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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2005
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| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission File No.: 000-50944
GLOBAL RESOURCE CORPORATION
(f/k/a Advanced Healthcare Technologies, Inc.)
(Exact name of registrant as specified in its charter)
Nevada 84-1565820
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9444 Waples Street, Suite 290
San Diego, CA 92121
(Address of principal executive offices)
Issuer's telephone number: (858) 646-7410
(Former name, former address and former
fiscal year, if changed since last report)
-------------------
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No | |
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 9, 2005, 7,215,034 shares of Global Resource's common stock were
outstanding.
Transitional Small Business Disclosure Format: Yes | | No |X|
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PART 1: FINANCIAL INFORMATION
ITEM 1 - CONDENSED FINANCIAL STATEMENTS
GLOBAL RESOURCE CORPORATION
FINANCIAL STATEMENTS
September 30, 2005
F-1
GLOBAL RESOURCE CORPORATION
Balance Sheets
ASSETS
September 30, March 31,
2005 2005
----------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 155 $ 175
----------- ------------
Total Current Assets 155 175
----------- ------------
OTHER ASSETS
Investments (Note 4) 35,555 57,073
----------- ------------
Total Other Assets 35,555 57,073
----------- ------------
TOTAL ASSETS $ 35,710 $ 57,248
=========== ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 35,454 $ 5,438
Accounts payable - related party 54,004 52,795
Accrued expenses - related party 500 --
Wages payable 170,000 150,000
Accrued interest 10,232 4,716
Convertible debentures 137,900 137,900
----------- ------------
Total Current Liabilities 408,090 350,849
----------- ------------
STOCKHOLDERS' DEFICIT
Preferred stock: 50,000,000 shares authorized
of $0.001 par value, no shares issued and
outstanding -- --
Common stock: 2,000,000,000 shares authorized,
of $0.001 par value, 7,215,000 shares
issued and outstanding 7,215 7,215
Additional paid-in capital 7,065,520 7,060,020
Accumulated deficit (7,445,115) (7,360,836)
----------- -------------
Total Stockholders' Deficit (372,380) (293,601)
----------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 35,710 $ 57,248
=========== =============
The accompanying notes are an integral part of these financial statements.
F-2
GLOBAL RESOURCE CORPORATION
Schedule of Investments
(Unaudited)
Description Percent
Company of Business Ownership Cost Fair Value Affiliation
------- ----------- --------- ---- ---------- -----------
Well Renewal, LLC Oil Wells 50% $150,000 $ 35,555(1) Yes
(1) Fair value determined by the Company's Board of Directors using the
following formula: Net assets of $71,110 multiplied by percent ownership of 50%
equals $35,555.
See also Note 4 for further explanation on the Company's methods of determining
fair values.
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL RESOURCE CORPORATION
Statements of Operations
(Unaudited)
For the three For the six
months ended months ended
September 30, September 30,
---------------------------- ----------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES $ -- $ -- $ -- $ --
COST OF GOODS SOLD -- -- -- --
----------- ----------- ----------- -----------
GROSS PROFIT -- -- -- --
OPERATING EXPENSES 38,320 76,144 57,245 76,144
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (38,320) (76,144) (57,245) (76,144)
OTHER EXPENSE
Interest Expense (2,758) -- (5,516) --
Unrealized loss on Investment (4,602) -- (21,518) --
----------- ----------- ----------- -----------
Total Other Expense (7,360) -- (27,034) --
LOSS BEFORE
DISCONTINUED OPERATIONS (45,680) (76,144) (84,279) (76,144)
----------- ----------- ----------- -----------
LOSS FROM DISCONTINUED
OPERATIONS (NOTE 3) -- -- -- (116,946)
----------- ----------- ----------- -----------
NET LOSS $ (45,680) $ (76,144) $ (84,279) $ (193,090)
=========== =========== =========== ===========
BASIC LOSS PER SHARE
Continuing Operations $ (0.01) $ (0.03) $ (0.01) $ (0.03)
Discontinued Operations -- -- -- (0.05)
----------- ----------- ----------- -----------
Total Loss per Share $ (0.01) $ (0.03) $ (0.01) $ (0.08)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,215,000 2,400,000 7,215,000 2,400,000
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL RESOURCE CORPORATION
Statements of Cash Flows
(Unaudited)
For the six months
ended September 30,
--------------------------
2005 2004
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITES
Net loss $ (84,279) $ (193,090)
Adjustments to reconcile net loss to
net cash used by operating activities:
Unrealized loss on investment 21,518 --
Depreciation and amortization -- 509
