UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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ýQUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2008
¨TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from: ____________ to ____________
Commission File Number 000-31104
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VISION GLOBAL SOLUTIONS INC.
(Exact name of small business issuer as specified in its charter)
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Nevada | 20-8203420 |
(State or other jurisdiction of | (IRS Employer |
20400 Stevens Creek Blvd., Suite 700Cupertino, California 95014 (408) 873-0400
(Address of principal executive offices)
(408) 873-0400
(Issuer’s telephone number)
Copies of all communications including all communications sent to the
agent for service of process should be sent to:
Blair Krueger, Esq., Attorney at Law The Krueger Group, LLP
5771 La Jolla Boulevard La Jolla, California 92037
Telephone: (858) 729-9997
Facsimile: (858) 729-9995
E-mail: blair@thekruegergroup.com
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 requirements for the past 90 days. Yesý 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | ¨ |
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| Accelerated filer | ¨ |
Non-accelerated filer | ¨ |
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| Smaller reporting company | ý |
(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ¨ No ý
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of February 13, 2009, 75,493,885 Common Stock, $.001 par value exclusive of treasury shares.
VISION GLOBAL SOLUTIONS INC.
INDEX
PART I. -- FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
VISION GLOBAL SOLUTIONS, INC.
Condensed Consolidated Balance Sheet
as of December 31, 2008 (unaudited) and March 31, 2008 (audited)
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| December 31, |
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| March 31, |
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| 2008 |
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| 2008 |
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ASSETS |
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CURRENT ASSETS |
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Cash |
| $ | 139 |
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| $ | 1,272 |
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Total Currents Assets |
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| 139 |
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| 1,272 |
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TOTAL ASSETS |
| $ | 139 |
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| $ | 1,272 |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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CURRENT LIABILITIES |
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Due to related party |
| $ | 119,792 |
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| $ | 85,416 |
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Account payable and accrued expenses |
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| 11,210 |
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| 22,772 |
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Total Current Liabilities |
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| 131,002 |
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| 108,188 |
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COMMITMENTS AND CONTINGENCIES |
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| - |
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| - |
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STOCKHOLDERS' DEFICIT |
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Common stock, Class A, $0.001 par value, unlimited shares authorized |
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75,493,885 and 63,493,885 shares issued and outstanding, respectively |
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| 75,494 |
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| 63,494 |
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Blank Check Preferred Stock 4,000,000 shares authorized, 0 issued and outstanding |
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| - |
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| - |
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Series A Preferred Stock, 1,000,000 shares authorized 0 issued and outstanding |
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| - |
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| - |
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Additional paid-in-capital |
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| 4,525,605 |
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| 4,517,605 |
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Accumulated deficit |
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| (4,731,962 | ) |
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| (4,688,015 | ) |
Total Stockholders' Deficit |
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| (130,863 | ) |
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| (106,916 | ) |
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
| $ | 139 |
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| $ | 1,272 |
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3
VISION GLOBAL SOLUTIONS, INC.
Consolidated Statements of Operations
for the Three and Nine Months Ended December 31, 2008 and 2007 (unaudited)
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| For The Three Months Ended December 31, |
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| For The Nine Months Ended December 31, |
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| 2007 |
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| 2008 |
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REVENUE |
| $ | - |
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| $ | - |
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| $ | - |
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| $ | - |
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COSTS AND OPERATING EXPENSES |
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General and administrative expenses |
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| 5,746 |
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| 11,147 |
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| 39,452 |
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| 53,879 |
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Settlement of litigation |
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| - |
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| 70,000 |
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| - |
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| 70,000 |
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Total Operating Expenses |
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| 5,746 |
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| 81,147 |
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| 39,452 |
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| 123,879 |
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NET LOSS FROM OPERATIONS |
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| (5,746 | ) |
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| (81,147 | ) |
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| (39,452 | ) |
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| (123,879 | ) |
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OTHER EXPENSES |
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Interest expense |
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| (1,522 | ) |
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| - |
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| (4,495 | ) |
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Total other expense |
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| (1,522 | ) |
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| - |
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| (4,495 | ) |
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NET LOSS |
| $ | (7,268 | ) |
| $ | (81,147 | ) |
| $ | (43,947 | ) |
| $ | (123,879 | ) |
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Net loss per common share - basic and diluted |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
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Weighted average number of common shares |
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outstanding - basic and diluted |
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| 71,604,997 |
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| 64,671,653 |
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| 71,604,997 |
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| 64,671,653 |
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4
VISION GLOBAL SOLUTIONS, INC.
