U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 2005
Commission File Number: 0-29987
GLOBAL LINKS CORP.
(Exact name of small business issuer as specified in its charter)
Nevada | 88-0106514 | |||
(State or other jurisdiction Employer of incorporation or organization) | (IRS Identification No.) |
3571 East Sunset Road,
Las Vegas, Nevada
(Address of principal executive offices)
89120 | (702) 436-7007 | |||
(Zip Code) | (Issuer's Telephone Number) |
(Former name, former address and former fiscal year, |
if changed since last report) |
Check whether the issuer
(1) filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes x No ¨.
The number of shares of the registrant's issued and outstanding stock as of January 30, 2006 was 5,078,362 shares of common, 15,000,000 shares of series B preferred stock.
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The unaudited consolidated financial statement for the Global Links Corp. and it’s wholly owned subsidiaries, Capitol Group Holdings Corp. and Global Links Construction Corp. for the three and nine month periods ended September 30, 2005, is attached here.
Global Links Corp
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2005
(Unaudited)
ASSETS | 2005 | |||
CURRENT ASSETS | ||||
Cash | $ | 78,672 | ||
Receivables | 203 | |||
Note receivable, related party | 500 | |||
Prepaid expenses | 334 | |||
Total Current Assets | 79,709 | |||
PROPERTY AND EQUIPMENT | ||||
Land | 502,767 | |||
Building | 1,389,636 | |||
Building improvements | 269,880 | |||
Equipment | 7,948 | |||
Furniture and fixtures | 56,251 | |||
Accumulated depreciation | (80,203 | ) | ||
Total Property and Equipment | 2,146,279 | |||
OTHER ASSETS | ||||
Land held for development | 3,765,500 | |||
Deposits | 2,000 | |||
Option deposits to purchase land for expansion | 77,830 | |||
Total Assets | $ | 6,071,318 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
CURRENT LIABILITIES | ||||
Accounts payable | $ | 212,823 | ||
Property tax payable | 3,876,000 | |||
Unearned revenue | 325,000 | |||
Current portion of debt, net of unamortized costs of $35,946 | 352,881 | |||
Accrued interest on loans and notes | 52,000 | |||
Total Current Liabilities | 4,818,704 | |||
LONG TERM LIABILITIES | ||||
Debt, net of unamortized costs of $201,612 | 1,058,110 | |||
Rent deposit | 5,000 | |||
Total Long Term Liabilities | 1,063,110 | |||
Total Liabilities | 5,881,814 | |||
Commitment and Contingencies | - | |||
STOCKHOLDERS' EQUITY | ||||
Common Stock par value $0.001 (500,000,000 shares authorized, 4,678,362 issued and outstanding) | 428 | |||
Series B Preferred Stock (15,000,000 shares authorized, 15,000,000 issued and outstanding) | 15,000 | |||
Additional paid-in capital | 3,788,664 | |||
Accumulated deficit - accumulated during the development stage | (3,614,588 | ) | ||
Total Stockholders' Equity | 189,504 | |||
Total Liabilities and Stockholder’s Equity | $ | 6,071,318 |
See accompanying notes to financial statements.
