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EX-31.1 - SECTION 302 CERTIFICATION - Gold & Gemstone Mining Inc.exhibit31-1.htm
EX-32.1 - SECTION 906 CERTIFICATION - Gold & Gemstone Mining Inc.exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2011

or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number 333-165929

GLOBAL GSM SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)

Nevada 98-0642269
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
   
     204 West Spear Street, Carson City, Nevada      89703
(Address of principal executive offices) (Zip Code)

(775) 636-6986
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] YES    [   ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] YES     [    ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]   Accelerated filer [   ]
Non-accelerated filer [   ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
[X] YES    [   ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[   ] YES     [   ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
7,350,000 common shares issued and outstanding as of November 30, 2011.


GLOBAL GSM SOLUTIONS, INC.

Form 10-Q

PART 1 – FINANCIAL INFORMATION 3
     
Item 1. Financial Statements 3
     
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
     
Item 4. Controls and Procedures 10
     
PART II – OTHER INFORMATION 10
     
Item 1. Legal Proceedings 10
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11
     
Item 3. Defaults Upon Senior Securities 11
     
Item 4. [Removed and Reserved] 11
     
Item 5. Other Information 11
     
Item 6. Exhibits 12
     
SIGNATURES 13

2


PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

3


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)

TABLE OF CONTENTS

October 31, 2011

Balance Sheet (Unaudited) as of October 31, 2011 and January 31, 2011 F-1
   
Statements of Operations (Unaudited) for the three months and nine months ended October 31, 2011 and 2010 and the period from March 5, 2008 (Date of Inception) to October 31, 2011 F-1
   
Statement of Stockholders’ Equity (Deficit) (Unaudited) as of October 31, 2011 F-3
   
Statement of Cash Flows (Unaudited) for the nine months ended October 31, 2011 and 2010 and the period from March 5, 2008 (Date of Inception) to October 31, 2011 F-4
   
Notes to the Financial Statements F-5 – F-8

4


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS (UNAUDITED)
OCTOBER 31, 2011 and JANUARY 31, 2011

    October 31,     January 31,  
    2011     2011  
ASSETS  
Current assets            
       Cash and cash equivalents $  0   $  8,042  
       Prepaid expenses   0     7,700  
             
TOTAL ASSETS $  0   $  15,742  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  
Liabilities            
Current Liabilities            
       Accrued expenses $  6,704   $  4,750  
       Due to related party   0     3,840  
Total Liabilities   6,704     8,590  
             
Stockholders’ Equity (Deficit)            
       Common stock, $0.001 par value, 75,000,000 shares authorized, 7,350,000 
       shares issued and outstanding
  7,350     7,350  
       Paid in capital   29,490     25,650  
       Deficit accumulated during the development stage   (43,544 )   (25,848 )
Total Stockholders’ Equity (Deficit)   (6,704 )   7,152  
             
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $  0   $  15,742  

See accompanying notes to financial statements.

F-1


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS AND NINE MONTHS ENDED OCTOBER 31, 2011 AND 2010
FOR THE PERIOD FROM MARCH 5, 2008 (INCEPTION) TO OCTOBER 31, 2011

                            Period from  
    Three     Three     Nine     Nine     March 5,  
    Months     Months     Months     Months     2008  
    Ended     Ended     Ended     Ended     (Inception) to  
    October 31,     October 31,     October 31,     October 31,     October 31,  
    2011     2010     2011     2010     2011  
                               
REVENUES $  0   $  0   $  0   $  0   $  0  
                               
OPERATING EXPENSES                              
         Incorporation costs   0     0     0     0     840  
         Professional fees   1,716     3,831     4,287     6,317     23,457  
         Transfer agent expense   4,916     0     10,116     0     14,196  
         General and administrative   973     0     3,293     0     5,051  
TOTAL OPERATING EXPENSES   7,605     3,831     17,696     6,317     43,544  
                               
NET LOSS BEFORE INCOME TAXES   (7,605 )   (3,831 )   (17,696 )   (6,317 )   (43,544 )
                               
PROVISION FOR INCOME TAXES   0     0     0     0     0  
                               
NET LOSS $  (7,605 ) $  (3,831 ) $  (17,696 ) $  (6,317 ) $  (43,544 )
                               
NET LOSS PER SHARE: BASIC AND DILUTED $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.00 )    
                               
WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED   7,350,000     6,614,456     7,350,000     6,207,070      

See accompanying notes to financial statements.