Consolidated Statements of Cash Flows
for the Three and Nine Months Ended December 31, 2008 and 2007 (unaudited)
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| For The Nine Months Ended December 31, |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
| $ | (43,947 | ) |
| $ | (123,879 | ) |
Common stock issued for services |
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| 20,000 |
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| 40,000 |
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Adjustments to reconcile net loss to net cash used in |
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operating activities: |
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Changes in operating assets and liabilities |
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Increase (Decrease) in accounts payable and accrued expenses |
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| (11,562 | ) |
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| 9,151 |
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Net Cash Provided by Operating Activities |
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| (35,509 | ) |
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| (74,728 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Due to related party |
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| 34,376 |
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| 72,898 |
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Net Cash Used in Financing Activities |
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| 34,376 |
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| 72,898 |
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NET DECREASE IN CASH AND CASH EQUIVALENTS |
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| (1,133 | ) |
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| (1,830 | ) |
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CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
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| 1,272 |
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CASH AND CASH EQUIVALENTS, END OF PERIOD |
| $ | 139 |
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| (1,830 | ) |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: |
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Interest paid |
| $ | 4,495 |
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| $ | - |
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Income taxes |
| $ | - |
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| $ | - |
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Common stock issued for payment of accrued legal fees |
| $ | 20,000 |
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| $ | 40,000 |
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5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2008
(UNAUDITED)
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
The accompanying unaudited interim financial statements of Vision Global Solution, Inc. ("Vision Global") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in Vision Global's annual report filed with the SEC on 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal year ended March 31, 2008 as reported in the 10-K have been omitted.
Management Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statement disclosures. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates.
Going Concern. These financial statements have been prepared assuming that the Company will continue as a going concern. The Company is currently a shell corporation and has no current business activities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.
The Company's continued existence is dependent upon its ability to successfully merge with another company. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of liabilities that may result from the outcome of this uncertainty.
Cash Equivalents. Highly liquid investments with original maturities of three months or less are considered cash equivalents.
Income Taxes. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes, and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse.
Earnings per Share. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted net income (loss) per share is computed similarly to basic net income (loss) per share except that it includes the potential dilution that could occur if diluted securities were exercised. For the period presented, the Company did not have any outstanding dilutive securities, and, accordingly, diluted net loss per share equals basic net loss per share.
Fair Value of Financial Instruments. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. The carrying amounts of the Company's financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities, income tax payable and related party payable approximate fair value due to their short maturities.
Reclassification. Certain amounts in the prior year consolidated financial statements have been reclassified for comparative purposes to conform to the presentation in the current year consolidated financial statements.
6
Recent Accounting Pronouncements
Employers’ Disclosures about Postretirement Benefit Plan Assets
In December 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position on Financial Accounting Standard (“FSP FAS”) No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets.” This FSP amends FASB Statement No. 132(R) (“SFAS No. 132(R)”), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. FSP FAS No. 132(R)-1 also includes a technical amendment to SFAS No. 132(R) that requires a nonpublic entity to disclose net periodic benefit cost for each annual period for which a statement of income is presented. The required disclosures about plan assets are effective for fiscal years ending after December 15, 2009. The technical amendment was effective upon issuance of FSP FAS No. 132(R)-1. The Company is current ly assessing the impact of FSP FAS No. 132(R)-1 on its consolidated financial position and results of operations.
Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises
In December 2008, the FASB issued FSP FIN No. 48-3, “Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises.” FSP FIN No. 48-3 defers the effective date of FIN No. 48, “Accounting for Uncertainty in Income Taxes,” for certain nonpublic enterprises as defined in SFAS No. 109, “Accounting for Income Taxes.” However, nonpublic consolidated entities of public enterprises that apply U.S. generally accepted accounting principles (GAAP) are not eligible for the deferral. FSP FIN No. 48-3 was effective upon issuance. The impact of adoption was not material to the Company’s consolidated financial condition or results of operations.
Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities
In December 2008, the FASB issued FSP FAS No. 140-4 and FIN No. 46(R) -8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This FSP amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” to require public entities to provide additional disclosures about transfers of financials assets. FSP FAS No. 140-4 also amends FIN No. 46(R)-8, “Consolidation of Variable Interest Entities,” to require public enterprises, including sponsors that have a variable interest entity, to provide additional disclosures about their involvement with a variable interest entity. FSP FAS No. 140-4 also requires certain additional disclosures, in regards to variable interest entities, to provide greater transparency to financial statement users. FSP FAS No. 140-4 is effective for the first reporting period (interim or annu al) ending after December 15, 2008, with early application encouraged. The Company is currently assessing the impact of FSP FAS No. 140-4 on its consolidated financial position and results of operations.
Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity’s Consolidated Subsidiary
In November 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) Issue No. 08-8, “Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity’s Consolidated Subsidiary.” EITF No. 08-8 clarifies whether a financial instrument for which the payoff to the counterparty is based, in whole or in part, on the stock of an entity’s consolidated subsidiary is indexed to the reporting entity’s own stock. EITF No. 08-8 also clarifies whether or not stock should be precluded from qualifying for the scope exception of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” or from being within the scope of EITF No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” EITF No. 08-8 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company is currently assessing the impact of EITF No. 08-8 on its consolidated financial position and results of operations.
Accounting for Defensive Intangible Assets
In November 2008, the FASB issued EITF Issue No. 08-7, “Accounting for Defensive Intangible Assets.” EITF No. 08-7 clarifies how to account for defensive intangible assets subsequent to initial measurement. EITF No. 08-7 applies to all defensive intangible assets except for intangible assets that are used in research and development activities. EITF No. 08-7 is effective for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is currently assessing the impact of EITF No. 08-7 on its consolidated financial position and results of operations.
7
Equity Method Investment Accounting Considerations
In November 2008, the FASB issued EITF Issue No. 08-6 (“EITF No. 08-6”), “Equity Method Investment Accounting Considerations.” EITF No. 08-6 clarifies accounting for certain transactions and impairment considerations involving the equity method. Transactions and impairment dealt with are initial measurement, decrease in investment value, and change in level of ownership or degree of influence. EITF No. 08-6 is effective on a prospective basis for fiscal years beginning on or after December 15, 2008. The Company is currently assessing the impact of EITF No. 08-6 on its consolidated financial position and results of operations.
Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active
In October 2008, the FASB issued FSP FAS No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active.” This FSP clarifies the application of SFAS No. 157, “Fair Value Measurements,” in a market that is not active. The FSP also provides examples for determining the fair value of a financial asset when the market for that financial asset is not active. FSP FAS No. 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The impact of adoption was not material to the Company’s consolidated financial condition or results of operations.
Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement
In September 2008, the FASB issued EITF Issue No. 08-5 (“EITF No. 08-5”), “Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement.” This FSP determines an issuer’s unit of accounting for a liability issued with an inseparable third-party credit enhancement when it is measured or disclosed at fair value on a recurring basis. FSP EITF No. 08-5 is effective on a prospective basis in the first reporting period beginning on or after December 15, 2008. The Company is currently assessing the impact of FSP EITF No. 08-5 on its consolidated financial position and results of operations.
Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161
In September 2008, the FASB issued FSP FAS No. 133-1, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161.” This FSP amends FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” to require disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument. The FSP also amends FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” to require and additional disclosure about the current status of the payment/performance risk of a guarantee. Finally, this FSP clarifies the Board’s intent about the effective date of FASB Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” ;FSP FAS No. 133-1 is effective for fiscal years ending after November 15, 2008. The Company is currently assessing the impact of FSP FAS No. 133-1 on its consolidated financial position and results of operations.