Global Links Corp
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Nine Months Ended September 30, 2005
(Unaudited)
Nine months ended September 30, 2005 | Nine months ended September 30, 2004 | March 28, 2002 (inception) through September 30, 2005 | ||||||||
REVENUES | ||||||||||
Consulting fees | $ | - | $ | 100,000 | $ | 100,000 | ||||
RE Info fees | - | 408 | 408 | |||||||
Construction income | 13,800 | - | 13,800 | |||||||
Rental income | 112,901 | - | 125,676 | |||||||
Total Revenues | 126,701 | 100,408 | 239,884 | |||||||
COST OF SALES | 12,514 | 50,000 | 137,514 | |||||||
GROSS MARGIN | 114,187 | 50,408 | 102,370 | |||||||
EXPENSES | ||||||||||
General and administrative | 127,324 | 50,257 | 331,533 | |||||||
Employee and director compensation | 171,785 | 465,748 | 770,265 | |||||||
Consulting fees | 91,643 | 953,555 | 1,689,699 | |||||||
Professional fees | 61,644 | 129,857 | 218,092 | |||||||
Property tax expense | 34,772 | 15,000 | 427,772 | |||||||
Research and development | - | 125,000 | 125,000 | |||||||
Depreciation and amortization | 63,427 | 1,098 | 80,203 | |||||||
Total Expenses | 550,595 | 1,740,515 | 3,642,564 | |||||||
OTHER INCOME (EXPENSE) | ||||||||||
Interest Income | 12 | 104 | 116 | |||||||
Interest Expense | (214,586 | ) | (109,404 | ) | (392,347 | ) | ||||
Total Other Income (Expense) | (214,574 | ) | (109,300 | ) | (392,231 | ) | ||||
NET LOSS BEFORE | (650,982 | ) | (1,799,407 | ) | (3,932,425 | ) | ||||
Discontinued Operations, net | - | (29,153 | ) | (116,071 | ) | |||||
Gain on the Sale of an Asset | - | - | 433,908 | |||||||
Net Loss | $ | (650,982 | ) | $ | (1,828,560 | ) | $ | (3,614,588 | ) | |
Net Loss per Common Share, Basic and Diluted | $ | (0.176 | ) | $ | (1,526.34 | ) | $ | (13.724 | ) | |
Earnings per share before discontinued operations | $ | (0.176 | ) | $ | (1,502.01 | ) | $ | (14.931 | ) | |
Earnings per share of discontinued operations | - | $ | (24.33 | ) | $ | 1.207 | ||||
Weighted Average per common shares outstanding, basic and diluted adjusted for previous splits. | 3,693,530 | 1,198 | 263,379 |
See accompanying notes to financials statements.
Global Links Corp
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended September 30, 2005
(Unaudited)
Three Months Ended September 30, 2005 | Three Months Ended September 30, 2004 | ||||||
REVENUES | |||||||
Consulting fees | $ | - | $ | 100,000 | |||
RE Info fees | - | 408 | |||||
Construction income | 13,800 | - | |||||
Rental income | 40,391 | - | |||||
Total Revenues | 54,191 | 100,408 | |||||
COST OF SALES | 12,514 | 50,000 | |||||
GROSS MARGIN | 41,677 | 50,408 | |||||
EXPENSES | |||||||
General and administrative | 41,534 | 36,102 | |||||
Employee and director compensation | 56,085 | 53,059 | |||||
Consulting fees | 33,093 | 167,815 | |||||
Professional fees | 12,159 | 37,378 | |||||
Property tax expense | 14,956 | 5,000 | |||||
Research and development | - | 125,000 | |||||
Depreciation and amortization | 21,387 | 386 | |||||
Total Expenses | 179,214 | 424,740 | |||||
OTHER INCOME (EXPENSE) | |||||||
Interest income | - | 8 | |||||
Interest expense | (64,481 | ) | (84,322 | ) | |||
Total Other Income (Expense) | (64,481 | ) | (84,314 | ) | |||
NET LOSS BEFORE | (202,018 | ) | (458,646 | ) | |||
Discontinued Operations, net | - | (22,255 | ) | ||||
Net loss | $ | (202,018 | ) | $ | (480,901 | ) | |
Net Loss per Common Share, Basic and Diluted | $ | (0.046 | ) | $ | (223.47 | ) | |
Earnings per share before discontinued operations | $ | (0.046 | ) | $ | (213.13 | ) | |
Earnings per share of discontinued operations | $ | - | $ | (10.34 | ) | ||
Weighted Average per common shares outstanding, basic and diluted adjusted for previous splits. | 4,382,709 | 2,152 |
See accompanying notes to financials statements.