F-2


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)
FOR THE PERIOD FROM MARCH 5, 2008 (INCEPTION) TO OCTOBER 31, 2011

                      Deficit        
                      accumulated        
                Additional paid     during the        
    Common stock     in     development        
    Shares     Amount     capital     stage     Total  
Inception, March 5, 2008   -   $  -   $  -   $  -   $  -  
Net loss for the period from March 5, 2008 (inception) to January 31, 2009   -     -     -     (840 )   (840 )
Balance, January 31, 2009   -     -     -     (840 )   (840 )
Shares issued at $0.001 per share for cash   6,000,000     6,000     -     -     6,000  
Net loss for the fiscal year ended January 31, 2010   -     -     -     (4,900 )   (4,900 )
Balance, January 31, 2010   6,000,000     6,000     -     (5,740 )   260  
Shares issued at $0.02 per share for cash   1,350,000     1,350     25,650     -     27,000  
Net loss for the fiscal year ended January 31, 2011   -     -     -     (20,108 )   (20,108 )
Balance, January 31, 2011   7,350,000     7,350     25,650     (25,848 )   7,152  
Forgiveness of related party debt   -     -     3,840     -     3,840  
Net loss for the period ended October 31, 2011   -     -     -     (17,696 )   (17,696 )
Balance, October 31, 2011   7,350,000   $  7,350   $  29,490   $  (43,544 ) $  (6,704 )

See accompanying notes to financial statements.

F-3


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED OCTOBER 31, 2011 AND 2010
FOR THE PERIOD FROM MARCH 5, 2008 (INCEPTION) TO OCTOBER 31, 2011

                Period from  
    Nine Months     Nine Months     March 5, 2008  
    Ended     Ended     (Inception) to  
    October 31,     October 31,     October 31,  
    2011     2010     2011  
CASH FLOWS FROM OPERATING ACTIVITIES                  
         Net loss for the period $  (17,696 ) $  (6,317 ) $  (43,544 )
Change in non-cash working capital items:                  
Changes in assets and liabilities:                  
       (Increase) decrease in prepaid expenses   7,700     0     0  
         Increase (decrease) in accrued expenses   1,954     (3,875 )   6,704  
CASH FLOWS USED IN OPERATING ACTIVITIES   (8,042 )   (10,192 )   (36,840 )
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
         Proceeds from due to related party loan   0     500     3,840  
         Proceeds from sale of common stock   0     25,000     33,000  
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES   0     25,500     36,840  
                   
NET INCREASE (DECREASE) IN CASH   (8,042 )   15,308     0  
Cash, beginning of period   8,042     6,000     0  
Cash, end of period $  0   $  21,308   $  0  
                   
SUPPLEMENTAL CASH FLOW INFORMATION:            
         Interest paid $  0   $  0   $  0  
         Income taxes paid $  0   $  0   $  0  

See accompanying notes to financial statements.

F-4


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business
Global GSM Solutions, Inc. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on March 5, 2008. The Company was formed to develop, manufacture, and distribute products and services to the gaming and vending industry that allows remote monitoring of amusement and vending devices. Our product is intended to improve security, productivity, and profitability of devices such as arcade games, toy dispensing machines, redemption games and vending machines.

Development Stage Company
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Accounting Basis
The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

The Company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At October 31, 2011 the Company's bank deposit did not exceed the insured amounts.

Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, accrued expenses and loans payable to a related party. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

F-5


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0 as of October 31, 2011and October 31, 2010.

Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of October 31, 2011.

Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock option plan and has not granted any stock options. As of October 31, 2011, the Company has not issued any stock-based payments to its employees.

Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

F-6


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2011

NOTE 2 – GOING CONCERN

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $43,544 as of October 31, 2011and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.

NOTE 3 – DUE TO RELATED PARTY

An officer loaned $840 to the Company on March 5, 2008 and an additional $3,000 during the year ended January 31, 2011. These amounts are due on demand, non-interest bearing and unsecured. During the period ended October 31, 2011, the party forgave the debt in full, which recorded as an increase to additional paid in capital.

NOTE 4 – COMMON STOCK

The Company has 75,000,000 common shares authorized with a par value of $ 0.001 per share.

On January 19, 2010, the Company issued 6,000,000 shares of its common stock at $0.001 per share for total proceeds of $6,000.

For the period from August 27, 2010, to November 1, 2010 the Company issued 1,350,000 shares of its common stock at $0.02 per share for total proceeds of $27,000

Total shares outstanding as of October 31, 2011were 7,350,000.

F-7


GLOBAL GSM SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2011

NOTE 5 – INCOME TAXES

As of October 31, 2011, the Company had net operating loss carry forwards of approximately $43,544 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision for the Federal income tax consists of the following:

    October 31,     October 31,  
    2011     2010  
Federal income tax attributable to:            
     Current Operations $  6,015   $  2,150  
     Less: valuation allowance   (6,015 )   (2,150 )
Net provision for Corporation income taxes $  0   $  0  

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

    October 31,  
    2011  
Deferred tax asset attributable to:      
     Net operating loss carryover $  14,805  
     Less: valuation allowance   (14,805 )
Net deferred tax asset $  0  

NOTE 6 – COMMITMENTS

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

NOTE 7 – SUBSEQUENT EVENTS

Management has evaluated subsequent events from October 31, 2011 to November 28, 2011, the date these financial statements were issued, and has determined it does not have any material subsequent events to disclose.

