Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 30, 2013
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________ to _________
000-52929
(Commission File Number)
Guar Global Ltd.
(Exact name of registrant as specified in charter)
Nevada 98-0540833
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
407 E. Louisiana Street, McKinney Texas 75069
(Address of principal executive offices)
(214) 380-9677
(Registrant's Telephone Number, including Area Code)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirement for
the past 90 days. Yes [X] 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 (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "larger accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b- 2 of the Exchange Act). Yes [X] No [ ]
As of June 14, 2013, 73,200,000 shares of the issuer's common stock, $0.0001 par
value, were outstanding.
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 1A. Risk Factors 18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3. Defaults Upon Senior Securities 19
Item 4. Mine Safety Disclosures 19
Item 5. Other Information 19
Item 6. Exhibits 19
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Guar Global Ltd.
(A Development Stage Company)
Balance Sheets
April 30, 2013 July 31, 2012
-------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 135,101 $ 5,601
Prepaid exenses 2,405 300
--------- ---------
TOTAL CURRENT ASSETS 137,506 5,901
--------- ---------
TOTAL ASSETS $ 137,506 $ 5,901
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 21,001 $ 482
Accrued expenses 1,767 9,317
Interest payable 11,918 --
Convertible notes payable 445,000 --
Advances from stockholder 76,815 66,835
--------- ---------
TOTAL CURRENT LIABILITIES 556,501 76,634
--------- ---------
TOTAL LIABILITIES 556,501 76,634
--------- ---------
STOCKHOLDERS' DEFICIT
Preferred stock: par value $0.001: 25,000,000 shares authorized;
none issued or outstanding -- --
Common stock: par value $0.0001: 300,000,000 shares authorized;
73,200,000 shares issued and outstanding 7,320 7,320
Additional paid-in capital 41,180 41,180
Deficit accumulated during the development stage (467,495) (119,233)
--------- ---------
TOTAL STOCKHOLDERS' DEFICIT (418,995) (70,733)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 137,506 $ 5,901
========= =========
See accompanying notes to the financial statements.
3
Guar Global Ltd.
(A Development Stage Company)
Statements of Operations
For the Period from
For the Nine Months For the Nine Months May 29, 2007
Ended Ended (inception) through
April 30, 2013 April 30, 2012 April 30, 2013
-------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited)
Revenues earned during the development stage $ -- $ -- $ --
------------ ------------ ------------
Operating expenses
Professional fees 105,766 16,475 209,494
Rent 1,381 1,394 10,836
Consulting fees 40,956 -- 40,956
Travel 33,953 -- 33,953
Website development 35,000 -- 35,000
Amortization -- -- 5,950
General and administrative 3,078 3,577 10,628
------------ ------------ ------------
Total operating expenses 220,134 21,446 346,817
------------ ------------ ------------
Loss from operations (220,134) (21,446) (346,817)
------------ ------------ ------------
Other income (expense)
Other income -- -- 7,450
Interest expense (11,918) -- (11,918)
Writeoff of failed venture (116,210) -- (116,210)
------------ ------------ ------------
Total other income (expense) (128,128) -- (120,678)
------------ ------------ ------------
Loss before income tax provision (348,262) (21,446) (467,495)
Income tax provision -- -- --
------------ ------------ ------------
Net loss $ (348,262) $ (21,446) $ (467,495)
============ ============ ============
Net loss per common share:
- Basic and diluted $ (0.00) $ (0.00)
============ ============
Weighted average common shares outstanding
- basic and diluted 73,200,000 73,200,000
============ ============
See accompanying notes to the financial statements.
4
Guar Global Ltd.