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30, 2005 | Nine Months Ended September 30, 2004 | March 28, 2002 (inception) through September 30, 2005 | ||||||||
OPERATING ACTIVITIES | ||||||||||
Net Loss | $ | (650,982 | ) | $ | (1,828,560 | ) | $ | (3,614,588 | ) | |
Adjustments to reconcile Net Loss to Cash provided (used) by operating activities: | ||||||||||
Depreciation and amortization | 63,427 | 1,098 | 80,203 | |||||||
(Gain) on sale of subsidiary | - | - | (433,908 | ) | ||||||
Amortization of beneficial conversion feature | 121,510 | 50,326 | 214,075 | |||||||
Consulting and legal fees paid via stock | 27,450 | 397,215 | 1,442,147 | |||||||
Employee stock incentive | 21,335 | - | 305,539 | |||||||
Changes in operating assets and liabilities: | ||||||||||
(Increase) in prepaid expenses | (91 | ) | - | (334 | ) | |||||
(Increase) in accounts receivable | (203 | ) | (5,165 | ) | (203 | ) | ||||
(Increase) decrease in deposits | - | (2,000 | ) | (2,000 | ) | |||||
Increase in accounts payable | 23,485 | 68,334 | 212,823 | |||||||
Increase in unearned revenue | 275,000 | 50,000 | 325,000 | |||||||
Increase in rent deposits | - | - | 5,000 | |||||||
(Decrease) increase in accrued liabilities | 23,256 | 24,000 | 479,772 | |||||||
(Decrease) in payable to officer | (12,052 | ) | - | - | ||||||
Net increase in assets/liabilities of discontinued operations | - | 28,897 | 398,909 | |||||||
Net cash (used) by Operating Activities | $ | (107,865 | ) | $ | (1,215,855 | ) | $ | (587,565 | ) | |
INVESTMENT ACTIVITIES | ||||||||||
Cash paid for property, plant and equipment | $ | (8,518 | ) | $ | (750,713 | ) | $ | (955,000 | ) | |
Cash paid for options to purchase land expansion | (61,143 | ) | - | (77,830 | ) | |||||
(Increase) in land held for development | (2,500 | ) | - | (2,500 | ) | |||||
Proceeds from sale of subsidiary | - | - | 35,000 | |||||||
Net cash (used) by investment activities | $ | (72,161 | ) | $ | (750,713 | ) | $ | (1,000,330 | ) |
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
CONTINUED
Nine Months Ended September 30, 2005 | Nine Months Ended September 30, 2004 | March 28, 2002 (inception) September 30, 2005 | ||||||||
FINANCING ACTIVITIES | ||||||||||
Cash proceeds from debt | $ | 67,000 | $ | 118,117 | $ | 207,000 | ||||
Cash paid to reduce debt | (23,211 | ) | - | (490,084 | ) | |||||
Officer compensation paid via stock | - | 11,665 | 37,540 | |||||||
Release of common stock receivable | 22,501 | - | - | |||||||
Cash proceeds from sale of common stock | 188,569 | 1,915,877 | 1,912,611 | |||||||
(Decrease) increase in payable/loan to officer | (500 | ) | (35,923 | ) | (500 | ) | ||||
Net cash provided by Financing Activities | $ | 254,359 | $ | 2,009,736 | 1,666,567 | |||||
Increase (decrease) in cash | 74,333 | 43,168 | 78,672 | |||||||
Cash at beginning of period | 4,339 | 1,213 | - | |||||||
Cash at end of period | $ | 78,672 | $ | 44,381 | $ | 78,672 | ||||
- | - | - | ||||||||
SUPPLEMENTAL DISCLOSURE | ||||||||||
Cash payment for interest | $ | 76,213 | $ | 93,612 | $ | 169,824 | ||||
Cash payment for income tax | $ | - | $ | - | $ | - | ||||
Non cash investing and financing activities | ||||||||||
Beneficial conversion feature | $ | - | $ | - | $ | 451,633 | ||||
Note for Sunset building | $ | - | $ | 1,280,000 | $ | 1,280,000 | ||||
Shares issued for land held for development | $ | - | $ | - | $ | 950,000 | ||||
Shares issued for conversion of debt | $ | - | $ | - | $ | 18,987 | ||||
Shares issued for the merger with Capitol Group | $ | - | $ | - | $ | 116,378 |
See accompanying notes to the financial statements.