Contributed services 5,500 --
Noncash interest expense related to
beneficial conversion feature of debt -- 25,000
Changes in assets and liabilities:
Increase in accounts payable and accounts
payable - related party 31,225 26,144
Increase in accrued expenses and accrued
expenses - related party 26,016 --
Changes in discontinued assets
and liabilities -- 106,679
----------- -----------
Net Cash Used by Operating Activities (20) (34,758)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets -- --
----------- -----------
Net Cash Used by Investing Activities -- --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash used for partner draw -- (12,006)
Cash contributed by former officer -- 20,000
Proceeds from issuance of note payable -- 15,500
Change from cash overdraft -- (13,736)
Proceeds from convertible debenture -- 25,000
----------- -----------
Net Cash Provided by Financing
Activities $ -- $ 34,758
----------- -----------
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL RESOURCE CORPORATION
Statements of Cash Flows (Continued)
(Unaudited)
For the six months
ended September 30,
--------------------------
2005 2004
----------- -----------
NET INCREASE IN CASH (20) --
CASH AT BEGINNING OF PERIOD 175 --
----------- -----------
CASH AT END OF PERIOD $ 155 $ --
=========== ===========
CASH PAID FOR
Interest $ -- $ --
Income taxes $ -- $ --
SCHEDULE OF NON CASH FINANCING ACTIVITIES
Contributed capital by shareholders $ 5,500 $ 247,546
The accompanying notes are an integral part of these financial statements.
F-6
GLOBAL RESOURCE CORPORATION
Notes to the Financial Statements
September 30, 2005
NOTE 1 - FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at September 30, 2005 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's March 31, 2005 audited
financial statements. The results of operations for the period ended September
30, 2005 are not necessarily indicative of the operating results for the full
year.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company has had a
change in control and has changed its business plan and it has not generated any
revenues. The future of the Company is dependent upon its ability to obtain
financing and upon future profitable operations from the development of its new
business opportunities. Management plans to research possible acquisitions of
various entities and an officer of the Company has agreed to loan the Company
funds as needed to sustain business for a period of twelve months. However, the
Company is dependent upon its ability to secure equity and/or debt financing and
there are no assurances that the Company will be successful, without sufficient
financing it would be unlikely for the Company to continue as a going concern.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
that might arise from this uncertainty.
NOTE 3 - DISCONTINUED OPERATIONS
On June 30, 2004, the Company's CEO entered into an agreement to sell 1,260,000
of the Company's common stock and his controlling interest to an unrelated
individual. This resulted in the Company's wholly owned subsidiary, NutraTek,
LLC, being spun off and left Advanced Healthcare Technologies Inc. as the
remaining shell company. All assets were associated with the discontinued
operations as well as all of the liabilities except for $247,546 which was
associated with Advanced.
F-7
GLOBAL RESOURCE CORPORATION
Notes to the Financial Statements
September 30, 2005
NOTE 3 - DISCONTINUED OPERATIONS (Continued)
The net loss from discontinued operations for the three months ended June 30,
2004 are the operations of NutraTek for the three months ended March 31, 2004
because the spin off of NutraTek took place three months after Advanced
Healthcare Technologies, Inc. year end and NutraTek had a December 31 year end,
therefore three months after NutraTek's year end would be March 31, 2004.
For the three
months ended
March 31, 2004
-----------
REVENUES $ 15,349
COST OF GOODS SOLD 4,108
-----------
GROSS PROFIT 11,241
-----------
OPERATING EXPENSES
Payroll 53,930
Rent 2,271
Professional fees 49,104
Depreciation 509
General and administrative 21,362
-----------
Total Operating Expenses 127,176
-----------
LOSS FROM OPERATIONS (115,935)
-----------
OTHER EXPENSE
Interest expense (1,011)
-----------
Total Other Expense (1,011)
-----------
NET LOSS $ (116,946)
===========
BASIC LOSS PER SHARE $ (0.05)
===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 2,400,000
===========
F-8
GLOBAL RESOURCE CORPORATION
Notes to the Financial Statements
September 30, 2005
NOTE 4 - INVESTMENTS
The Company currently has a 50% investment in Well Renewal, LLC. The Company
paid $150,000 for a 50% controlling interest in Well Renewal, LLC on January 11,
2005. The business plan of Well Renewal is to obtain revenues via the management
and operation of thirty oil wells located in Oklahoma.