(A Development Stage Company)
Statements of Operations
For the Three Months For the Three Months
Ended Ended
April 30, 2013 April 30, 2012
-------------- --------------
(Unaudited) (Unaudited)
Revenues earned during the development stage $ -- $ --
------------ ------------
Operating expenses
Professional fees 61,789 5,925
Rent 456 467
Consulting fees 6,167 --
Travel 33,593 --
General and administrative 1,113 360
------------ ------------
Total operating expenses 103,118 6,752
------------ ------------
Loss from operations (103,118) (6,752)
------------ ------------
Other income (expense)
Interest expense (7,164) --
------------ ------------
Total other income (expense) (7,164) --
------------ ------------
Loss before income tax provision (110,282) (6,752)
Income tax provision -- --
------------ ------------
Net loss $ (110,282) $ (6,752)
============ ============
Net loss per common share:
- Basic and diluted $ (0.00) $ (0.00)
============ ============
Weighted average common shares outstanding
- basic and diluted 73,200,000 73,200,000
============ ============
See accompanying notes to the financial statements.
5
Guar Global Ltd.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
For the Period from May 29, 2007 (Inception) through April 30, 2013
(Unaudited)
Deficit
Common Stock, $0.0001 Par Value Accumulated Total
------------------------------- Additional During the Stockholders'
Number of Paid-in Development Equity
Shares Amount Capital Stage (Deficit)
------ ------ ------- ----- ---------
Balance, May 29, 2007
(inception) -- $ -- $ -- $ -- $ --
Shares issued for cash
at $0.0003 per share
on August 1, 2008 48,000,000 4,800 15,200 -- 20,000
Net loss (1,999) (1,999)
----------- -------- -------- ---------- ---------
Balance, July 31, 2007 48,000,000 4,800 15,200 (1,999) 18,001
Shares issued for cash
at $0.001 per share
on January 24, 2008 25,200,000 2,520 25,980 -- 28,500
Net loss (43,401) (43,401)
----------- -------- -------- ---------- ---------
Balance, July 31, 2008 73,200,000 7,320 41,180 (45,400) 3,100
Net loss (21,813) (21,813)
----------- -------- -------- ---------- ---------
Balance, July 31, 2009 73,200,000 7,320 41,180 (67,213) (18,713)
Net loss (10,046) (10,046)
----------- -------- -------- ---------- ---------
Balance, July 31, 2010 73,200,000 7,320 41,180 (77,259) (28,759)
Net loss (16,690) (16,690)
----------- -------- -------- ---------- ---------
Balance, July 31, 2011 73,200,000 7,320 41,180 (93,949) (45,449)
Net loss (25,284) (25,284)
----------- -------- -------- ---------- ---------
Balance, July 31, 2012 73,200,000 7,320 41,180 (119,233) (70,733)
Net loss (348,262) (348,262)
----------- -------- -------- ---------- ---------
Balance, April 30, 2013 73,200,000 $ 7,320 $ 41,180 $ (467,495) $(418,995)
=========== ======== ======== ========== =========
See accompanying notes to the financial statements.
6
Guar Global Ltd.
(A Development Stage Company)
Statements of Cash Flows
For the Period from
For the Nine Months For the Nine Months May 29, 2007
Ended Ended (inception) through
April 30, 2013 April 30, 2012 April 30, 2013
-------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(348,262) $ (21,446) $(467,495)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization -- -- 5,950
Changes in operating assets and liabilities:
Prepaid expenses (2,105) -- (2,405)
Accounts payable 20,519 (238) 21,001
Accrued liabilities (7,550) (1,900) 1,767
--------- --------- ---------
Net cash used in operating activities (337,398) (23,584) (441,182)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Website development -- -- (5,950)
--------- --------- ---------
Net cash used in investing activities -- -- (5,950)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from stockholder 9,980 30,000 76,815
Proceeds from convertible notes 445,000 -- 445,000
Increase in interest payable 11,918 -- 11,918
Proceeds from sale of common stock -- -- 48,500
--------- --------- ---------
Net cash provided by financing activities 466,898 30,000 582,233
--------- --------- ---------
Net change in cash 129,500 6,416 135,101
Cash, beginning of period 5,601 2,426 --
--------- --------- ---------
Cash, end of period $ 135,101 $ 8,842 $ 135,101
========= ========= =========
Supplemental disclosure of cash flows information:
Interest aid $ -- $ -- $ --
========= ========= =========
Income tax paid $ -- $ -- $ --
========= ========= =========
See accompanying notes to the financial statements.
