SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
May 15, 2003
Date of Report (Date of earliest event reported)
Atlantic Security Limited
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation)
000-28835 65-0963962
(Commission File Number) (IRS Employer Identification No.)
Glyme House
St. John's Street
Bicester, Oxfordshire
OX2 6SL
(address of principal executive offices)
00 44 1869 242378
(Registrant's telephone number, including area code)
(Former name and former address, if changed since last report.)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGE 2 BALANCE SHEET AS OF MARCH 31, 2003
PAGE 3 STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS FOR
THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO
MARCH 31, 2003
PAGE 4 STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR
THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO
MARCH 31, 2003
PAGE 5 STATEMENT OF CASH FLOWS FOR THE PERIOD FROM SEPTEMBER
6, 2002 (INCEPTION) TO MARCH 31, 2003
PAGES 6 - 9 NOTES TO FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Atlantic Security Limited
(A Development Stage Company)
We have audited the accompanying balance sheet of Atlantic Security
Limited (a development stage company) as of March 31, 2003, and the
related statements of operations and comprehensive loss, changes in
stockholders' deficiency and cash flows for the period from September
6, 2002 (inception) to March 31, 2003. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly in all material respects, the financial position of Atlantic
Security Limited (a development stage company) as of March 31, 2003
and the results of its operations and its cash flows for the period
from September 6, 2002 (inception) to March 31, 2003 in conformity
with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 6
to the financial statements, the Company is in the development stage
with no operations, has a negative cash flow from operations of $ 17,
and a working capital and stockholders' deficiency of $ 2,898. These
factors raise substantial doubt about its ability to continue as a
going concern. Management's plans concerning this matter are also
described in Note 6. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
WEBB & COMPANY, P.A.
/s/ WEBB & COMPANY, P.A.
Boynton Beach, Florida
July 14, 2003
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF MARCH 31, 2003
ASSETS $ -
---------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Stockholder loans $ 2,898
---------------
TOTAL LIABILITIES 2,898
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' DEFICIENCY
Common stock, $.0158 par value, 1,000,000 shares
authorized, 39,805 shares issued and outstanding 627
Additional paid in capital 161
Accumulated deficit during development stage (2,915)
Accumulated other comprehensive gain 17
Subscription receivable (788)
--------------
Total Stockholders' Deficiency (2,898)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ -
==============
See accompanying notes to financial statements.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO MARCH 31, 2003
OPERATING EXPENSES
General and administrative $ 2,915
---------------
Total Operating Expenses 2,915
LOSS FROM OPERATIONS (2,915)
Provision for Income Taxes -
---------------
NET LOSS (2,915)
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain 17
---------------
COMPREHENSIVE LOSS $ (2,898)
- ------------------ ===============
Net loss per share - basic and diluted $ (0.07)
===============
Weighted average number of shares outstanding during
the period - basic and diluted 39,805
===============
See accompanying notes to financial statements.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO MARCH 31, 2003
Accumulated
Deficit
Common Stock Additional During Other
------------ Paid-in Development Comprehensive Subscriptions
Shares Amount Capital Stage Gain Receivable Total
--------- ------ ---------- ----------- ------------- ------------- -------
Stock issued to
founders ($0.02 per share) 39,805 $ 627 $ 161 $ - $ - $ (788) $ -
Other comprehensive gain - - - - 17 - 17
Net loss for the
period from September
6, 2002 (inception)
to March 31, 2003 - - - (2,915) - - (2,915)
Comprehensive loss - - - - 17 - (2,918)
----- ------ -------- ------------ ---------- ----------- --------
BALANCE, MARCH 31, 2003 39,805 $ 627 $ 161 $ (2,915) $ 17 $ (788) $(2,898)
- -----------------------
See accompanying notes to financial statements.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO MARCH 31, 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,915)
Changes in operating assets and liabilities:
Stockholder loans 2,898
------------
Net Cash Used In Operating Activities (17)
------------
CASH FLOWS FROM INVESTING ACTIVITIES -
------------
CASH FLOWS FROM FINANCING ACTIVITIES -
------------
EFFECT OF EXCHANGE RATE ON CASH 17
------------
NET INCREASE IN CASH -
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -
============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
- ----------------------------------------------------------------------
During the period ended March 31, 2003, the Company received
subscriptions receivable of $788 for 39,805 shares of common stock.
See accompanying notes to financial statements.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
- ------ -----------------------------------------------------------
(A) Organization
- ----------------
Atlantic Security Limited (a development stage company) (the
"Company") was incorporated in the United Kingdom on
September 6, 2002, and has elected a fiscal year of March 31.
The Company plans to market security products and asset
tracking software.
Activities during the development stage include developing
the business plan and raising capital.
On May 15, 2003, the Company consummated a share-exchange
agreement whereby it became a wholly owned subsidiary of
Atlantic Security, Inc., a Florida corporation (See Note 7).
(B) Use of Estimates
- --------------------
In preparing financial statements in conformity with
generally accepted accounting principles, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the
reported period. Actual results could differ from those
estimates.
(C) Cash and Cash Equivalents
- -----------------------------
For purposes of the cash flow statements, the Company
considers all highly liquid investments with original
maturities of three months or less at the time of purchase to
be cash equivalents.