Endowments of Not-for-Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for all Endowment Funds
In August 2008, the FASB issued FSP FAS No. 117-1, “Endowments of Not-for-Profit Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”), and Enhanced Disclosures for all Endowment Funds.” The intent of this FSP is to provide guidance on the net asset classification of donor-restricted endowment funds. The FSP also improves disclosures about an organization’s endowment funds, both donor-restricted and board-designated, whether or not the organization is subject to the UPMIFA. FSP FAS No. 117-1 is effective for fiscal years ending after December 31, 2008. Earlier application is permitted provided that annual financial statements for that fiscal year have not been previously issued. The Company is currently assessing the impact for FSP FAS No. 117-1 on its consolidated financial position and results of operations.
8
Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities
In June 2008, the FASB issued EITF Issue No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” EITF No. 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. The EITF 03-6-1 affects entities that accrue dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the award. EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of EITF 03-6-1 on its consolidated financial position and results of operations.
Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an entity's Own Stock
In June 2008, the FASB ratified EITF Issue No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity's Own Stock.” EITF 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact of EITF 07-5 on its consolidated financial position and results of operations.
Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of FASB Statement No. 60”. This statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. SFAS No. 163 also clarifies how SFAS No. 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities to increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for some disclosures about the insurance enterprise’s risk-management activities of the insurance enterpr ise be effective for the first period (including interim periods) beginning after issuance of SFAS No. 163. Except for those disclosures, earlier application is not permitted.
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)
In May 2008, the FASB issued FSP Accounting Principles Board (“APB”) Opinion No. 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).” The FSP clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations. The FSP requires retrospective application to the terms of instruments as they existed fo r all periods presented. The FSP is effective for fiscal years beginning after December 15, 2008 and early adoption is not permitted. The Company is currently evaluating the potential impact of FSP APB 14-1 upon its consolidated financial statements.
The Hierarchy of Generally Accepted Accounting Principles
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles". The implementation of this standard will not have a material impact on the Company's consolidated financial position and results of operations.
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Determination of the Useful Life of Intangible Assets
In April 2008, the FASB issued FSP FAS No. 142-3, “Determination of the Useful Life of Intangible Assets”, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under SFAS No. 142 “Goodwill and Other Intangible Assets”. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of the expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007) “Business Combinations” and other U.S. generally accepted accounting principles. The Company is currently evaluating the potential impact of FSP FAS No. 142-3 on its consolidated financial statements.
Disclosure about Derivative Instruments and Hedging Activities
In March 2008, the FASB issued SFAS No. 161,“Disclosure about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133.” This statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The Company is required to adopt SFAS No. 161 on January 1, 2009. The Company is currently evaluating the potential impact of SFAS No. 161 on the Company’s consolidated financial statements.
Delay in Effective Date
In February 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of FASB Statement No. 157”. This FSP delays the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The impact of adoption was not material to the Company’s consolidated financial condition or results of operations
NOTE 2 - DUE TO RELATED PARTY
As of December 31, 2008, a related party advanced the Company a total of $119,792. The amounts are payable upon demand and bear interest at a rate of 6% per annum accrued interest at December 31, 2008 amounted to $7,543.
NOTE 3 – EQUITY
During the year ended March 31, 2007, the Company issued a total of 800,000 shares of common stock value at $41,800 for professional services.
In November 2007, the Company settled litigation with a third party for legal fees. The Company paid the third party $30,000 cash and issued 2,000,000 shares of common stock valued at $40,000.
On July 31, 2008, the Company issued 10,000,000 shares of common stock valued at $20,000, as compensation for services.
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ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The previous discussion and other sections of this Form 10-Q contain forward-looking statements. These forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and actual actions or results may differ materially. These statements are subject to certain risks, uncertainties and assumptions that are difficult to predict. The Company undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise, unless required by law. Readers should carefully review the risk factors included in other reports or documents filed by the Corporation from time to time with the Securities and Exchange Commission.
History and Development of Vision Global Solutions, Inc.
Outer Edge Holdings, Inc.
