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: June 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 of (IRS Employer
incorporation or organization) Identification No.)
3571 East Sunset Road,
Las Vegas, Nevada
(Address of principal executive offices)
89120
(Zip Code)
(702) 436-7007
---------------
(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
August 12, 2005, was 4,428,362 shares of common, 15,000,000 shares of series B
preferred stock.
1
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited consolidated financial statements for the Global Links Corp. and
its wholly owned subsidiaries, Capitol Group Holdings Corp. and Global Links
Construction Corp. for the three and six month periods ended June 30, 2005, are
attached hereto.
2
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
------
June 30, 2005 December 31, 2004
(Unaudited)
----------------- -----------------
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . $ 14,881 $ 4,339
Accounts receivable . . . . . . . . . . . . . . . 298 -
Prepaid expenses. . . . . . . . . . . . . . . . .. - 243
Deposits. . . . . . . . . . . . . . . . . . . . . 2,487 2,000
------------ ------------------
Total Current Assets . . . . . . . . . . . . . . . . 17,666 6,582
------------ ------------------
PROPERTY AND EQUIPMENT
Land. . . . . . . . . . . . . . . . . . . . . . . 550,597 541,705
Buildings, (net of depreciation of $47,455 and
$11,598) . . . . . . . . . . . . . . . . . . . 1,605,309 1,620,343
Furniture, Computers & Fixtures (net of
depreciation of $11,361 and $5,178). . . . . . 51,352 55,829
------------ -----------------
Total Property and Equipment . . . . . . . . . 2,207,258 2,217,877
------------ ------------------
OTHER ASSETS
Land held for development (see Note 2). . . . . . 3,763,000 3,763,000
------------ ------------------
3,763,000 3,763,000
------------ ------------------
Total Assets . . . . . . . . . . . . . . . . . $ 5,987,924 $ 5,987,459
============ ==================
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . . . . . . . $ 203,603 $ 189,337
Payable to and loans from officer . . . . . . . . 7,952 12,052
Property taxes payable. . . . . . . . . . . . . . 3,866,000 3,856,000
Current portion of loans payable. . . . . . . . . 1,651,377 432,398
Unearned revenues (see note 3). . . . . . . . . . 75,000 50,000
Accrued interest on loans and notes . . . . . . . 60,012 48,747
------------ ------------------
Total Current Liabilities. . . . . . . . . . . . . . 5,863,944 4,588,534
LONG TERM DEBT
Note Payable Sunset Building (net of
current portion) . . . . . . . . . . . . . . . - 1,172,362
Rent deposits . . . . . . . . . . . . . . . . . . 5,000 5,000
------------ ------------------
Total Long Term Debt . . . . . . . . . . . . . . . . 5,000 1,177,362
------------ ------------------
Total Liabilities. . . . . . . . . . . . . . . . . . 5,868,944 5,765,896
------------ ------------------
STOCKHOLDERS' EQUITY
Common Stock Par value $0.0001 (5,428,571 shares
authorized, 4,428,362 and 822,251 issued
and outstanding).(see note 5 . . . . . . . . . 443 82
Preferred Stock, Series B 100,000,000 shares
authorized, 15,000,000 outstanding
(see note 6 . . . . . . . . . . . .. . . . . . 15,000 15,000
Additional paid-in capital. . . . . . . . . . . . 3,340,466 3,100,022
Stock subscriptions receivable. . . . . . . . . . - (22,501)
Retained Deficit - accumulated during
development stage. . . . . . . . . . . . . . . (3,236,929) (2,871,040)
------------ ------------------
Total Stockholders' Equity. . . . . . . . . . . . 118,980 221,563
------------ ------------------
Total Liabilities and
Stockholders' Equity . . . . . . . . . $ 5,987,924 $ 5,987,459
============ ==================
See accompanying notes to financial statements
3
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Inception
Six Months Six Months March 28, 2002
Ended Ended Thru
June 30, 2005 June 30, 2004 June 30, 2005
------------------ ----------------- ------------------
REVENUES
Consulting fees. . . . . . . . . . . . . . . $ - $ - $ 100,000
Rental income. . . . . . . . . . . . . . . . 72,510 - 85,285
RE-Info fees . . . . . . . . . . . . . . . . - - 408
--------------- --------------- ---------------
Total Revenues. . . . . . . . . . . . . . 72,510 - 185,693
--------------- --------------- ---------------
Cost of goods sold
Cost of RE-Info information. . . . . . . . . - - 125,000
--------------- --------------- ---------------