As required by ASR 118, the investment committee of the company is required to
assign a fair value to all investments. To comply with Section 2(a)(41) of the
Investment Company Act and Rule 2a-4 under the Investment Company Act, it is
incumbent upon the board of directors to satisfy themselves that all appropriate
factors relevant to the value of securities for which market quotations are not
readily available have been considered and to determine the method of arriving
at the fair value of each such security. To the extent considered necessary, the
board may appoint persons to assist them in the determination of such value, and
to make the actual calculations pursuant to the board's direction. The board
must also, consistent with this responsibility, continuously review the
appropriateness of the method used in valuing each issue of security in the
company's portfolio. The directors must recognize their responsibilities in this
matter and whenever technical assistance is requested from individuals who are
not directors, the findings of such intervals must be carefully reviewed by the
directors in order to satisfy themselves that the resulting valuations are fair.
No single standard for determining "fair value....in good faith" can be laid
down, since fair value depends upon the circumstances of each individual case.
As a general principle, the current "fair value" of an issue of securities being
valued by the board of directors would appear to be the amount which the owner
might reasonably expect to receive for them upon their current sale. Methods
which are in accord with this principle may, for example, be based on a multiple
of earnings, or a discount from market of a similar freely traded security, or
yield to maturity with respect to debt issues, or a combination of these and
other methods. Some of the general factors which the directors should consider
in determining a valuation method for an individual issue of securities include:
1) the fundamental analytical data relating to the investment, 2) the nature and
duration of restrictions on disposition of the securities, and 3) an evaluation
of the forces which influence the market in which these securities are purchased
and sold. Among the more specific factors which are to be considered are: type
of security, financial statements, cost at date of purchase, size of holding,
discount from market value of unrestricted securities of the same class at time
of purchase, special reports prepared by analysis, information as to any
transactions or offers with respect to the security, existence of merger
proposals or tender offers affecting the securities, price and extent of public
trading in similar securities of the issuer or comparable companies, and other
relevant matters.
F-9
GLOBAL RESOURCE CORPORATION
Notes to the Financial Statements
September 30, 2005
NOTE 4 - INVESTMENTS (Continued)
The board has arrived at the following valuation method for its investments.
Where there is not a readily available source for determining the market value
of any investment, either because the investment is not publicly traded, or is
thinly traded, and in absence of a recent appraisal, the value of the investment
shall be based on the following criteria:
1. Total amount of the Company's actual investment ("AI"). This amount shall
include all loans, purchase price of securities, and fair value of
securities given at the time of exchange.
2. Total revenues for the preceding twelve months ("R").
3. Earnings before interest, taxes and depreciation ("EBITD")
4. Estimate of likely sale price of investment ("ESP")
5. Net assets of investment ("NA")
6. Likelihood of investment generating positive returns (going concern).
The estimated value of each investment shall be determined as follows:
- Where no or limited revenues or earnings are present, then the value shall
be the greater of the investment's a) net assets, b) estimated sales price,
or c) total amount of actual investment.
- Where revenues and/or earnings are present, then the value shall be the
greater of one time (1x) revenues or three times (3x) earnings, plus the
greater of the net assets of the investment or the total amount of the
actual investment.
- Under both scenarios, the value of the investment shall be adjusted down if
there is a reasonable expectation that the Company will not be able to
recoup the investment or if there is reasonable doubt about the investments
ability to continue as a going concern.
- The Board reserves the right to hire an independent, certified appraiser to
assist with establishing a valuation of portfolio investments. Barring any
extraordinary factors, a certified appraised value shall be used when
available.
Based on the previous methodology, the Company determined that it's investment
in Well Renewal, LLC was to be valued at $57,073 on the date of investment.
Accordingly during 2004 a loss on the investment valuation of $92,927 was
recorded. As of September 30, 2005, the Company determined that the value of
their investment had decreased to $35,555, therefore an unrealized loss on
investment was recorded in the amount of $21,518.