Outer Edge Holdings, Inc. ("Outer Edge") was incorporated under laws of the Province of Ontario. Outer Edge was incorporated as "Consumer General Inc." on September 9, 1988. On March 29, 1999, Outer Edge amalgamated with 1345166 Ontario Inc. to form and continue under the name "Outer Edge Holdings Inc." Outer Edge had no subsidiaries or affiliates.
Immediately prior to the amalgamations discussed below, Outer Edge did not conduct any business other than owing certain debts to 1397629 Ontario Inc. 1397629 Ontario Inc. was incorporated under the laws of the Province of Ontario as a private company according to the laws of that jurisdiction. 1397629 Ontario was incorporated on September 9, 1999. Immediately prior to the amalgamations discussed below, 1397629 Ontario did not carry on any active business other than holding certain debts owed by Outer Edge.
Outer Edge Holdings Inc., 1397629 Ontario Inc. and Vision Ontario Inc. negotiated the amalgamation transaction which was formalized by three separate agreements between the parties:
1. a Pre-amalgamation agreement;
2. a Stage 1 Amalgamation agreement; and
3. a Stage 2 Amalgamation agreement.
Pursuant to the Stage 1 amalgamation agreement, Outer Edge Holdings Inc. and 1397629 Ontario Inc. amalgamated on December 13, 2000 to form OEHI Capital Inc.
The Stage 1 amalgamation negotiations between Outer Edge Holdings Inc. and 1397629 Ontario Inc. were at arm's length. There were no common officers, directors or principals between the two parties.
Pursuant to the Stage 2 amalgamation agreement, OEHI Capital Inc. and Vision Ontario Inc. amalgamated on December 20, 2000 to form Vision Global Solutions Inc., the registrant.
The Stage 2 amalgamation negotiations between OEHI Capital Inc. and Vision Ontario Inc. were at arm's length. There were no common officers, directors or principals between the two parties.
Vision Ontario, Inc. and the Vision Group
Vision Ontario Inc. was incorporated under the laws of the Province of Ontario by articles of incorporation dated October 10, 2000. Vision Ontario holds all of the issued and outstanding securities of A.R.T.I. Vision Inc., a private (Canadian) federal corporation ("A.R.T.I. Vision"), and Vision/R4 Corporation, a private (Canadian) federal corporation ("Vision R/4") (collectively referred to as the "Vision Group").
The Vision Group consists of two related companies, operating together. A.R.T.I. Vision was incorporated in 1993 to develop activity based management software. In 1996, Vision R/4 was incorporated to handle the marketing of software developed by A.R.T.I. Vision. Specifically, Vision R/4 markets data management software and provides related services. Prior to being acquired by Vision Ontario, both companies were wholly owned subsidiaries of Gestion Jean-Paul Ouellette, Inc., which supplied significant financing via loans and share capital.
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In November 2003, we changed our incorporation domicile from Ontario, Canada to Nevada. Vision Global Solutions Inc., as a Nevada corporation (the “Corporation”), was formed on November 20, 2003 and the formal transition occurred subsequent to the March 31, 2004 year end.
Termination of the Corporation’s Proposed Merger and Reorganization With Vesmark, Inc.
On October 12, 2006, the Corporation entered into an Agreement to Terminate Agreement and Plan of Merger and Reorganization by and among Vesmark, Inc., a Pennsylvania corporation, and certain shareholders of Vesmark, Inc. (the “Rescission Agreement”). As of December 14, 2006, the Corporation terminated the Agreement and Plan of Merger and Reorganization by and among Vesmark Inc., a Pennsylvania corporation (“Vesmark”), Vision Acquisition Corp. (“Merger Sub”) and the Corporation which was entered into by and among the parties on September 15, 2005 (the “Merger Agreement”). On September 15, 2005, the Corporation filed a Form 8-K with the United States Securities and Exchange Commission (the “SEC”) describing the merger contemplated by the Merger Agreement. By resolution of the Corporation, the effective date of the Rescission Agreement is December 14, 2006.