7
Guar Global Ltd.
(A Development Stage Company)
April 30, 2013 and 2012
Notes to the Financial Statements
(Unaudited)
NOTE 1 - ORGANIZATION AND OPERATIONS
INCORPORATION
The Company was incorporated under the name of ERE Management, Inc. under the
laws of the State of Nevada on May 29, 2007. The Company plans to develop
software, specializing in providing sales tool solutions for the real estate
industry. More specifically, the Company has developed an online Content
Management System ("CMS") that enables real estate agents to build a website to
showcase their listings.
AMENDMENTS TO THE ARTICLES OF INCORPORATION
Effective March 14, 2012 the Board of Directors and the majority voting
stockholders adopted and approved a resolution to amend the Company's Articles
of Incorporation to (a) increase the number of shares of authorized common stock
from 20,000,000 to 300,000,000; (b) create 25,000,000 shares of "blank check"
preferred stock, par value $0.0001, per share; (c) change the par value of each
share of common stock from $0.001 per share to $0.0001 per share; and (d)
effectuate a forward split of all issued and outstanding shares of common stock,
at a ratio of thirty-for-one (30:1) (the "Stock Split").
All shares and per share amounts in the financial statements have been adjusted
to give retroactive effect to the Stock Split.
Effective September 24, 2012 the Board of Directors and the majority voting
stockholders approved an amendment to the Company's Articles of Incorporation to
change its name from "ERE Management, Inc." to "Guar Global Ltd."
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited interim financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP") for the interim financial information,
and with the rules and regulations of the United States Securities and Exchange
Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP
for complete financial statements. The unaudited interim financial statements
furnished reflect all adjustments (consisting of normal recurring accruals)
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period presented. Unaudited interim results are not
necessarily indicative of the results for the full fiscal year. These financial
statements should be read in conjunction with the audited financial statements
of the Company for the fiscal year ended July 31, 2012 and notes thereto
contained in the Company's Annual Report on Form 10-K filed with the SEC on
October 29, 2012.
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 915-10-20 of
the FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since inception
have been considered as part of the Company's development stage activities.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with U.S. GAAP 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 reporting amounts of revenues and
expenses during the reporting period.
8
The Company's significant estimates and assumptions include the fair value of
financial instruments; income tax rate, income tax provision, deferred tax
assets and valuation allowance of deferred tax assets; the carrying value and
recoverability of long-lived assets, including the values assigned to an
estimated useful lives of website development costs and the assumption that the
Company will be a going concern. Those significant accounting estimates or
assumptions bear the risk of change due to the fact that there are uncertainties
attached to those estimates or assumptions, and certain estimates or assumptions
are difficult to measure or value.
Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable in relation to the financial
statements taken as a whole under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Management regularly evaluates the key factors and assumptions used to develop
the estimates utilizing currently available information, changes in facts and
circumstances, historical experience and reasonable assumptions. After such
evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification
("Paragraph 820-10-35-37") to measure the fair value of its financial
instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards
Codification establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. To increase consistency and comparability in fair value
measurements and related disclosures, paragraph 820-10-35-37 of the FASB
Accounting Standards Codification establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into
three (3) broad levels. The fair value hierarchy gives the highest priority to
quoted prices (unadjusted) in active markets for identical assets or liabilities
and the lowest priority to unobservable inputs. The three (3) levels of fair
value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting
Standards Codification are described below:
Level 1 Quoted market prices available in active markets for identical assets
or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.
Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices
(unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.
The carrying amounts of the Company's financial assets and liabilities, such as
cash, prepaid expenses, accounts payable and accrued expenses, approximate their
fair values because of the short maturity of these instruments.
Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.
It is not, however, practical to determine the fair value of advances from
stockholders, if any, due to their related party nature.
