[X] ANNUAL REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes [X] No
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
[ ] Yes [X] No
Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether
the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). [X] Yes
[ ] No
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
[ ]
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X]
Yes [ ] No
As of June 30, 2020, the
aggregate market value of voting stock held by non-affiliates of the registrant was approximately $668,000 based on the
last sale price reported for the registrant’s Common Stock on the OTC Markets Group Inc. Pink Tier of $0.30 per
share.
The number of shares of Common
Stock, $0.001 par value, outstanding on March 25, 2021 was 5,658,123 shares.
PART I
ITEM 1. BUSINESS
On October 18, 2016, the Company completed the closing of the
Transfer Agreement for the sale and transfer of the Company’s 51% interest in All American Golf Center, Inc. (“AAGC”),
which constituted substantially all of the Company’s assets. As a result of the closing of the Transfer Agreement, the
Company now has no or nominal operations and no or nominal assets and is therefore considered to be a “Shell Company” as
that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
At this time, our purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented to us by persons or firms who or which
desire to seek the perceived advantages of a corporation whose securities are registered pursuant to the Exchange
Act.
HISTORICAL DEVELOPMENT
The Company was incorporated in Nevada on March 6,
1984, under the name “Sporting Life, Inc.” The Company’s name was changed to “St. Andrews Golf Corporation” on December
27, 1988, to “Saint Andrews Golf Corporation” on August 12, 1994, and to “All-American SportPark, Inc.” on
December 14, 1998. Effective February 15, 2021, the name of the Company was changed to “Global Acquisitions
Corporation.”
In December 1994, the Company completed an initial
public offering of 1,000,000 Units, each Unit consisting of one share of Common Stock and one Class A Warrant. The net
proceeds to the Company from this public offering were approximately $3,684,000. The Class A Warrants expired
unexercised on March 15, 1999.
On July 12, 1996, the Company entered into a lease
agreement of land in Las Vegas, Nevada, on which the Company developed a Golf Center and All-American SportPark,
(“SportPark”) properties. The discontinued SportPark that opened for business in October 1998 was disposed of in May
2001.
On June 15, 2011, the Company entered into a Stock
Transfer Agreement with Saint Andrews pursuant to which the Company transferred 49% of the outstanding common stock of
All-American Golf Center, Inc. ("AAGC"), a subsidiary of the Company, to Saint Andrews Golf Shop, Ltd. ("Saint Andrews")
in exchange for the cancellation of $600,000 of debt owed by the Company to Saint Andrews.
Saint Andrews is owned by Ronald Boreta, the
Company's President and a Director and John Boreta, his brother. John Boreta is a principal shareholder of the Company
and became Director of the Company in 2012. The debt owed by the Company to Saint Andrews was from advances made in the
past by Saint Andrews to provide the Company with working capital.
On June 10, 2016, the Company
entered into a Transfer Agreement for the sale and transfer of the Company’s remaining 51% interest in AAGC, which
constituted substantially all of the Company’s assets. On October 18, 2016, the Company completed the closing of
the Transfer Agreement pursuant to which the Company transferred the 51% interest in AAGC to Ronald Boreta and John
Boreta (the “Boretas”), and also issued to the Boretas 1,000,000 shares of the Company’s common stock, in exchange for
the cancellation of promissory notes held by the Boretas and the interest accrued thereon totaling approximately
$8,613,000.
1
In connection with the closing
of the Transfer Agreement, AAGC assumed the obligation of the Company to pay Ronald Boreta for deferred salary which
currently totals approximately $320,000. In addition, AAGC cancelled approximately $4,125,000 in advances previously
made by it to the Company to fund its operations.
Also in connection with the
closing of the Transfer Agreement, entities controlled by the Boretas cancelled approximately $1,367,000 owed to them by
the Company. The Company cancelled approximately $27,605 owed to the Company by entities controlled by the
Boretas.
As a result of the closing of the
Transfer Agreement, the Company now has nominal operations and assets.
BUSINESS PLAN
Our business plan is to seek, investigate, and, if
warranted, acquire an interest in a business opportunity. Such an acquisition may be made by merger, exchange of stock,
or otherwise. We have very limited sources of capital, and will likely be able to take advantage of only one business
opportunity. As of the date of this report we have been investigating business opportunities, but we have not reached
any preliminary or definitive agreements or understandings with any person concerning an acquisition or merger.