Pursuant to Section 8.1.1 of the Merger Agreement, the Merger Agreement could be terminated and the merger abandoned at any time prior to the effective date by written agreement, duly authorized by the boards of directors of the Corporation, Merger Sub and Vesmark. The effective date of the Merger Agreement was defined in the Merger Agreement as “… upon fulfillment of all conditions precedent to the merger and the filing of the Certificate of Merger contemplated by the General Corporation Law of the State of Pennsylvania”. Several conditions of closing of the merger did not occur and, therefore, the effective date of the merger contemplated in the Merger Agreement also did not occur. No assets of Vesmark were ever transferred to the Corporation and no merger was effected between the parties.
Pursuant to Article 1.3.2, Article 1.4 and Article 1.5 of the Merger Agreement, the Corporation issued and delivered to certain shareholders certain shares of Common Stock, Preferred Stock and Warrants of the Corporation (collectively, the “Stock Consideration”). Because the merger did not occur, the Stock Consideration should not have been issued and delivered. Accordingly, all Stock Consideration has been returned to the Corporation for cancellation, with the sole exception of 800,000 shares of Common Stock owned by Raymond P. Sobieralski.
Pursuant to the terms of the Merger Agreement, a Secured Promissory Note was issued on April 7, 2005 wherein the Corporation was to pay to Vesmark the principal amount of $15,000 (the “Note”). Vesmark has agreed to accept, and the Corporation has agreed to pay, $24,200 in full satisfaction of all principal, interest, and legal fees due under the Note.
The foregoing description of the Rescission Agreement is only a summary and is qualified in its entirety by reference to the copy of the Rescission Agreement filed as Exhibit 10.1 attached to the Form 8-K filed by the Corporation on December 14, 2006.
Changes in Control of the Corporation
As of December 14, 2006, the Corporation effected a change in control described more particularly in the Form 8-K filed by the Corporation on December 14, 2006. Previously, the Corporation had issued a total of 77,693,885 shares of Common Stock and had authorized 200,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. The Corporation’s former President, Jean-Paul Ouellette ("JPO"), owned 50,000,000 shares of the issued and outstanding Corporation’s Common Stock.
On November 12, 2006, the Corporation approved by Unanimous Written Consent of the Directors of the Corporation (the “UWC Terminating the Merger”) the following actions of the Corporation: (i) divestiture of all of the assets and liabilities from the Corporation to JPO according the terms of the Assignment and Assumption Agreement; (ii) transfer of all of the outstanding shares of Common Stock of Vision Ontario, Inc. and its holdings (which include Vision R/4 and A.R.T.I.) to JPO; and (iii) approval of the form of agreement to terminate the plan of merger and reorganization with Vesmark. The UWC Terminating the Merger is filed as Exhibit 99.1 to the Form 8-K filed by the Corporation on December 14, 2006 and is incorporated herein by this reference.
On November 13, 2006, the JPO and the Corporation entered into a Bill of Sale and Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”) whereby JPO assumed all of the assets and liabilities of the Corporation. The assets assumed by JPO included all of the shares of Vision R/4 Corporation, a private (Canadian) federal corporation (“Vision R/4”), and A.R.T.I. Vision Inc., a private (Canadian) federal corporation (“A.R.T.I.”) (Collectively, the “Assets”), both wholly-owned subsidiaries of the Corporation. The liabilities assumed by JPO include, but are not limited to, all of the liabilities of Vision R/4 and A.R.T.I. (the “Liabilities”). The Assets
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were valued at less than the Liabilities. The Assignment and Assumption Agreement is filed as Exhibit 10.2 to the Form 8-K filed by the Corporation on December 14, 2006 and is incorporated herein by this reference.
On November 14, 2006, JPO combined his interest with the interests owned by the following persons: Dwayne Bigelow (“DBW”), owner of 420,000 shares of the Common Stock of the Corporation; Andrew Belinsky (“ABY”), owner of 760,000 shares of the Common Stock of the Corporation; Angela Musgrave (“AMV”), owner of 760,000 shares of the Common Stock of the Corporation; Jasago Partners, Inc. (“JASAGO”), owner of 800,000 shares of the Common Stock of the Corporation; and Amazon Energy & Communications, Inc. (“AMAZON”), owner of 1,300,000 shares of the Common Stock of the Corporation for a total of 54,040,000 shares (collectively, the sellers are referred to herein as the “Sellers” and their shares are collectively referred to herein as the “Sellers’ Shares”). Collectively, the Sellers entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with certain buyers (the “Buyers”), descri bed below, and agreed to sell the Sellers’ Shares to the Buyers for $650,000. The Share Purchase Agreement is filed as Exhibit 99.2 to the Form 8-K filed by the Corporation on December 14, 2006 and is incorporated herein by this reference.