F-8


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

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean Global GSM Solutions, Inc., unless otherwise indicated.

General Overview

Global GSM Solutions Inc. was incorporated in the State of Nevada as a for-profit company on March 5, 2008 and established a fiscal year end of January 31. We do not have revenues, have minimal assets and have incurred losses since inception. We are a development-stage company formed to develop, manufacture, and distribute our product and services to the gaming and vending industry that allows remote monitoring of amusement and vending devices. Our product is intended to improve security, productivity, and profitability of devices such as arcade games, toy dispensing machines, redemption games and vending machines. To date, we have had limited operations. We have developed our business plan, and executed contract with XTEK, where we engage XTEK as an independent contractor for the specific purpose of developing a specialized Website and manufacture and supply GSM Devices for us.

GSM Device

GSM (Global System for Mobile Communications) is the most popular standard for mobile telephony systems in the world. Our GSM device is a hybrid of a wireless GSM modem and a proprietary electronic device capable of communicating and interpreting data coming from amusement or vending machine to the modem. The GSM device commutates to the vending/amusement machine, analyses the received data and communicates it to the GSM modem part of the device. The GSM modem, using existing wireless networks (the same networks that any cellular phone uses to transmit data), sends interpreted data in set intervals to the central server (website), where it is displayed in a form of useful information and charts (revenues, service interruptions, top earners, inventory remaining, service call alerts).

5


Contracts

We executed a product manufacture and supply agreement on February 25, 2010, with XTEK, a software/hardware developer, having a principal office in name Kusocinskiego 3 Street 87-100 Torun, Poland. According to the agreement, XTEK has agreed to develop a specialized website and manufacture and supply us with GSM devices. Such GSM devices will be capable to gather and transmit reading of data generated by amusement, vending and other types of devices. The website will be able to receive data from the GSM devices, sort it, analyze it and create reports. Website user will be able to securely log into the website and monitor the data. User will also be able to receive pre-determined alerts via email and SMS. XTEK will develop, and test the website as well as manufacture and supply the products under the terms and conditions contained in the agreement.

Expenditures over the next 12 months are expected to exceed the sum of our cash on hand. We plan to commence activities to raise the funds required for the development program. There is no any assurance that we will be able to raise sufficient funds to proceed with any work or activities of the development program. We plan to raise additional funding for development by way of a private debt or equity financing, but have not commenced any activities to raise such funds and have no current plans on how to raise such funds.

Management does not plan to hire additional employees at this time. Our president and director will be responsible for the initial product sourcing. We intend to hire sales representatives initially on a commission only basis to keep administrative overhead to a minimum.

We do not expect to be purchasing or selling plant or significant equipment during the next twelve months.

Results of Operations

Our financial statements have been prepared assuming that we will continue as a going concern and accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Three Month and Nine Month Periods Ended October 31, 2011 Compared to the Three and Nine Month Periods Ended October 31, 2010 and the Period from Inception (March 5, 2008) to October 31, 2011.

                            Period from  
    Three months     Three months     Nine months     Nine months     March 5, 2008  
    ended     ended     ended     ended     (Inception) to  
    October 31,     October 31,     October 31,     October 31,     October 31,  
    2011     2010     2011     2010     2011  
Revenue $  Nil   $  Nil   $  Nil   $  Nil   $  Nil  
Operating Expenses $  7,605   $  3,831   $  17,696   $  6,317   $  43,544  
Net Income (Loss) $  (7,605 ) $  (3,831 ) $  (17,696 ) $  (6,317 ) $  (43,544 )

Our net loss for the three month period ended October 31, 2011 was $7,605 compared to a net loss of $3,831 for the period ended October 31, 2010 and our net loss for the nine month period ended October 31, 2011 was $17,696 compared to a net loss of $6,317 for the period ended October 31, 2010 and $43,544 during the period from inception (March 5, 2008) to October 31, 2011. During the three and nine month periods ended October 31, 2011, we did not generate any revenue.