Our search for a business opportunity will not be
limited to any particular geographical area or industry and may include both U.S. and international companies. Our
management has complete discretion in seeking and participating in a business opportunity, subject to the availability
of such opportunities, economic conditions and other factors. Our management believes that companies who desire a public
market to enhance liquidity for current stockholders, or plan to acquire additional assets through issuance of
securities rather than for cash, will be potential merger or acquisition candidates.
The selection of a business opportunity in which to
participate may be complex and will be made by management in the exercise of their business judgment which may act
without consent, vote, or approval of our shareholders. We cannot assure you that we will be able to identify and merge
with or acquire any business opportunity which will ultimately prove to be beneficial to the Company and our
shareholders. Should a merger or acquisition prove unsuccessful, it is possible management may decide not to pursue
further acquisition activities and management may abandon such a search and the Company may become dormant or be
dissolved.
The Company expects that business opportunities will come to
our attention from various sources, including our officers and directors, our stockholders, professional advisors, such
as securities broker-dealers, investment banking firms, venture capitalists and others who may present unsolicited
proposals.
2
Our management will analyze the business opportunities;
however, none of our management are professional business analysts. Our management has had limited experience with
mergers and acquisitions of business opportunities. Our due diligence related to business opportunities is expected to
encompass, meetings with the target business’s management and inspection of its facilities, as necessary, as well as a
review of financial and other information which is made available to our management. This due diligence review may be
conducted either by our management or by unaffiliated third parties we may engage. Our limited funds and the lack of
full-time management may limit our ability to conduct an exhaustive investigation and analysis of a target business
before we consummate a business combination. We anticipate that we will rely upon funds provided by advances and/or
loans from management and significant stockholders to conduct the investigation and analysis of any potential businesses
opportunity. We may also rely upon the issuance of our common stock in lieu of cash payments for services or expenses
related to any analysis. Management decisions, therefore, will likely be made without independent analysis. We will
likely make decisions based on information provided by the promoters, owners or other persons associated with the
business opportunity.
The legal structure of our participation in a business
opportunity may include, but will not be limited to, leases, purchase and sale agreements, licenses, joint ventures and
other contractual arrangements. We may act directly or indirectly through an interest in a partnership, corporation or
other form of organization. We may be required to merge, consolidate or reorganize with other corporations or forms of
business organizations. In addition, our present management and stockholders most likely will not have control of a
majority of our voting shares following a merger or reorganization transaction. As part of such a transaction, our
existing directors may resign and new directors may be appointed to fill those vacancies without any vote by our
stockholders.
Our participation in a business opportunity would
likely come through the issuance of common stock or other securities. In certain circumstances the criteria for
determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a) (1) of the
Internal Revenue Code of 1986, as amended (the "Code") depends upon whether the owners of the acquired business own 80%
or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in that
circumstance retain 20% or less of the total issued and outstanding shares of the surviving entity. This would result in
substantial dilution to the equity of those persons who were our shareholders prior to such reorganization.
Significant stockholders may actively negotiate or
otherwise consent to the purchase of all or a portion of their common stock as a condition to, or in connection with, a
proposed reorganization, merger or acquisition. It is not anticipated that any such opportunity would be afforded to
other stockholders or that such other stockholders would be afforded the opportunity to approve or consent to any
particular stock buy-out transaction. We have not adopted any procedures or policies for the review, approval or
ratification of any related party transactions.
COMPETITION
We face substantial competition in our effort to
locate attractive business opportunities. Business development companies, venture capital partnerships and corporations,
venture capital affiliates of large industrial and financial companies, special purpose acquisition companies (SPACs),
small investment companies, and wealthy individuals are our primary competition. Many of these entities have
significantly greater experience, resources and managerial capabilities than we do and may be in a better position than
we are to obtain access to attractive business opportunities.
3
COMPLIANCE WITH SECURITIES LAWS
The Company is subject to the Exchange Act of 1934
and is required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a regular basis,
and will be required to timely disclose certain material events (e.g., changes in corporate control; acquisitions or
dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K. We are also subject to Section 14(a) of the Exchange Act which requires the Company to
comply with the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters
submitted to our stockholders at a special or annual meeting of stockholders or pursuant to a written consent will
require us to provide our stockholders with the information outlined in Schedules 14A or 14C of Regulation 14A;
preliminary copies of this information must be submitted to the SEC at least 10 days prior to the date that definitive
copies of this information are forwarded to our stockholders.