9
FISCAL YEAR-END
The Company elected July 31 as its fiscal year ending date.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
RELATED PARTIES
The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to section 850-10-20 the related parties include a) affiliates of the
Company; b) entities for which investments in their equity securities would be
required, absent the election of the fair value option under the Fair Value
Option Subsection of section 825-10-15, to be accounted for by the equity method
by the investing entity; c) trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of
management; d) principal owners of the Company; e) management of the Company; f)
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and g. other parties that can significantly
influence the management or operating policies of the transacting parties or
that have an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: a) the nature of the relationship(s) involved; b) a description of the
transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and
such other information deemed necessary to an understanding of the effects of
the transactions on the financial statements; c) the dollar amounts of
transactions for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the terms from that
used in the preceding period; and d. amounts due from or to related parties as
of the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.
COMMITMENTS AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the consolidated financial statements are issued, which may
result in a loss to the Company but which will only be resolved when one or more
future events occur or fail to occur. The Company assesses such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In
assessing loss contingencies related to legal proceedings that are pending
against the Company or unasserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or
unasserted claims as well as the perceived merits of the amount of relief sought
or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's consolidated financial
statements. If the assessment indicates that a potentially material loss
contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and material, would be
disclosed.
Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed. Management
does not believe, based upon information available at this time, that these
matters will have a material adverse effect on the Company's consolidated
financial position, results of operations or cash flows. However, there is no
assurance that such matters will not materially and adversely affect the
Company's business, financial position, and results of operations or cash flows.
10
REVENUE RECOGNITION
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the
services have been rendered to the customer, (iii) the sales price is fixed or
determinable, and (iv) collectability is reasonably assured.
INCOME TAX PROVISION
The Company adopted the provisions of paragraph 740-10-25-13 of the FASB
Accounting Standards Codification. Paragraph 740-10-25-13.addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under paragraph
740-10-25-13, the Company may recognize the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a
greater than fifty percent (50%) likelihood of being realized upon ultimate
settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition,
classification, interest and penalties on income taxes, accounting in interim
periods and requires increased disclosures. The Company had no material
adjustments to its liabilities for unrecognized income tax benefits according to
the provisions of paragraph 740-10-25-13.
The estimated future tax effects of temporary differences between the tax basis
of assets and liabilities are reported in the accompanying consolidated balance
sheets, as well as tax credit carry-backs and carry-forwards. The Company
periodically reviews the recoverability of deferred tax assets recorded on its
consolidated balance sheets and provides valuation allowances as management
deems necessary.
Management makes judgments as to the interpretation of the tax laws that might
be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing
jurisdictions and is subject to audit in these jurisdictions. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
UNCERTAIN TAX POSITIONS
The Company did not take any uncertain tax positions and had no adjustments to
unrecognized income tax liabilities or benefits pursuant to the provisions of
Section 740-10-25 for the interim period ended April 30, 2013 or 2012.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share is computed pursuant to section 260-10-45 of
the FASB Accounting Standards Codification. Basic net income (loss) per common
share is computed by dividing net income (loss) by the weighted average number
of shares of common stock outstanding during the period. Diluted net income
(loss) per common share is computed by dividing net income (loss) by the
weighted average number of shares of common stock and potentially outstanding
shares of common stock during the period to reflect the potential dilution that
could occur from common shares issuable through contingent shares issuance
arrangement, stock options or warrants.
There were no potentially outstanding dilutive shares for the interim period
ended April 30, 2013 or 2012.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
11
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
evaluate subsequent events through the date when the financial statements were
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they
are widely distributed to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-08
In September 2011, the FASB issued the FASB Accounting Standards Update No.
2011-08 "INTANGIBLES--GOODWILL AND OTHER: TESTING GOODWILL FOR IMPAIRMENT" ("ASU
2011-08"). This Update is to simplify how public and nonpublic entities test
goodwill for impairment. The amendments permit an entity to first assess
qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying amount as a basis for
determining whether it is necessary to perform the two-step goodwill impairment
test described in Topic 350. Under the amendments in this Update, an entity is
not required to calculate the fair value of a reporting unit unless the entity
determines that it is more likely than not that its fair value is less than its
carrying amount.
