)
November 24, 2010
Peter Maheu
& Chairman
/s/ Julie Hakman
Julie Hakman
Secretary & Director
November 24, 2010
/s/ Beverly Griffin
Beverly Griffin
Director
November 24, 2010
/s/ Dennis Nelson
Director
November 24, 2010
Dennis Nelson
/s/ Michael Pate
Michael Pate
Director
November 24, 2010
/s/ Michael Spriggs
Michael Spriggs
Director
November 24, 2010