On December 14, 2006, by Unanimous Written Consent (the “UWC Setting the Effective Date”) the Corporation established the effective date of the change of control of the Corporation as December 14, 2006 (the “Effective Date”). In the UWC Setting the Effective Date, the Corporation also accepted the resignation of JPO as the sole director of the Corporation and appointed Mr. John Kinney as the new sole director of the Corporation. The UWC Setting the Effective Date is filed as Exhibit 99.3 to the Form 8-K filed by the Corporation on December 14, 2006 and is incorporated herein by this reference.
The foregoing descriptions of the UWC Terminating the Merger, the Assignment and Assumption Agreement, the Share Purchase Agreement, and the UWC Setting the Effective Date are only summaries and are qualified in their entirety by reference to the copies of the agreements filed as Exhibits 99.1, 10.2, 99.2, 99.3 to the Form 8-K filed by the Corporation on December 14, 2006.
Resignation and Release of JPO
Jean-Paul Ouellette executed a Resignation and Release as a partial step in the Change of Control of the Registrant described above (the “Resignation and Release”) that effected JPO’s resignation as director, officer and employee of the Corporation effective upon the date that JPO received notice from a majority of Shareholders and released the Corporation from any and all claims JPO has ever had against the Corporation that are related to his employment for or service to the Corporation. JPO received such notice on December 14, 2006. The Resignation and Release is filed as Exhibit 10.3 to the Form 8-K filed by the Corporation on December 14, 2006 and is incorporated herein by this reference.
Immediately after the appointment of Mr. John Kinney as the sole Director of the Corporation by the UWC Setting the Effective Date described above, the Corporation, by Unanimous Written Consent of the Board of Directors, appointed Mr. Kinney as the President and Chief Executive Officer of the Corporation (the “UWC Appointing the CEO”). By operation of the Corporation’s Bylaws, Mr. Kinney also serves as the Corporation’s Principal Accounting Officer. As of December 14, 2006, Mr. John Kinney executed an Employment Agreement (the “Employment Agreement”) with the Corporation to establish his compensation at 25,000 shares of Common Stock of the Corporation in exchange for Mr. Kinney’s services to the Corporation as its President, Chief Executive Officer and Sole Director for up to two years or until the Corporation is merged with an operating company. TheUWC Appointing the CEO and the Employment Agreement are filed as an Exhibits 99 .4 and 10.4, respectively, to the Form 8-K filed by the Corporation on December 14, 2006 and are incorporated herein by this reference.
John Kinney, 48, now serves as the Chairman of the Board of Directors, Chief Executive Officer, President, Secretary and Principal Accounting Officer of the Corporation. From 2005 until the present, Mr. Kinney has served on the Board of Directors of Yosemite National Institute, a not-for-profit corporation. In July 2006, Mr. Kinney co-founded Green Life International, an Argentinean bio-fuels company, and currently serves on its Board of Directors. In 2005, Mr. Kinney served as interim Chief Executive Officer of Zoltar Satellite Alarm Systems, Inc. and continues to serve on its Board of Directors. In 1987 Mr. Kinney joined Club Resources, Inc. as its Chief Executive Officer. Club Resources, Inc. is a club management and investment firm based in Tiburon, California. From 1990 until 2003, Mr. Kinney was the founding Chief Executive Officer of Club One, Inc., which owns and operates over 100 athletic clubs. Mr. Kinney remains as the largest common shareholder of Club One, Inc. Mr. Kinney i s a firefighter for the Tiburon Volunteer Fire Department. In 1981, Mr. Kinney received his Bachelor's degree in Human Biology, in 1983 a Master of Science in Industrial Engineering, and in 1984 a Masters in Business Administration from Stanford University.