The Company has not retained independent appraises to assist in the valuation of
the portfolio investments because the cost was determined to be prohibitive for
the current levels of investments.
NOTE 5 - MATERIAL EVENTS
On June 17, 2005 Jimmy Villalobos resigned as president of the Company.
F-10
GLOBAL RESOURCE CORPORATION
Notes to the Financial Statements
September 30, 2005
NOTE 6 - COMMITMENTS AND CONTINGENCIES
From September 27, 2004 through December 6, 2004, the Company issued
approximately 4,815,000 shares of common stock (the "Shares") upon conversion of
certain outstanding convertible debentures. The Company did not register the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), in
reliance on various exemptions from registration, including, but not limited to,
Section 3(b) of the Securities Act and Regulation E promulgated thereunder.
On June 17, 2005, the Division of Investment Management (the "Division") at the
Securities & Exchange Commission (the "SEC") has advised Global Resource that it
is the view of the Division that the Company cannot rely on the exemption
afforded by Regulation E and that it is unaware of any other exemptions from
registration for the issuance of the Shares. The Division also advised the
Company that, in the view of the Division, it appears that the issuance of the
Shares violated Section 5 of the Securities Act. The Company has advised the
Division that it is the Company's view that the issuance of the Shares was
exempt from registration under the Securities Act under various available
exemptions, including, but not limited to, Regulation E, and that the issuance
of the Shares did not violate Section 5 of the Act.
NOTE 7 - RELATED PARTY TRANSACTIONS
During the quarter ended June 30, 2005, a shareholder of the Company maintained
office space and provided services that resulted in rent expense of $500 and
payroll expense of $5,000. Both of these amounts were contributed to capital.
During the quarter ended September 30, 2005, shareholders of the company
maintained office space and provided services that resulted in rent expense of
$500 and payroll expense of $20,000. Both of these amounts were recorded as
accrued liabilities in the Accrued Liabilities - Related Party balance in the
Wages Payable balance, respectively.
F-11
ITEM 2 - PLAN OF OPERATION
The following discussion and analysis should be read in conjunction
with our unaudited consolidated condensed financial statements and related notes
included in this report. This report contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. The
statements contained in this report that are not historic in nature,
particularly those that utilize terminology such as "may," "will," "should,"
"expects," "anticipates," "estimates," "believes," or "plans" or comparable
terminology are forward-looking statements based on current expectations and
assumptions.
Various risks and uncertainties could cause actual results to differ
materially from those expressed in forward-looking statements. All
forward-looking statements in this document are based on information currently
available to us as of the date of this report, and we assume no obligation to
update any forward-looking statements. Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Change of Control
On June 30, 2004, Richard Mangiarelli purchased 126,000,000 shares of
Global Resource common stock from its former President, Chief Executive Officer,
Director, and majority stockholder, Johnny Sanchez. As a result, Mr. Mangiarelli
then held approximately 52.5% of the issued and outstanding common stock of
Global Resource.
In connection with this change in control, Mr. Sanchez resigned as our
President and Chief Executive Officer, Joel Rockwood resigned as our Vice
President and Chief Scientific Officer, and Michael MacArthur resigned as our
Secretary. The board of directors appointed Mr. Mangiarelli as the new
President, Chief Financial Officer, and Secretary. In addition, Mr. Sanchez, Mr.
Rockwood, Virginia Sanchez, Carmen Sanchez, and Joe V. Overcash resigned as
directors of Global Resource. The outgoing directors appointed Richard
Mangiarelli to fill the vacancies on the board.
On June 30, 2004, we entered into a Release and Indemnity Agreement
with Johnny Sanchez, our former President, Chief Executive Officer, Director,
and majority stockholder, pursuant to which we sold the all of our membership
interest in NutraTek to Mr. Sanchez in exchange for Mr. Sanchez's agreement to
do the following: (a) release us from any and all claims that Mr. Sanchez may
have had against us; (b) indemnify us for any and all claims against or
liabilities of Global Resource that existed before June 30, 2004, and (c) to
cooperate with and assist Global Resource in connection with its reporting
obligations or filing requirements under the Securities Act of 1933, as amended,
and Securities Exchange Act of 1934, as amended, and to deliver such other
instruments and take such other actions as may be reasonably requested by us in
order to carry out the intent of the agreement.