Gross profit. . . . . . . . . . . . . . . . . . 72,510 - 60,693
EXPENSES
General and administrative . . . . . . . . . 102,035 401,077 875,733
Officer compensation . . . . . . . . . . . . 48,000 98,667 242,992
Salaries and wages . . . . . . . . . . . . . 90,786 28 484 455,461
Consulting fees. . . . . . . . . . . . . . . 58,550 785,740 1,656,607
Loan interest. . . . . . . . . . . . . . . . 66,920 14,533 169,887
Research and development . . . . . . . . . . - - 125,000
Depreciation and amortization. . . . . . . . 42,041 712 58,816
Audit fees . . . . . . . . . . . . . . . . . 30,079 1,000 31,079
--------------- --------------- ---------------
Total Expenses. . . . . . . . . . . . . . 438,411 1,330,213 3,615,575
--------------- --------------- ---------------
OTHER INCOME
Interest income. . . . . . . . . . . . . . . 12 96 116
--------------- --------------- ---------------
Net (Loss) before Discontinued Operations . . . $ (365,889) $ (1,330,117) $ (3,554,766)
Income (loss) from discontinued operations
Net of Taxes . . . . . . . . . . . . . . - (6,898) (116,071)
Gain on sale of assets . . . . . . . . . . . . - - 433,908
--------------- --------------- ---------------
Net (Loss). . . . . . . . . . . . . . . . . . . $ (365,889) $ (1,337,015) $ (3,236,929)
=============== =============== ===============
Net Income (loss) per
Common Share, basic and diluted . . . . . . $ ( 0.106) $ (1,531.52) $ (6.95)
=============== =============== ===============
Weighted Average number of Common
Shares outstanding, basic and diluted
adjusted for previous splits. . . . . . . . . 3,449,307 873 465,977
=============== =============== ===============
See accompanying notes to financial statements
4
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Three Months
Ended Ended
June 30, 2005 June 30, 2004
------------------ -----------------
REVENUES
Consulting fees. . . . . . . . . . . . . . . $ - $ -
Rental income. . . . . . . . . . . . . . . . 36,255 -
RE-Info fees . . . . . . . . . . . . . . . . - -
--------------- ---------------
Total Revenues. . . . . . . . . . . . . . 36,255 -
--------------- ---------------
Cost of goods sold
Cost of RE-Info information. . . . . . . . . - -
--------------- ---------------
Gross profit. . . . . . . . . . . . . . . . . . 36,255 -
EXPENSES
General and administrative . . . . . . . . . 62,238 140,161
Officer compensation . . . . . . . . . . . . 19,000 86,040
Salaries and wages . . . . . . . . . . . . . 34,986 15 258
Consulting fees. . . . . . . . . . . . . . . 20,100 589,725
Loan interest. . . . . . . . . . . . . . . . 33,709 11,533
Depreciation and amortization. . . . . . . . 20,925 356
Audit fees . . . . . . . . . . . . . . . . . 3,000 -
--------------- ---------------
Total Expenses. . . . . . . . . . . . . . 193,959 843,073
--------------- ---------------
OTHER INCOME
Interest income. . . . . . . . . . . . . . . 3 60
--------------- ---------------
Net (Loss) before Discontinued Operations . . . $ (157,701) $ (843,013)
Income (loss) from discontinued operations
Net of Taxes . . . . . . . . . . . . . . - (3,774)
Gain on sale of assets . . . . . . . . . . . . - -
--------------- ---------------
Net (Loss). . . . . . . . . . . . . . . . . . . $ (157,701) $ (846,787)
=============== ===============
Net Income (loss) per
Common Share, basic and diluted . . . . . . $ ( 0.036) $ (711.72)
=============== ===============
Weighted Average number of Common
Shares outstanding, basic and diluted
adjusted for previous splits. . . . . . . . . 4,410,779 1,190
=============== ===============
See accompanying notes to financial statements
5
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Inception
Six Months Six Months March 28, 2002
Ended Ended Thru
June 30, 2005 June 30, 2004 June 30, 2005
------------------ ----------------- ------------------
OPERATING ACTIVITIES
- ----------------------------------
Net (Loss) . . . . . . . . . . . . . . . . . . . $ (365,889) $ (1,337,014) $ (3,236,930)
Adjustments to reconcile Net Loss to Cash
(used) by operating activities:
Depreciation and Amortization . . . . . . . . 42,041 712 58,814
Forfeited deposits. . . . . . . . . . . . . . 9,148 - 9,148
(Gain) on sale of subsidiary. . . . . . . . . - - (433,908)
Consulting and legal fees paid via stock. . . 22,850 322,700 1,040,240
Employee stock incentive. . . . . . . . . . . 21,335 - 305,539
Changes in operating assets and liabilities:
(Increase) decrease in Accounts receivable. . (298) - (298)