(D) Foreign Currency Translation
- --------------------------------
The functional currency of the Company is the British Pound.
The financial statements of the Company are translated to
United States dollars using year-end exchange rates as to
assets and liabilities and average exchange rates as to
revenues and expenses. Capital accounts are translated at
their historical exchange rates when the capital transaction
occurred. Net gains and losses resulting from foreign
exchange translations are included in the statements of
operations ands stockholders' equity as other comprehensive
gain (loss).
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
(E) Comprehensive Income (Loss)
- -------------------------------
The foreign currency translation gain or loss resulting from
the translation of the financial statements expressed in
British Pounds to United States dollars is reported as other
comprehensive gain (loss) in the statement of operations and
stockholders' deficiency.
(F) Income Taxes
- ----------------
The Company accounts for income taxes under the Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
The Company is organized in England and no tax benefit is
expected from the tax credits in the future.
(G) Fair Value of Financial Instruments
- ---------------------------------------
The carrying amounts of the Company's financial instruments
including stockholder loans approximate fair value due to the
relatively short period to maturity for this instrument.
(H) Loss Per Share
- ------------------
Basic and diluted net loss per common share is computed based
upon the weighted average common shares outstanding as
defined by Financial Accounting Standards No. 128, "Earnings
Per Share." As of March 31, 2003, there were no common stock
equivalents.
(I) Business Segments
- ---------------------
The Company operates in one segment and therefore segment
information is not presented.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
(J) New Accounting Pronouncements
- ---------------------------------
In April 2003, the FASB issued SFAS No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging
Activities". SFAS 149 amends and clarifies financial
accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for
hedging activities under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". The changes
in SFAS No. 149 improve financial reporting by requiring that
contracts with comparable characteristics be accounted for
similarly. This statement is effective for contacts entered
into or modified after June 30, 2003 and all of its
provisions should be applied prospectively. The adoption of
this pronouncement will not have a material effect on the
Company's financial position or results of operations.
NOTE 2 STOCKHOLDER LOANS
- ------ -----------------
During 2003, the Company received loans from two stockholders
to fund operations. The loans are non-interest bearing and
due on demand (See Note 5).
NOTE 3 COMMITMENTS AND CONTINGENCIES
- ------ -----------------------------
During December 2002, the Company entered into a worldwide
non-exclusive distribution agreement (the "Agreement") to
distribute the SatraX asset-trading software. The Agreement
is for a term of twelve months with a twelve-month extension
upon mutual consent of the parties. Either party has the
right to terminate the contract after the initial twelve-
month period upon sixty days notice. The Agreement calls for
the Company to pay a $31,600 license fee for the Agreement to
become effective. As of July 14, 2003, the Company has not
paid the license fee.
During January 2003, the Company signed an agreement under
which it has a ten-month option to acquire all the
outstanding shares of two companies that hold intellectual
property rights to the Biological Substance Detector and
Molecular Detector. The agreement calls for the Company to
make an initial payment of approximately $3,149,000 and bonus
and milestone payments of approximately $4,724,000 to
exercise its option. In addition, the agreement calls for
the Company to pay approximately $3,149,000 in bonus payments
for each of the first two sales of products using the
intellectual property.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
NOTE 4 STOCKHOLDERS' DEFICIENCY
- ------ ------------------------
(A) Issuance of Common Stock to Founders
------------------------------------
During the period ended March 31, 2003, the Company issued
39,805 shares of common stock for a subscription receivable
of $ 788.
NOTE 5 RELATED PARTY TRANSACTIONS
- ------ --------------------------
During 2003, the Company received loans from two stockholders
to fund operations (See Note 2).
NOTE 6 GOING CONCERN
- ------ -------------
As reflected in the accompanying financial statements, the
Company is a development stage company with no revenues, has
a negative cash flow from operations of $17, and a working
capital and stockholders' deficiency of $2,898. These
factors raise substantial doubt about its ability to continue
as a going concern. The ability of the Company to continue
as a going concern is dependent on the Company's ability to
further implement its business plan, raise capital and
generate revenues. The financial statements do not include
any adjustments that might be necessary if the Company is
unable to continue as a going concern.
The Company is negotiating with capital funding sources and
service providers to implement its business plan. Management
believes that actions presently being taken to raise capital
and implement its business plan provides the opportunity for
the Company to continue as a going concern.
NOTE 7 SUBSEQUENT EVENT
- ------ ----------------
On May 15, 2003, the Company consummated an agreement with
Atlantic Security, Inc., a Florida corporation, pursuant to
which the Company exchanged all of its 39,805 then issued and
outstanding shares of common stock for 39,805,000 shares of
the common stock of Atlantic Security, Inc. As a result of
the transaction (the "Transaction"), the Company became a
wholly owned subsidiary of Atlantic Security, Inc. and all of
the shareholders of the Company became stockholders of common
stock of Atlantic Security, Inc. The Transaction will be
accounted for as an acquisition by the Company and as a
recapitalization by Atlantic Security, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Date: July 24, 2003 Atlantic Security Limited
By: /s/ Terence Sulivan
-------------------------
Terence Sulivan
President