Immediately after the spin-off of Nutratak, Global Resource had no
operations. Before the change of control described above, Global Resource's
principal business and operations were those of NutraTek. NutraTek researched,
developed, and thereafter contracted with third parties to manufacture its own
line of nutritional dietary supplements, functional food products and natural
sweeteners.
Global Resource's new management decided to terminate the nutritional
products business and elected to become a business development company. As a
business development company, Global Resource will focus on making investments
in securities, and making available significant managerial assistance with
respect to the issuers of such securities, of companies that meet the following
criteria:
A. is organized under the laws of, and has its principal place of
business in, one of the states of the United States;
B. is not an investment company, as defined in the Investment Company
Act of 1940; and
C. satisfies one of the following:
1. it does not have any class of securities with respect to
which a member of a national securities exchange, broker, or dealer may
extend or maintain credit to or for a customer pursuant to rules or
regulations adopted by the Board of Governors of the Federal Reserve
System under section 7 of the Securities Exchange Act of 1934;
2
2. it is controlled by a business development company, either
alone or as part of a group acting together, and such business
development company in fact exercises a controlling influence over the
management or policies of such eligible portfolio company and, as a
result of such control, has an affiliated person who is a director of
such eligible portfolio company;
3. it has total assets of not more than $ 4,000,000, and
capital and surplus (shareholders' equity less retained earnings) of
not less than $ 2,000,000, except otherwise allowed by the Securities
and Exchange Commission; or
4. it meets such other criteria as management may establish
consistent with the rules and regulations of the Securities and
Exchange Commission.
To date, we have made one investment in Well Renewal LLC. Well Renewal
manages and operates oil wells in Oklahoma by utilizing a nitrogen and carbon
dioxide gas injection unit to "pump up" and re-pressure the wells to increase
oil output. At September 30, 2005, our investment in Well Renewal, valued at
approximately $35,555, with a cost of $150,000, consisted of the purchase of a
50% interest in Well Renewal LLC.
We are currently evaluating additional prospective eligible portfolio
companies for investment and intend to continue to do so over the next twelve
months. In that time period, we intend to hire from six to up to fifty
employees, depending on the nature of the portfolio companies in which we
invest. We have established a stock option plan in order to attract and retain
employees and to provide employees who make significant and extraordinary
contributions to our long-term growth and performance with equity-based
compensation incentives.
We intend to retain any future earnings to finance the expansion of its
business and any necessary capital expenditures, and for general corporate
purposes.
Liquidity and Capital Resources
We currently have limited working capital with which to satisfy our
cash requirements, and we will require additional capital in order to conduct
operations. We anticipate that we will require at least $250,000 in additional
working capital in order to sustain operations for the next 12 months. This
requirement may increase substantially, depending on the nature and capital
requirements of the business opportunities it elects to pursue.
In order to obtain working capital, from October, 2004 to January,
2005, we issued convertible debentures in the aggregate principal amount of
$155,000 in a private placement. The notes are due approximately five (5) months
after issuance and bear interest at a rate of eight percent (8%). The notes are
convertible into shares of our common stock, at the option of either us or the
holder of the note, at a floating conversion price of fifty percent (50%) of the
closing bid price per share on the day of conversion, or at the lowest price
allowable as set by us in an effective registration statement or exemption
notification as filed with the Securities and Exchange Commission. We are
obligated to register the resale of the shares of common stock issuable upon
conversion of the debenture under the Securities Act of 1933, as amended, or to
otherwise provide an acceptable exemption to registration under Regulation E of
the Securities Act of 1933, as amended.
In addition, in September 2004, we commenced an offering of our common
stock pursuant to Regulation E of the Securities Act of 1933, as amended.
Pursuant to this offering, we have sold 1,220,000 shares of common stock for
$12,200, and holders of the debentures referenced above have converted, in the
aggregate, approximately $19,800 of principal and interest due thereunder into
3,595,000 shares of our common stock. Since that time, the issuance of a
convertible debenture in the principal amount of $25,000 to Javelin Holdings for
services rendered has been rescinded by mutual agreement between us and Javelin
Holdings. Before this rescission, Javelin had converted $875 of principal on the
convertible debenture into 175,000 shares of common stock. In connection with
the rescission of the convertible debenture, Javelin returned 175,000 shares of
common stock to us for cancellations. These shares have not yet been cancelled.