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Note 1 - Basis of Presentation
The accompanying consolidated balance sheet of Global Links Corp (the "Company”), (a development stage enterprise) and its wholly owned subsidiaries, Capitol Group Holdings Corp. and Global Links Construction Corp. at September 30, 2005, and the condensed consolidated statements of operations for the three and nine month periods ended September 30, 2005 and 2004 have been prepared by the Company’s management. In addition management also prepared the cumulative period during the development stage from March 28, 2002 (inception) through September 30, 2005 and the statement of cash flows for the nine month periods ended September 30, 2005 and 2004 and the cumulative period during the development stage through September 30, 2005. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The unaudited financial statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's Form 10-KSB for the year ended December 31, 2004.
Comparative numbers for the three and nine month periods ended September 30, 2004, and the Inception to Date data have been restated to include Capitol Group Holdings financial results as though the acquisition/merger had taken place at the date of inception in the year 2002. Operations of the Company's wholly owned subsidiary, Global Links Card Services, have been classified as Discontinued Operations due to its sale in December, 2004.
Operating results for the three and nine month periods ended September 30, 2005, are not necessarily indicative of the results that can be expected for the year ending December 31, 2005.
Reclassifications
Certain reclassifications, which have no effect on net income, have been made in the prior period financial statements to conform to the current presentation.
Significant Accounting Policies
Revenue Recognition
Revenue for the Valle Vista development in Kingman, AZ is recorded when the sales of homes are completed and ownership has transferred. Option deposits are received prior to the completion and ownership transfer of homes.
Rental income is recorded in the month it is earned.
Start Up Costs
Costs and expenses associated with entry into new homebuilding markets and opening new communities in existing markets are expensed when incurred.
New Accounting Pronouncements
In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment." SFAS No. 123R replaced SFAS No. 123 and superseded Accounting Principles Board Opinion No. 25. SFAS No. 123R will require compensation costs related to share-based payment transactions to be recognized in the financial statements. The effective date of SFAS No. 123R is the first reporting period beginning after June 15, 2005. The adoption of SFAS No. 123 (revised 2004) should not have a significant impact on the Company's financial position or results of operations until such time the Company has share-based payments.
On April 14, 2005, the Securities and Exchange Commission issued an announcement amending the compliance dates for the FASB's SFAS 123R that addresses accounting for equity based compensation arrangements. Under SFAS 123R registrants would have been required to implement the standard as of the beginning of the first interim or annual period that begins after June 15, 2005. The Commission's new rule will allow companies to implement SFAS 123R at the beginning of the next fiscal year after June 15, 2005. The Company anticipates adopting SFAS 123R in the first quarter 2006.
Note 3 - Land Held for Development
Capitol Group Holdings Corp., a wholly owned subsidiary of the Company acquired 1,000 lots in Mojave County Arizona. The lots are part of a development named Valle Vista Ranch, planned as an affordable, energy efficient senior development. The entire project is made up of a total of 1,624 lots. The additional 624 lots not currently owned by the Company may be acquired by the Company at a later date.
Note 4 - Unearned Revenues
In 2004, the Company received an advance payment of $50,000 related to the future access to the Company's RE Info Internet site. Since the site has not been available for use, the payment is treated as unearned until such time as the site is operational. When the site is operational the advance payment will be recognized as revenue over a two month period.
In the period ended September 30, 2005, the Company received $275,000 in payments of options to acquire houses in the Company's Arizona project. The revenues from the sale of these option deposits will not be recognized until earned.
Note 5 - Notes Payable and Other Payables
In the quarter ended September 30, 2005 the Company did not incur additional Notes Payable or other Payables.