The guidance is effective for interim and annual periods beginning on or after
December 15, 2011. Early adoption is permitted.
FASB ACCOUNTING STANDARDS UPDATE NO. 2011-11
In December 2011, the FASB issued the FASB Accounting Standards Update No.
2011-11 "BALANCE SHEET: DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES"
("ASU 2011-11"). This Update requires an entity to disclose information about
offsetting and related arrangements to enable users of its financial statements
to understand the effect of those arrangements on its financial position. The
objective of this disclosure is to facilitate comparison between those entities
that prepare their financial statements on the basis of U.S. GAAP and those
entities that prepare their financial statements on the basis of IFRS.
The amended guidance is effective for annual reporting periods beginning on or
after January 1, 2013, and interim periods within those annual periods.
FASB ACCOUNTING STANDARDS UPDATE NO. 2012-02
In July 2012, the FASB issued the FASB Accounting Standards Update No. 2012-02
"INTANGIBLES--GOODWILL AND OTHER (TOPIC 350) TESTING INDEFINITE-LIVED INTANGIBLE
ASSETS FOR IMPAIRMENT" ("ASU 2012-02").
This Update is intended to reduce the cost and complexity of testing
indefinite-lived intangible assets other than goodwill for impairment. This
guidance builds upon the guidance in ASU 2011-08, entitled TESTING GOODWILL FOR
IMPAIRMENT. ASU 2011-08 was issued on September 15, 2011, and feedback from
stakeholders during the exposure period related to the goodwill impairment
testing guidance was that the guidance also would be helpful in impairment
testing for intangible assets other than goodwill.
The revised standard allows an entity the option to first assess qualitatively
whether it is more likely than not (that is, a likelihood of more than 50
percent) that an indefinite-lived intangible asset is impaired, thus
necessitating that it perform the quantitative impairment test. An entity is not
required to calculate the fair value of an indefinite-lived intangible asset and
12
perform the quantitative impairment test unless the entity determines that it is
more likely than not that the asset is impaired.
This Update is effective for annual and interim impairment tests performed in
fiscal years beginning after September 15, 2012. Earlier implementation is
permitted.
OTHER RECENTLY ISSUED, BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying financial statements.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in the normal
course of business.
As reflected in the accompanying financial statements, the Company had a deficit
accumulated during the development stage at April 30, 2013, a net loss and net
cash used in operating activities for the interim period then ended. These
factors raise substantial doubt about the Company's ability to continue as a
going concern.
While the Company is attempting to commence operations and generate revenues,
the Company's cash position may not be significant enough to support the
Company's daily operations. Management intends to raise additional funds by way
of a public or private offering. Management believes that the actions presently
being taken to further implement its business plan and generate revenues provide
the opportunity for the Company to continue as a going concern. While the
Company believes in the viability of its strategy to increase revenues and in
its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan and generate
revenues.
The financial statements do not include any adjustments related to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
NOTE 4 - RELATED PARTY TRANSACTIONS
FREE OFFICE SPACE
The Company has been provided office space by its Chief Executive Officer at no
cost. The management determined that such cost is nominal and did not recognize
the rent expense in its financial statement.
ADVANCES FROM STOCKHOLDER
From time to time, stockholders of the Company advance funds to the Company for
working capital purpose. Those advances are unsecured, non-interest bearing and
due on demand.
NOTE 5 - CONVERTIBLE NOTES PAYABLE
On November 9, 2012, the Company entered into a loan agreement. The balance of
$200,000 is due on November 9, 2013, bears interest at 10% per year and is
convertible at $0.25 per share, at the discretion of the holder. Interest
outstanding at April 30, 2013 is $9,425. $150,000 of the $200,000 received was
advanced for a potential acquisition in Hong Kong. The venture failed and the
advance was written off.
