| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:
● | History and Development of Vision Global Solutions, Inc. |
● | Liquidity and Capital Resources. |
● | Critical Accounting Estimates. |
The following discussion should be read in conjunction with the Vision Global Solutions, Inc. consolidated financial statements and accompanying notes included elsewhere in this report. The following discussion contains forward-looking statements that reflect the plans, estimates and beliefs of Vision Global Solutions, Inc Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," and similar expressions are intended to identify forward-looking statements. The actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report and in other reports we file with the Securities and Exchange Commission (“ SEC”), specifically the most recent Annual Report on Form 10-K.” 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. All references to years relate to the fiscal year ended March 31 of the particular year.
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, Inc. was incorporated on September 9, 1999. Immediately prior to the amalgamations discussed below, 1397629 Ontario, Inc. 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.
In November 2003, we changed our incorporation domicile from Ontario, Canada to Nevada, United States.
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 C orporation, 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 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&# 8221;). Collectively, the Sellers entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with certain buyers (the “Buyers”), described 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 served 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. The UWC 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.
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.
Resignation of John Kinney and Appointment of Todd Waltz
On November 3, 2009, the Corporation, by Unanimous Written Consent of the Board, elected Mr. Todd Waltz as the sole Director of the Corporation and also appointed Mr. Waltz as the President and Chief Executive Officer of the Corporation (the “UWC Appointing the CEO”). By operation of the Corporation’s Bylaws, Mr. Waltz also serves as the Corporation’s Principal Accounting Officer. As of November 4, 2009, Mr. Todd Waltz executed an Employment Agreement (the “Employment Agreement”) with the Corporation covering Mr. Waltz’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. The terms of the Employment Agreement regarding compensation will be determined by the Board of D irectors in the future. The UWC Appointing the CEO and the Employment Agreement are filed as Exhibits 2.2 and 2.3, respectively, to the Form 8-K filed by the Corporation on November 5, 2009 and are incorporated herein by this reference.
Immediately thereafter, John Kinney executed a Resignation Letter from his position as director, officer and employee of the Corporation effective as of November 3, 2009. The Resignation is filed as Exhibit 2.1 to the Form 8-K filed by the Corporation on November 5, 2009 and is incorporated herein by reference.
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 minimal cash and approximately $189,000 in accounts payable and loan payable. 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.
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.
Liquidity and Capital Resources
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 Company does not anticipate that its available cash resources and cash generated from operations will be sufficient to meet its presently anticipated working capital and capital expenditure requirements for the next twelve months. Additional funding will become necessary. There can be no assurances that the Company can realize sufficient revenues to satisfy its business plan and further, there can be no assurance that alternative sources of financing can be procured on behalf of the Company.
However, Management continues to evaluate various business opportunities for future operations and diversification
Recently Issued Accounting Pronouncements
In October 2009, the FASB has published ASU 2009-13, “Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, “Revenue Recognition-Multiple-Element Arrangements”, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation and requires that arrangement consideration be alloca ted at the inception of the arrangement to all deliverables using the relative selling price method and also requires expanded disclosures. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard did not have an impact on the Company’s financial position and results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
ITEM 4T. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Our Chief Executive Officer is responsible for establishing and maintaining disclosure controls and procedures for us as defined in Rules 13a-15(e) and 15d-(15(e) of the Securities Exchange Act of 1934. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this report, is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and to reasonably assure that such information is accumulated and communicated to our management, including our Chief Executive Officer who also acts as our principal financial and principal accounting officer, to allow timely decisions regarding required disclosure.
Our management does not expect that our disclosure controls or our internal controls will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Under the supervision and with the participation of our management, including our Chief Executive Officer who serves as our principal executive officer and our principal financial and accounting officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the period ended June 30, 2010 (the “Evaluation Date”). As of the Evaluation Date, our Chief Executive Officer who also serves as our principal financial and accounting officer, concluded that we maintain disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and re gulations, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Changes in Internal Controls
There was no change in our internal control over financial reporting identified in connection with our evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
| Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. |
| Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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.
| | Vision Global Solutions, Inc. |
| | | |
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| | By: | /s/ Todd Waltz |
| | | Todd Waltz (Principal Accounting Officer) |
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Date:August 16, 2010
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