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The foregoing descriptions of the Resignation and Release, the UWC Appointing the CEO and the Employment Agreement are only summaries and are qualified in their entirety by reference to the copies of the agreements filed as Exhibits 10.3, 99.4 and 10.4 attached to the Form 8-K filed by the Corporation on December 14, 2006. Vision's Global Solutions Inc. principal executive offices are located at 20400 Stevens Creek Blvd., Suite 700, Cupertino, California 95014; telephone (408) 873-0400.
Merger with Fortes
On May 14, 2008, the Corporation, VGS Acquisition Corp., a Delaware corporation and our wholly-owned subsidiary (“VGS”), and Fortes Financial, Inc. (“Fortes”), entered into an Agreement and Plan of Reorganization,pursuant to which VGS would merge with and into Fortes, with Fortes being the surviving corporation and becoming our wholly-owned subsidiary. This agreement was amended and restated by the parties on August 4, 2008 (as amended, the “Merger Agreement”). These agreements were filed as Exhibits to the Form 8-K’s filed by the Corporation on May 14, 2008, and August 8, 2008, respectively.
On November 4, 2008, the parties mutually terminated the Merger Agreement, and executed a release extinguishing themselves from all claims, obligations, rights and responsibilities arising from the merger transaction. The Corporation filed a Current Report on Form 8-K describing the termination of the merger, and the Termination and Release Agreement was attached as Exhibit 2.1 thereto.
Results of Operations
As a result of the Corporation’s termination of its merger agreement with Fortes as described herein, the Merger will not occur. Accordingly, the Corporation has no business operations and no assets or liabilities. We believe that the Corporation is a “shell” corporation as that term is defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act, as well as SEC Release Number 33-8407. The term "shell company" means a registrant, other than an asset-backed issuer, that has no or nominal operations, and either: (i) no or nominal assets; (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets. As a “shell” corporation as that term is defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act, as well as by SEC Release Number 33-8407, the Corporation had no revenues from operations in the last two years. &n bsp;
As a shell corporation, the Corporation has pursued potential business combination transactions with existing private business enterprises like Fortes that might have a desire to take advantage of the Corporation's status as a public corporation. If such a transaction is not completed, the Corporation does not anticipate that its available cash resources and cash generated from operations will be sufficient to meet its presently anticipated capital needs for the next twelve months.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 4.
CONTROLS AND PROCEDURES
a)
Evaluation of Disclosure Controls and Procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Disclosure controls and procedures are the controls and other procedures that we designed to ensure that we record, process, summarize and report in a timely manner the information we must disclose in reports that we file with or submit to the Securities and Exchange Commission under the Exchange Act. Based on this evaluation, ourChief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and
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communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
b)
Changes in Internal Control over Financial Reporting.
During the Quarter ended December 31, 2008, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II--OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
The Corporation is not a party to any material pending legal proceedings, and to the best of our knowledge, no such proceedings by or against the Corporation have been threatened.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On July 31, 2008, the Corporation issued 10,000,000 shares of Company common stock to The Krueger Group, LLP, counsel for the Corporation, as compensation for services associated with preparing the Corporation for the merger with Fortes. These shares were issued pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
None.
ITEM 5.
OTHER INFORMATION
None.
ITEM 6.
EXHIBITS
(a) Exhibits:
2.1 |
| Amended and Restated Agreement and Plan of Reorganization, dated August 4, 2008, by and among Vision Global Solutions, Inc., VGS Acquisition Corp. and Fortes Financial, Inc. (Incorporated by reference to the Current Report on Form 8-K filed on August 8, 2008) |
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2.2 |
| Termination and Release Agreement, dated as of November 4, 2008, by and among Vision Global Solutions, Inc., VGS Acquisition Corp. and Fortes Financial, Inc. (Incorporated by reference to the Current Report on Form 8-K filed on November 5, 2008) |
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| Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
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| Certification Statement of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
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| Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
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| Certification Statement of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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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.
Date: February 13, 2009
| VISION GLOBAL SOLUTIONS INC. | |
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| By: | /s/ JOHN KINNEY |
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| JOHN KINNEY |
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| Chief Executive Officer and |
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