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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 June 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 August 9, 2005, 7,215,000 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
JUNE 30, 2005
GLOBAL RESOURCE CORPORATION
Balance Sheets
ASSETS
------
June 30, March 31,
2005 2005
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ 175 $ 175
----------- -----------
Total Current Assets 175 175
----------- -----------
OTHER ASSETS
Investments (Note 4) 40,157 57,073
----------- -----------
Total Other Assets 40,157 57,073
----------- -----------
TOTAL ASSETS $ 40,332 $ 57,248
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES
Accounts payable $ 17,654 $ 5,438
Accounts payable - related party 54,004 52,795
Wages payable 150,000 150,000
Accrued interest 7,474 4,716
Convertible debentures 137,900 137,900
----------- -----------
Total Current Liabilities 367,032 350,849
----------- -----------
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 (7,399,435) (7,360,836)
----------- -----------
Total Stockholders' Deficit (326,700) (293,601)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 40,332 $ 57,248
=========== ===========
The accompanying notes are an integral part of these
financial statements.
F-2
GLOBAL RESOURCE CORPORATION
Schedule of Investments
Description Percent
Company of Business Ownership Cost Fair Value Affiliation
------- ----------- --------- ---- ---------- -----------
Well Renewal, LLC Oil Wells 50% $150,000 $ 40,157 (1) Yes
(1) Fair value determined by the Company's Board of Directors using the
following formula: Net assets of $80,314 X percent ownership of 50% =
40,157
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 months ended
June 30,
--------------------------
2005 2004
----------- -----------
REVENUES $ -- $ --
COST OF GOODS SOLD -- --
----------- -----------
GROSS PROFIT -- --
----------- -----------
OPERATING EXPENSES
General and administrative 18,925 --
----------- -----------
Total Operating Expenses 18,925 --
----------- -----------
LOSS FROM OPERATIONS (18,925) --
----------- -----------
OTHER EXPENSES
Interest expense (2,758) --
Unrealized loss on investment (16,916) --
----------- -----------
Total Other Expense (19,674) --
----------- -----------
LOSS BEFORE DISCONTINUED OPERATIONS (38,599) --
----------- -----------
LOSS FROM DISCONTINUED OPERATIONS (Note 3) -- (116,946)
----------- -----------
NET LOSS $ (38,599) $ (116,946)
=========== ===========
BASIC LOSS PER SHARE
Continued operations $ (0.01) $ --
Discontinued operations -- (0.05)
----------- -----------
Total Loss per Share $ (0.01) $ (0.05)
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 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 three months ended
June 30,
--------------------------
2005 2004
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITES
Net loss $ (38,599) $ (116,946)
Adjustments to reconcile net loss to
net cash used by operating activities:
Unrealized loss on investment 16,916 --
Depreciation and amortization -- 509
Contributed services 5,500 --
Changes in assets and liabilities:
Increase in accounts payable and accounts
payable - related party 13,425 --
Increase in accrued expenses 2,758
Changes in discontinued assets
and liabilities -- 106,679
----------- -----------
Net Cash Used by Operating Activities -- (9,758)
----------- -----------
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)
----------- -----------
Net Cash Provided by Financing
Activities $ -- $ 9,758
----------- -----------
The accompanying notes are an integral part of these
financial statements.
F-5
GLOBAL RESOURCE CORPORATION
Statements of Cash Flows (Continued)
(Unaudited)
For the three months
ended March 31,
--------------------------
2005 2004
----------- -----------
NET INCREASE IN CASH -- --
CASH AT BEGINNING OF PERIOD 175 --
----------- -----------
CASH AT END OF PERIOD $ 175 $ --
=========== ===========
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
June 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 June
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 June 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
June 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
June 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
June 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:
o 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.
o 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.
o 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.
o 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 June 30, 2005, the Company
determined that the value of their investment had decreased to $40,157,
therefore an unrealized loss on investment was recorded in the amount
of $16,916.
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
June 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 in payroll expense of $5,000. Both of these amounts
were contributed to capital.
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:
3
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. 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 June 30, 2005, our investment in Well Renewal, valued at
approximately $40,157, 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.
4
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.
5
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.
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
Rule 13a-14(a) herewith.
32.1 Chief Executive Officer and Chief Financial Officer Filed electronically
Certification pursuant to 18 U.S.C. ss. 1350 adopted herewith.
pursuant to Section 906 of the Sarbanes Oxley Act of
2002
6
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
August 11, 2005 /s/ Richard Mangiarelli
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Richard Mangiarelli
Chief Executive Officer
(Principal Executive Officer, Principal Financial
Officer, and Principal Accounting Officer)
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