(Increase) decrease in prepaid expenses . . . 243 - -
Increase (decrease) in accounts payable . . . 14,266 (13,489) 203,605
(Decrease) increase in unearned revenue . . . 25,000 - 75,000
(Decrease) increase in rent deposits. . . . . - - 5,000
(Increase) decrease in deposits . . . . . . . (9,635) 2,000 (11,635)
(Decrease) increase in accrued liabilities. . 21,265 24,533 463,012
(Decrease) increase in liabilities of
subsidiary sold . . . . . . . . . . . . - - 135,790
(Increase) decrease in assets of
discontinued operations . . . . . . . . . - 256 (539)
Increase (decrease) in liabilities of
Discontinued operations . . . . . . . . . - 6,387 263,658
--------------- --------------- ---------------
Net cash (used) by Operating Activities. . . . . (219,673) (993,915) (1,123,505)
--------------- --------------- ---------------
INVESTMENT ACTIVITIES
- --------------------------------------
Cash paid for Property, plant and Equipment . (31,422) (1,898,081) (724,665)
Proceeds from sale of subsidiary. . . . . . . - - 35,000
--------------- --------------- ---------------
Net cash (used) by Investment activities . . . . (31,422) (1,898,081) (689,665)
--------------- --------------- ---------------
FINANCING ACTIVITIES
- ---------------------------------
Cash proceeds from debt . . . . . . . . . . . 66,000 1,280,000 206,000
Cash paid to reduce debt. . . . . . . . . . . (19,383) - (34,623)
Officer compensation paid via stock . . . . . - - 37,540
Cash proceeds from sale of common stock . . . 214,520 1,823,122 1,606,581
(Decrease) increase in payable to/loan
from officer. . . . . . . . . . . . . . . 500 (36,123) 12,552
--------------- --------------- ---------------
Net cash provided by Financing Activities. . . . 261,637 3,066,999 1,828,050
--------------- --------------- ---------------
Increase (decrease) in Cash. . . . . . . . . . . 10,542 171,003 14,881
Cash at Beginning of Period. . . . . . . . . . . 4,339 1,213 -
--------------- --------------- ---------------
Cash at End of Period. . . . . . . . . . . . . . $ 14,881 $ 172,216 $ 14,881
=============== =============== ===============
SUPPLEMENTAL DISCLOSURES
Cash payment for interest . . . . . . . . . . $ 50,906 $ - $ 104,019
=============== =============== ===============
Cash payment for income taxes . . . . . . . . $ - $ - $ -
=============== =============== ===============
Common stock issued in payment of payable to/
loan from officer. . . . . . . . . . . . . $ 4,600 $ - $ 4,600
=============== =============== ===============
See accompanying notes to financial statements
6
GLOBAL LINKS CORP.
(A Development Stage Enterprise)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
NOTE 1 - Basis of Presentation
------------------------
The accompanying consolidated balance sheet of Global Links Corp. the "Company",
and its wholly owned subsidiaries, Capitol Group Holdings Corp. and Global Links
Construction Corp. (A Development Stage Enterprise) at June 30, 2005, and the
consolidated statements of operations for the three and six month periods ended
June 30, 2005 and 2004 and the cumulative period during the development stage
from March 28, 2002 (inception) through June 30, 2005 and the statement of cash
flows for the six month periods ended June 30, 2005 and 2004 and the cumulative
period during the development stage through June 30, 2005, have been prepared by
the Company's management and they do not include all information of the
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. 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 six month periods ended June 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 six month periods ended June 30, 2005, are not necessarily indicative of the
results that can be expected for the year ending December 31, 2005.
Note 2 - 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 are expected to be
acquired by the Company at a later date.
7
Note 3 - 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 being treated as unearned until such time
as the site is operational, at which time the advance payment will be amortized
over a two month period.
In the period ended June 30, 2005, the Company received $25,000 in payment of
an option to acquire houses in the Company's Arizona project. The actual option
agreement was not concluded until July, 2005. Accordingly under SAB 101, the
revenues from the sale of this option will not be recognized until earned.