On January 16, 2013, the Company entered into a loan agreement. The balance of
$50,000 is due on January 16, 2014, bears interest at 10% per year and is
convertible at $0.25 per share, at the discretion of the holder. Interest
outstanding at April 30, 2013 is $1,425. The $50,000 that was received was
advanced for a potential acquisition in Hong Kong. The venture failed and the
advance was written off.
13
On April 10, 2013 the Company entered into a loan agreement. The balance of
$195,000 is due on April 10, 2014, bears interest at 10% per year and is
convertible at $0.25 per share, at the discretion of the holder. Interest
outstanding at April 30, 2013 is $1,069.
NOTE 6 - STOCKHOLDERS' DEFICIT
SHARES AUTHORIZED
Upon formation the total number of shares of common stock which the Company is
authorized to issue was Twenty Million (20,000,000) shares, par value $0.001 per
share.
Effective March 14, 2012 the Board of Directors and the majority voting
stockholders adopted and approved a resolution to amend the Company's Articles
of Incorporation to (a) increase the number of shares of authorized common stock
from 20,000,000 to 300,000,000; (b) create 25,000,000 shares of "blank check"
preferred stock, par value $0.0001, per share; (c) change the par value of each
share of common stock from $0.001 per share to $0.0001 per share; and (d)
effectuate a forward split of all issued and outstanding shares of common stock,
at a ratio of thirty-for-one (30:1) (the "Stock Split").
All shares and per share amounts in the financial statements have been adjusted
to give retroactive effect to the Stock Split.
COMMON STOCK
On July 16, 2007, the Company issued 48,000,000 shares of its common stock to
Mr. Imperial for cash proceeds of $20,000. On July 17, 2007, Mr. Imperial was
elected to the Board of Directors, and became the President, Secretary, and
Treasurer of the Company.
On January 24, 2008, the Company completed and closed an offering by selling
25,200,000 shares, of the 36,000,000 registered shares, of its common stock, par
value of $0.0001 per share, at an offering price of $0.0017 per share for gross
proceeds of $42,000. Costs associated with this offering were $13,500.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date
through the date when the financial statements were issued to determine if they
must be reported. The Management of the Company determined that there were
reportable subsequent events to be disclosed as follows:
Effective May 7, 2013, the Board of Directors of the Company appointed Mr.
Michael C. Shores as Chief Executive Officer and Chairman of the Board of
Directors.
In association with this appointment, the Company entered into an employment
agreement (the "Employment Agreement") with Mr. Shores in connection with his
employment as the Chief Executive Officer and Chairman of the Board of Directors
of the Company. Pursuant to the Employment Agreement, Mr. Shores will be
employed as the Chief Executive Officer of the Company for a two year term, and
will receive an initial base salary of $7,000 per month. Mr. Shores will
dedicate between thirty and seventy percent of his time to operating the
Company. Either party may terminate the Employment Agreement upon thirty (30)
days written notice or immediately in certain other circumstances. In the event
of termination for no cause (as defined in the Employment Agreement), the
Company will pay Mr. Shores four (4) months severance. Mr. Shores and the
Company also agreed to negotiate the terms of a restricted stock award plan
within sixty (60) days of the date of the Employment Agreement.
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Report on Form 10-Q contains forward-looking statements that involve risks
and uncertainties. You should not place undue reliance on these forward-looking
statements. Our actual results could differ materially from those anticipated in
the forward-looking statements for many reasons, including the risks described
in this report, our Registration Statement on Form SB-2 and other filings we
make from time to time with the Securities and Exchange Commission. Although we
believe the expectations reflected in the forward-looking statements are
reasonable, they relate only to events as of the date on which the statements
are made. We do not intend to update any of the forward-looking statements after
the date of this report to conform these statements to actual results or to
changes in our expectations, except as required by law.
This discussion and analysis should be read in conjunction with the unaudited
interim financial statements and notes thereto included in this Report and the
audited financials in our Annual Report on Form 10-K for the year ended July 31,
2012, filed with the Securities and Exchange Commission.