Adjustments to the prior period financial statements have been made to reflect the beneficial conversion feature of two debt instruments. The total beneficial conversion feature calculated is equal to $451,633. The total unamortized balance for the beneficial conversion is $237,558. The period ended and the corresponding interest expense is as follows:
Period ended | Amount of Interest Expense | |||
June 30, 2004 | $ | 10,549 | ||
September 30, 2004 | 39,777 | |||
December 31, 2004 | 42,239 | |||
March 31, 2005 | 41,321 | |||
June 30, 2005 | 41,780 | |||
September 30, 2005 | 38,409 | |||
Total | $ | 214,075 |
Note 6 - Common Stock
In January of 2005, the company issued an additional 500,000,000 shares of stock registrations on form S-8 registering shares, for the Company's Employee Stock Incentive Plan and also issued an additional 100,000,000 shares in S-8 registering shares for non-employees. During the third quarter of 2005 the Company also recalled stock due to contractual obligations not being met by a consultant for services. The table below represents the number of shares issued, dollar value of those shares, and registered shares remaining at September 30, 2005.
Nine months ended September 30, 2005 | Number of shares | Shares Dollars | Bonus portion | Shares at the beginning of period | Shares at the end of period | |||||||||||
S-8 Reg. Employee | 162,720,000 | $ | 3,339,611 | $ | 25,770 | 46,000,000 | 383,280,000 | |||||||||
S-8 Reg. Non-Employee | 21,200,000 | $ | 24,000 | $ | - | 3,000,000 | 81,800,000 |
The table below represents the number of shares and dollar value of shares issued for cash and for services during the three month period ended September 30, 2005.
Shares issued during the three month period of September 30, 2005 | Number of Shares | Dollars | Bonus Portion | |||||||
S-8 regular employee | 400,000 | $ | 26,152 | $ | 2,906 |
Note 7 - Preferred Stock
There are currently 15,000,000 shares of Series B Preferred Stock of the Company Outstanding. Amongst other rights, each holder of Series B Preferred Stock are entitled to twenty (20) common stock equivalent votes for each share of Series B Stock held at the record date for the determination of stockholders entitled to vote on any matter at any shareholders meeting of the Company.
In the quarter ended March 31, 2005, the Company established two additional series of preferred stock, Series D and Series E. In addition, the Company has reserved a Series C which has not been defined as of the date of this report.
The Series D preferred stock, authorized for 5,000,000 shares, has the following rights and preferences:
· | Series D Stock and Common Stock Liquidation Amount: $0.001/per share |
· | Designation: 5,000,000 shares Dividends: Due each year on January 31, equal to 6% of the indebtedness represented by the Preferred "D" stock outstanding, in addition, in the same manner as any declared for Common Stock. |
· | Voting Power: The Preferred "D" stockholders have no voting rights on any matter submitted to the shareholders of the Company. |
· | Voluntary: may be converted into shares of fully paid and non assessable shares of Common Stock on the basis of 50% of the established price of Common Stock divided by $0.10 times the number of shares of Preferred "D" held |
· | Extraordinary Common Stock Events: Conversion rate to be adjusted by any split of the Company's Common stock. |
· | Fractional Shares: none shall be issued |
· | Partial Conversion: allowed |
· | Reservation of Common Stock: Company shall keep available out of its authorized but un-issued shares of Common Stock such shares necessary for effecting the conversion of the shares of Preferred "D", sufficient to effect the conversion of all outstanding shares of Preferred "D" |
The Series E stock authorized for 20,000,000 shares has the following rights and Preferences:
· | Series E Stock and Common Stock Liquidation Amount: $0.001/per share |
· | Designation: 20,000,000 shares |
· | Dividends: Due each year on January 31, equal to 6% of the indebtedness represented by the Preferred "E" stock outstanding, in addition, in the same manner as any declared for Common Stock. |
· | Voting Power: The Preferred "E" stockholders have no voting rights on any matter submitted to the shareholders of the Company. |
· | Voluntary: may be converted into shares of fully paid and non-assessable shares of Common Stock on the basis of 80% of the established price of Common Stock divided by $0.10 times the number of shares of Preferred "E" held |
· | Extraordinary Common Stock Events: Conversion rate to be adjusted by any split of the Company's Common stock. |
· | Fractional Shares: none shall be issued |
· | Partial Conversion: allowed |
· | Reservation of Common Stock: Company shall keep available out of its authorized but un-issued shares of Common Stock such shares necessary for effecting the conversion of the shares of Preferred "E", sufficient to effect the conversion of all outstanding shares of Preferred "E" |
No shares of the Series D or E preferred stock have been issued as of September 30, 2005.