Note 4 - Notes and Other Payables
In the quarter ended June 30, 2005, the Company incurred additional debt to an
entity in the amount of $25,000. The debt is due upon demand without interest.
NOTE 5 - Common Stock
In January, 2005, the Company issued a stock registrations on form S-8
registering shares, for the Company's Non-Employee Directors and Consultants
Retainer Stock Plan, and for the Company's Employee Stock Incentive Plan. The
table below represents the number of shares issued, dollar value of those
shares, and the registered shares remaining at June 30, 2005, after adjustment
for the 1-for-350 reverse stock split effected on February 1, 2005.
Non-employee Directors
and Consultants Employees
Number of Number of
Number of remaining Shares Number of Remaining shares
Shares Dollars Registered Shares Dollars Registered
- ----------- ---------- ------------ -------------- ------------ ----------- --------------
For the 6
Months Ended
June 30, 2005 1,007,143 $ 27,450 75,550,000 2,777,143 $ 213,354 303,680,000
============ ============ ============= ============ =========== ==============
The table below represents the number of shares and dollar value of shares
issued for cash and for services during the six month period ended June 30,
2005.
Non-employee Directors
and Consultants Employees
Quarter Number of Number of
June 30, 2005 Shares Dollars Shares Dollars
- -------------------------- ---------- ------------ ------------ -----------
Issued for cash under ESOP - $ - 2,777,143 $ 192,019
Bonus portion of ESOPO - - - 21,335
Shares issued for Services 1,007,143 27,450 - -
------------ ------------ ------------- ------------
1,007,143 $ 27,450 2,777,143 $ 213,354
============ ============ ============= ============
8
Note 6 - 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
nonassessable 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 unissued 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 20,000,000shares, 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
nonassessable 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 unissued 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 the date
of this report.
9
Note 7 - 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 are 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 8 - Commitments and Contingencies
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 expects to settle the suit by payment of an
amount not in excess of $100,000 which amount 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 $150,000 for the six months ended June 30, 2005, the Net
effect of the additional payment would be as follows:
Net loss as reported $ (351,241)
Additional cost of R-E-Info information 150,000
-----------
Net loss adjusted for additional costs $ (501,241)
===========
Net loss per common share $ (0.145)
Note 9 - 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS
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-LOOKING
STATEMENTS 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 ARE 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.
10
For the three month period ended June 30, 2005, the Company recorded $36,255 in
rental income, and $3 in interest income. There were no rental revenues
recorded, and $60 in interest income in the same period of 2004. The increase
in rental income was due to the acquisition and rental of the Company's Sunset
Office Building.
For the six month period ended June 30, 2005, the Company recorded $72,510 in
rental income, and $12 in interest income. There were no rental revenues
recorded, and $96 in interest income in the same period of 2004. The increase
in rental income was due to the acquisition and rental of the Company's Sunset
Office Building.
As of June 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 it's Arizona development project.
The Company expects to spend $60,000.00 in additional research and development
funds on its R-E-info.net website, with the site fully operational by year-end,
2005.
The Company has cancelled plans to acquire the Utah real estate. 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 2005. 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 2005, and through the sale
of selected parcels within the project.
The Company has an option to acquire two adjacent lots to its office building in
Las Vegas, Nevada. The project 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 2005. Closing on these properties is
expected to take place on or before December 31, 2005.
The Company received a copyright for "The Domain" on April 13, 2005. The company
plans to break ground on the first phase of this project in the last quarter of
2005, or in early 2006. "The Domain," 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' 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
negotiating on several parcels of real estate, which will determine the start
date for implementation of this development 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
preceeding 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.
11
ITEM 3. CONTROLS AND PROCEDURES
New accounting procedures
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.
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 within the time periods specified 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.
12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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 yearend 2005.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
a) None
b) NONE
c) 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
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits - 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: August 12, 2005 By: /Frank Dobrucki
---------------------------
Frank Dobrucki,
President, and CEO,
13
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATIONS
I, Frank Dobrucki, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Global Links Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
d) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
e) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: August 12, 2005
/s/Frank Dobrucki
------------------
Frank Dobrucki
President
and Chief Executive Officer
(Principal Executive Officer)
14
CERTIFICATION PURSUANT TO
18 U.S.C.SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Frank Dobrucki, Chief Executive Officer for Global Links Corp. certify that:
1. I have reviewed the quarterly report on Form 10-QSB of Global Links Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.
Dated August 12, 2005
/s/Frank Dobrucki
------------------
Frank Dobrucki
President
and Chief Executive Officer
(Principal Executive Officer)
15