In this Quarterly Report on Form 10-Q, references to "dollars" and "$" are to
United States dollars and, unless otherwise indicated, references to "we,"
"our," "us," the "Company," "GGBL," or the "Registrant" refer to Guar Global
Ltd., a Nevada corporation.
OVERVIEW
We are a development stage company with limited operations and no revenues from
our business activities. Our registered independent auditors have issued a going
concern opinion. This means that our registered independent auditors believe
there is substantial doubt that we can continue as an on-going business for the
next 12 months. We do not anticipate that we will generate significant revenues
until we have implemented our marketing plan to generate customers. Accordingly,
we must raise cash from sources other than our operations in order to implement
our marketing plan.
In our management's opinion, there is a need for software that allows real
estate agents with no technical knowledge to build websites and post their
listings and to maintain and update the websites with new product listings
easily and quickly. We are focused on developing such CMS software products and
offering them to independent and non-independent real estate agents.
Secondarily, with respect to our guar gum business, which we commenced on
October 1, 2012, we plan to produce guar gum in northwest India for export
internationally to the oil and gas sector. We plan to use new technology and
specialized research to increase fields of guar seed and produce hydroxypropyl
guar gum, a gelling agent used in hydraulic fracturing for natural gas
extraction.
15
We have been unable to raise additional funds to implement our operations, and
we do not believe that we currently have sufficient resources to do so without
additional funding. As a result of the current difficult economic environment
and our lack of funding to implement our business plan, our Board of Directors
has begun to analyze strategic alternatives available to our Company to continue
as a going concern. Such alternatives include raising additional debt or equity
financing or consummating a merger or acquisition with a partner that may
involve a change in our business plan.
Although our Board of Directors' preference would be to obtain additional
funding to develop our software, the Board believes that it must consider all
viable strategic alternatives that are in the best interests of our
shareholders. Such strategic alternatives include a merger, acquisition, share
exchange, asset purchase, or similar transaction in which our present management
will no longer be in control of our Company and our business operations will be
replaced by that of our transaction partner. We believe we would be an
attractive candidate for such a business combination due to the perceived
benefits of being a publicly registered company, thereby providing a transaction
partner access to the public marketplace to raise capital.
We have had preliminary discussions with potential business combination
partners, but have not signed a definitive agreement to engage in a strategic
transaction as of the period covered by this quarterly report. Any such business
combination and the selection of a partner for such a business combination
involves certain risks, including analyzing and selecting a business partner
that is compatible to engage in a transaction with us or has business operations
that are or will prove to be profitable. In the event we select a partner for a
strategic transaction and sign a definitive agreement to consummate such a
transaction, we will report this event on a Form 8-K to be filed with the
Securities and Exchange Commission. If we are unable to locate a suitable
business combination partner and are otherwise unable to raise additional
funding, we will likely be forced to cease business operations.
PLAN OF OPERATION
Our specific goal is to develop our software product and to execute our
marketing plan. Initially, we plan to commence marketing of our software product
via direct distribution channels. We are currently devising our marketing
strategy which we plan to begin to implement in the coming fiscal quarters.
We will also distribute our software products through our website and
third-party websites that sell complementary software programs. Third-party
websites will be compensated via a commission for their sales.
RESULTS OF OPERATIONS
REVENUES
We had no revenues for the period from May 29, 2007 (date of inception), through
April 30, 2013.
16
EXPENSES
Our operating expenses for the three months ended April 30, 2013 and 2012, were
$103,118 and $6,752, respectively. Our operating expenses for the nine months
ended April 30, 2013 and 2012, were $220,134 and $21,466, respectively. Our
operating expenses for the period from May 29, 2007 (date of inception), through
April 30, 2013 were $346,817. These expenses were comprised primarily of legal
fees, transfer agent fees, accounting and audit fees, filing fees, and
consulting fees.
NET LOSS
Our net loss for the three months ended April 30, 2013 and 2012 was $110,282 and
$6,752, respectively. Our net loss for the nine months ended April 30, 2013 and
2012, were $348,262 and $21,466, respectively. Our net loss for the period from
May 29, 2007 (date of inception), through April 30, 2013 was $467,495.