Note 8 - Income taxes
The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are recognized and measured using enacted tax rates at the balance sheet date. Deferred tax expense or benefit is the result of changes in deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce net deferred taxes to amounts that is more likely than not to be realized. It appears that it is more likely than not, that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward period.
Note 9 - Commitments and Contingencies
During the second quarter, First American Title has filed suit against the Company claiming failure to pay contractual obligations for the Company's R-E Info project. The Company expects to settle the suit by payment of an amount not in excess of $100,000 which has been accrued as a current payable in these financial statements. Accordingly, the Company has determined not to accrue additional amounts. The current contract with American Title requires monthly payments of $25,000 per month. If the Company is required to eventually pay this $225,000 for the nine months ended September 30, 2005, the net effect of the additional payment would be as follows:
Net loss as reported | $ | (650,982 | ) | |
Additional cost of R-E Info information | (225,000 | ) | ||
Net loss adjusted for additional costs | (875,982 | ) | ||
Net loss per common share (3,693,530 shares) | $ | (0.237 | ) |
Note 10 - Subsequent Events
The Company did not issue shares in the fourth quarter of 2005. The Company issued an additional 400,000 shares of Employee S-8 registered stock during the first quarter of 2006.
The following discussion should be read in conjunction with the Financial Statements and notes thereto included herein.
THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DISCUSSION CONTAINING SUCH FORWARD-LOOKINGSTATEMENTS MAY BE FOUND IN THE MATERIAL SET FORTH BELOW AND UNDER "BUSINESS," AS WELL AS WITHIN THE ANNUAL REPORT GENERALLY. IN ADDITION, WHEN USED IN THIS ANNUAL REPORT, THE WORDS "BELIEVES," "ANTICIPATES," "EXPECTS," "PLANS," "INTENDS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS AND STATEMENTS OF EXPECTATIONS, PLANS AND INTENT IS SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES. ACTUAL RESULTS IN THE FUTURE COULD DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS, AS A RESULT, AMONG OTHER THINGS, OF CHANGES IN TECHNOLOGY, CUSTOMER REQUIREMENTS AND NEEDS. WE UNDERTAKE NO OBLIGATION TO RELEASE PUBLICLY THE RESULTS OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT ANY FUTURE EVENTS OR CIRCUMSTANCES.
Because the Company lacks capital, an investment in it involves a very high degree of risk.
Results of the three months ended versus the three months ended of the prior period
For the three month period ended September 30, 2005, the Company recorded $40,391 in rental income and $13,800 recorded as construction income resulting in Total Revenues of $54,191. For the same period in 2004, the Company recorded consulting fees of $100,000, R-E Info fee revenue of $408, and no rental revenue, resulting in Total Revenues of $100,408, a decrease in revenue of $46,217 from the current period. The rental revenue in the forth quarter of 2004 was due to the acquisition and rental of the Company's Sunset Office Building. During the same period the Company recorded $41,677 in gross margin, compared to $50,408 in 2004. The components of total revenues reported during 2005 consists of rental and construction income, whereas the components for the same period of 2004 consists of consulting fees and RE Info fees. As of September 30, 2005 the Company had no research and development costs compared to $125,000 during the same period of 2004. The Company also recorded $179,214 in total expenses and $424,740 during the same period in 2004, a reduction of total expenses in the amount of $245,526.