6



                            Period from  
    Three months     Three months     Nine months     Nine months     March 5, 2008  
    ended     ended     ended     ended     (Inception) to  
    October 31,     October 31,     October 31,     October 31,     October 31,  
    2011     2010     2011     2010     2011  
Incorporation costs $  Nil   $ Nil   $ Nil   $ Nil   $ 84  
Professional fees $  1,716   $ 3,831   $ 4,287   $ 6,317   $ 23,457  
Transfer agent expense $  4,916   $ Nil   $ 10,116   $ Nil   $ 14,196  
General and administrative $  973   $ Nil   $ 3,293   $ Nil   $ 5,051  
Net Income (Loss) $  (7,605 ) $ (3,831 ) $ (17,696 $ (6,317 ) $ (43,544 )

During the three month period ended October 31, 2011, we incurred operating expenses of $7,605 compared to $3,831 for the three month period ended October 31, 2010 and during the nine month period ended October 31, 2011, we incurred operating expenses of $17,696 compared to $6,317 for the nine month period ended October 31, 2010 and $43,544 incurred during the period from inception (March 5, 2008) to October 31, 2011. The increase in our operating expenses was primarily due to increased transfer agent expenses and general and administrative expenses.

Liquidity and Capital Resources

Working Capital

    As at     As at  
    October 31,     January 31,  
    2011     2011  
Current Assets $  Nil   $  15,742  
Current Liabilities $  6,704   $  8,590  
Working Capital $  6,704   $  7,152  

Cash Flows

    Nine months     Nine months     Period from  
    Ended     Ended     March 5, 2008  
    October 31,     October 31,     (Inception) to  
    2011     2010     October 31, 2011  
Net cash used in operations $  (8,042 ) $  (10,192 ) $ (36,840 )
Net cash used in investing activities $  Nil   $  Nil   $ Nil  
Net cash provided by financing activities $  Nil   $  25,500   $ 36,840  
Increase (decrease) in cash $  (8,042 ) $  15,308   $ Nil  

As at October 31, 2011, our current assets were $Nil compared to $15,742 in current assets as at January 31, 2011. As at the nine month period ended October 31, 2011, we had no current assets. As at October 31, 2011, our current liabilities were $6,704 compared to $8,590 current liabilities as at January 31, 2011. Current liabilities were comprised of $6,704 in accrued expenses.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the nine month period ended October 31, 2011, net cash flows used in operating activities was $8,042 consisting of a net loss of $17,696, a decrease in prepaid expenses of $7,700 and an increase in accrued expenses of $1,954. Net cash flows used in operating activities was $36,840 for the period from March 5, 2008 (inception) to October 31, 2011.

Cash Flows from Investing Activities

For the nine month period ended October 31, 2011, we did not generate any cash flows from investing activities.

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Cash Flows from Financing Activities

We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the nine month period ended October 31, 2011, net cash flows from financing activities was $Nil. For the period from inception (March 5, 2008) to October 31, 2011, net cash provided by financing activities was $36,840 received mainly from the sale of our securities as well as related party loans.

Plan of Operation and Funding

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. We will have to raise additional funds in the next twelve months in order to sustain and expand our operations. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.

Off-Balance Sheet Arrangements

We have no 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 of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Going Concern

The independent auditors' report accompanying our January 31, 2011 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

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Development Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development-stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, our company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Our company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At October 31, 2011 our company's bank deposit did not exceed the insured amounts.

Fair Value of Financial Instruments

Our company’s financial instruments consist of cash and cash equivalents, accrued expenses and loans payable to a related party. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Advertising Costs

Our company’s policy regarding advertising is to expense advertising when incurred. Our company incurred advertising expense of $0 as of October 31, 2011and October 31, 2010.

Dividends

Our company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing our company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing our company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of October 31, 2011.

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Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). To date, our company has not adopted a stock option plan and has not granted any stock options. As of October 31, 2011, our company has not issued any stock-based payments to its employees.

Revenue Recognition

Our company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended October 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit

Description

No.

 

 

(3)

(i) Articles; (ii) By-laws

 

 

3.1

Articles of Incorporation (Incorporated by reference to our Registration Statement on Form S-1 filed on April 7, 2010).

 

 

3.2

By-Laws (Incorporated by reference to our Registration Statement on Form S-1 filed on April 7, 2010).

 

 

(10)

Material Contracts

 

 

10.1

Product Manufacture and Supply Agreement dated February 25, 2010 between our company and XTEK (Incorporated by reference to our Registration Statement on Form S-1 filed on April 7, 2010).

 

 

(31)

Rule 13a-14(a) / 15d-14(a) Certifications

 

 

31.1*

Certification filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive officer, Principal Financial Officer and Principal Accounting Officer.

 

 

(32)

Section 1350 Certifications

 

 

32.1*

Certification filed pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive officer, Principal Financial Officer and Principal Accounting Officer.

 

 

101*

Interactive Data File (Form 10-Q for the quarterly period ended October 31, 2011 furnished in XBRL).


101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document


*

Filed herewith.

   
**

Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  GLOBAL GSM SOLUTIONS, INC.
   
   
Date: December 1, 2011 /s/ Geoffrey Dart
  Geoffrey Dart
  President, Chief Executive Officer, Chief Financial
  Officer, Secretary, Treasurer and Director
  (Principal Executive Officer, Principal Financial Officer
  and Principal Accounting Officer)

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