PURCHASE OR SALE OF EQUIPMENT
We do not expect to purchase or sell any plant or significant equipment.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of April 30, 2013, reflects assets of $137,506 in the form
of cash and prepaid expenses. Since inception, we have sold 73,200,000 shares of
common stock with gross proceeds of $48,500. However, cash resources provided
from our capital formation activities have, from inception, been insufficient to
provide the working capital necessary to operate our Company.
We anticipate generating losses in the near term, and therefore, may be unable
to continue operations in the future. If we require additional capital, we would
have to issue debt or equity or enter into a strategic arrangement with a third
party. There can be no assurance that additional capital will be available to
us. We currently have no agreements, arrangements, or understandings with any
person to obtain funds through bank loans, lines of credit, or any other
sources.
GOING CONCERN CONSIDERATION
In their report on our financial statements as of July 31, 2012, our registered
independent auditors included a paragraph regarding our ability as a Company to
continue as a going concern. We have also included a note to the accompanying
unaudited financial statements as of April 30, 2013, that describes the
circumstances that pertain to this matter.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. 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 chief executive officer (our
principal executive officer) and our President, Secretary and Treasurer (our
principal financial officer and principle accounting officer),to allow for
timely decisions regarding required disclosure.
As of April 30, 2013, the end of our quarter covered by this Quarterly Report,
we carried out an evaluation, under the supervision and with the participation
of our chief executive officer (our principal executive officer) and our
President, Secretary and Treasurer (our principal financial officer and
principle accounting officer), of the effectiveness of the design and operation
of our disclosure controls and procedures. Based on the foregoing, our principal
executive officer and principal financial 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 April 30, 2013, 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 may be involved from time to time in ordinary litigation, negotiation, and
settlement matters that will not have a material effect on our operations or
finances. We are not aware of any pending or threatened litigation against us or
our officers and Directors in their capacity as such that could have a material
impact on our operations or finances.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
3.1(a) Articles of Incorporation (incorporated by reference to the
Registrant's Registration Statement on Form SB-2 (File No.
333-147250) filed on November 9, 2007).
3.1(b) Certificate of Amendment to Articles of Incorporation
(incorporated by reference to the Registrant's Current Report on
Form 8-K filed on April 19, 2012).
3.1(c) Certificate of Change (incorporated by reference to the
Registrant's Current Report on Form 8-K filed on April 19, 2012).
3.1(d) Certificate of Amendment to Articles of Incorporation
(incorporated by reference to the Registrant's Current Report on
Form 8-K filed on October 15, 2012).
3.2 Bylaws (incorporated by reference to the Registrant's Registration
Statement on Form SB-2 (File No. 333-147250) filed on November 9,
2007).
10.1 Employment Agreement by and between the Company and Michael C.
Shores, dated as of May 7, 2013 (incorporated by reference to the
Registrant's Current Report on Form 8-K filed on May 10, 2013).
31.1 Certification of the Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2 Certification of the Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
101.INS XBRL Instance Document**
101.SCH XBRL Taxonomy Extension Schema**
101.CAL XBRL Taxonomy Extension Calculation Linkbase**
101.DEF XBRL Taxonomy Extension Definition Linkbase**
101.LAB XBRL Taxonomy Extension Label Linkbase**
101.PRE XBRL Taxonomy Extension Presentation Linkbase**
----------
* Filed herewith
** Pursuant to Rule 406T of Regulation S-T, these interactive data files are
deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18
of the Securities Exchange Act of 1934 and otherwise are not subject to
liability.
19
SIGNATURE
In accordance with the requirements of the Securities Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GUAR GLOBAL LTD.
Date: June 14, 2013 By: /s/ Joselito Christopher G. Imperial
--------------------------------------
Joselito Christopher G. Imperial
President, Treasurer, Secretary
and Director (principal financial
officer and principal accounting
officer)
2