3
In January 2005, we amended this offering to reduce the range of the
price per share of the offering. The Division of Investment Management of the
Securities and Exchange Commission ("SEC") has delivered comments to Global
Resource regarding this amended offering, and Global Resource is currently
working with the Division of Investment Management to address these comments. We
will not issue any shares in reliance on Regulation E until all comments from
the SEC are resolved. This offering may not provide Global Resources with the
capital necessary to fund its operations. In the interim, we will continue to
seek additional forms of capital and our management may provide additional
financing as required.
Off Balance Sheet Arrangements
We do not have any off-balance sheet financing arrangements.
ITEM 3 - CONTROLS AND PROCEDURES
Our disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission. Our Chief Executive Officer and Chief Financial Officer has
reviewed the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c))
within the last ninety days and has concluded that the disclosure controls and
procedures are effective to ensure that material information relating to Global
Resource Corporation is recorded, processed, summarized, and reported in a
timely manner. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
last day they were evaluated by our Chief Executive Officer and Chief Financial
Officer.
It should be noted that any system of controls, however well designed
and operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. As a small organization, the effectiveness of
our controls heavily depends on the direct involvement of our Chief Executive
Officer and Chief Financial Officer.
PART II: OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
From September 27, 2004 through December 6, 2004, we issued
approximately 4,815,000 shares of common stock, of which 1,220,000 were issued
for cash and 3,595,000 were issued upon conversion of certain outstanding
convertible debentures. We did not register these shares under the Securities
Act of 1933, as amended, in reliance on various exemptions from registration,
including, but not limited to, Section 3(b) of the Securities Act and Regulation
E promulgated thereunder.
Since that time, the issuance of a convertible debenture in the
principal amount of $25,000 to Javelin Holdings for services rendered has been
rescinded by mutual agreement between us and Javelin Holdings. Before this
rescission, Javelin had converted $875 of principal on the convertible debenture
into 175,000 shares of common stock. In connection with the rescission of the
convertible debenture, Javelin returned 175,000 shares of common stock to us for
cancellations. These shares have not yet been cancelled.
On June 17, 2005, the Division of Investment Management at the
Securities & Exchange Commission advised us that it is the view of the Division
that we cannot rely on the exemption afforded by Regulation E and that it is
unaware of any other exemptions from registration for the issuance of the
Shares. The Division also advised us that, in the view of the Division, it
appears that the issuance of the Shares violated Section 5 of the Securities
Act. We advised the Division that it is our view that the issuance of the Shares
was exempt from registration under the Securities Act under various available
exemptions, including, but not limited to, Regulation E, and that the issuance
of the Shares did not violate Section 5 of the Act.
At this time, neither the SEC nor any private party has commenced any
action against us alleging that we issued the shares in violation of Section 5
of the Securities Act. Further, the SEC has not, to our knowledge, commenced any
formal or informal inquiry with respect to its contention that the shares were
issued in violation of Section 5 of the Securities Act. In the event that any
such action or inquiry is commenced, we intend to defend against such
allegations vigorously.
4
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULT UPON SENIOR SECURITIES
(a) None.
(b) None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
(a) On November 16, 2004, our board of directors appointed Jimmy
Villalobos as our President, replacing Richard Mangiarelli, who resigned as
President but remained as our Chief Executive Officer. On June 17, 2005, Mr.
Villalobos resigned as our President, and our board of directors reappointed Mr.
Mangiarelli as our President.
(b) None.
ITEM 6 - EXHIBITS
Item
No. Description Method of Filing
---- ----------- ----------------
31.1 Certification of Richard Mangiarelli pursuant to Filed electronically herewith.
Rule 13a-14(a)
32.1 Chief Executive Officer and Chief Financial Officer Filed electronically herewith.
Certification pursuant to 18 U.S.C. ss. 1350 adopted
pursuant to Section 906 of the Sarbanes Oxley Act of
2002
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLOBAL RESOURCE CORPORATION
November 14, 2005 /s/ Richard Mangiarelli
------------------------------------
Richard Mangiarelli
Chief Executive Officer
(Principal Executive Officer,
Principal Financial Officer,
and Principal Accounting Officer)
6