Results of the nine months ended versus the nine months ended of the prior period
For the nine month period ended September 30, 2005, the Company recorded $112,901 in rental income, and $13,800 of construction income resulting in Total Revenues of $126,701. For the same period in 2004, the Company recorded consulting fees of $100,000, R-E info fess of $408, no rental revenues recorded, resulting in total revenue of $100,408, an increase in revenue of $26,293. The increase in rental income was also due to the acquisition and rental of the Company's Sunset Office Building. During the same period the Company recorded $114,187 in gross margin, compared to $50,408 in 2004, an increase in margin of $63,779. The Company also recorded $550,595 in total expenses and $1,740,515 during the same period in 2004. A reduction in total expenses in the amount of $1,189,920. The reduction in total expenses was due to decreased consulting fees in the amount of $861,912.
Liquidity
As of September 30, 2005, the Company does not have sufficient cash to meet the projected needs for the next twelve months and will therefore need to raise additional capital. The Company expects to raise such cash needs by additional borrowing, the sale of the Company's common and/or preferred stock, and the sale of selected parcels in its Arizona development project.
The Company expects to spend $60,000 in additional research and development funds on its R-E Info website, with the site fully operational by the end of 2006.
On March 22, 2005 the Company was issued a refund and cancelled plans to acquire the Utah real estate as disclosed in filed Form 8K. This is due to the strain that has been placed on the Company by the naked shorting that occurred in February and March of this year.
The Company owns 1,000 residential lots in Arizona, which are planned for development in 2006. The project is expected to require $3,000,000 to begin the development. The company expects to raise the required financing through additional borrowing and/or equity financing in 2006, and through the sale of selected parcels within the project. Since the date of this report the Company has chosen a homebuilder “Silvercrest Homes”, a manufactured homebuilder, and anticipates this project breaking ground in the first quarter of 2006.
The Company has an option to acquire two adjacent lots to its office building in Las Vegas, Nevada. The project: “Global Links Corp Center” is expected to require $500,000 for the first phase, and the Company anticipates raising the required funds through additional borrowing and/or equity financing in 2006. Closing on these properties is expected to take place on or before June 30, 2006. As of September 30, 2005 the Company has an investment of $77,830 in option payments for the future project.
The Company received a copyright for "The Domain" on April 13, 2005. “The Domain” project is independent of the Kingman, AZ project. The company plans to break ground on the first phase of this project in early 2006. "The Domain", is a futuristic living environment. "The Domain” is different from most building concepts as it utilizes a rather small footprint to offer a large amount of usable living space. The footprint is approximately 4,000 square feet, which includes a 2-story 2,400 square foot living environment, as well as 1,600 square feet of private patio and yard space. "The Domain" is surrounded by 8 feet concrete walls that provide for privacy and security. The project is planned to be built in an attached townhouse fashion, with 8 units in each cluster of buildings. The Company is currently in the development phase and negotiating on several parcels of real estate throughout the Las Vegas area, which will determine the start date for implementation of this project.
The Company does not have any off-balance sheet arrangement or contractual obligations that are likely to have or are reasonably likely to have a material current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in the Company's financial statements.
Forward Looking Statements
In connection with, and because it desires to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company cautions readers regarding certain forward looking statements in the proceeding discussion and elsewhere in this report and in any other statement made by, or on the behalf of the Company, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company. The Company disclaims any obligation to update forward looking statements.
Evaluation of disclosure controls and procedures.
Our chief executive officer and chief financial officer has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934 (the "Exchange Act"), as of a date within ninety days before the filing of this quarterly report. Based on that evaluation, the chief executive officer and chief financial officer has concluded that our current disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported in the Commission's rules and forms.
Changes in internal controls.
There have not been any significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. There were no significant deficiencies or material weakness in the internal controls, and therefore no corrective actions were taken.
As of the date of this report, First American Title has filed suit against the Company claiming failure to pay contractual obligations for the Company's R-E-Info.net project. The Company will offer to settle the lawsuit and proceed with the original terms of the agreement as R-E-info.net is being rewritten and modified. There is a tremendous amount of information that has to be delivered in such a way to be useful and manageable. The Company anticipates that R-E-info.net will be re-launched by year end 2005.
a) NONE
b) NONE
c) NONE
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 LINKS CORP.
Date: January 31, 2006 | By: | /Frank Dobrucki | |
Frank Dobrucki, | |||
President, and CEO, |
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