Since we are a ‘shell company,” if we were to
acquire a non-reporting company, we would be required to file a Current Report on Form 8-K that would include all
information about such “non-reporting issuer” as would have been required to be filed by that entity had it filed a Form
10 Registration Statement with the SEC.
EMPLOYEES
The Company currently has no employees.
ITEM 1A.
RISK FACTORS
Not required.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
The Company has no properties. The Company’s
corporate offices are located at 6730 Las Vegas Boulevard South, Las Vegas, Nevada 89119 in space shared with AAGC.
4
ITEM 3. LEGAL PROCEEDINGS
The Company is not presently a party to any legal
proceedings, except for routine litigation that is incidental to the Company’s business.
ITEM 4. MINE SAFETY DISCLOSURES.
This item is not applicable to the Company.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION. The Company’s common stock is
currently traded in the over-the-counter market and is quoted on the OTC Markets Group Inc. Pink Tier under the symbol
“AASP.” For the Company’s new name to be recognized on the over-the-counter market, the Financial Industry
Regulatory Authority (“FINRA”) is required to process the corporate action. The Company has submitted the required
documentation to FINRA. The Company’s common stock will continue to trade under the symbol “AASP” until such time as
FINRA has declared the name change effective.
The following table sets forth the high and low
sales prices of the common stock for the periods indicated.
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HIGH
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LOW
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Year Ended December 31, 2020
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First Quarter
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$
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0.47
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$
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0.28
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Second Quarter
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$
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0.51
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$
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0.11
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Third Quarter
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$
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0.31
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$
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0.17
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Fourth Quarter
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$
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0.45
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$
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0.16
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Year Ended December 31, 2019:
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First Quarter
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$
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0.65
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$
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0.30
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Second Quarter
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$
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0.76
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$
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0.37
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Third Quarter
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$
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0.70
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$
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0.37
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Fourth Quarter
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$
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0.51
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$
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0.28
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5
HOLDERS
The number of holders of record of the Company’s
$0.001 par value common stock as of March 25, 2021 was approximately 1,050. This does not include approximately 500
shareholders who hold stock in their accounts at broker/dealers.
DIVIDENDS
Holders of common stock are entitled to receive
such dividends as may be declared by the Company’s Board of Directors. No dividends have been paid with respect to the
Company’s common stock and no dividends are expected to be paid in the foreseeable future. It is the present policy of
the Board of Directors to retain all earnings to provide for the growth of the Company. Payment of cash dividends in the
future will depend, among other things, upon the Company’s future earnings, requirements for capital improvements and
financial condition.
SALES OF UNREGISTERED SECURITIES.
During the quarter ended December 31, 2020, the Company had no sales of
unregistered securities.
ISSUER PURCHASES OF EQUITY SECURITIES
None.
ITEM 6. SELECTED FINANCIAL DATA.
Not required.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following information should be read in
conjunction with the Company’s Financial Statements and the Notes thereto included in this report.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our financial statements are prepared in accordance
with accounting principles generally accepted in the United States (“GAAP”) In connection with the preparation of the
financial statements, we are required to make assumptions and estimates about future events that affect the reported
amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumption and estimate on
historical experience and other factors that management believes are relevant at the time our financial statements are
prepared. On a periodic basis, management reviews the accounting policies, assumptions and estimates to ensure that our
financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects
cannot be determined with certainty, actual results could differ from the estimates and assumptions, and such
differences could be material.
6
Our significant accounting policies are discussed
in Note 2, Summary of Significant Accounting Policies in the Notes to the Financial Statements. The following accounting
policies are most critical in fully understanding and evaluating our reported financial results.
Use
of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires management 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 the reported amount of revenues and expenses during the reporting period.
Significant estimates and assumptions made by management include, but are not limited to, the determination of the
provision for income taxes and the fair value of stock-based compensation. The Company bases the estimates on historical
experience and on various other assumptions that are believed to be reasonable. Actual results could differ from those
estimates.
Fair
value of financial instruments
Fair value is defined as the exchange price that would be
received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants on the measurement date. An entity is
required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
There are three levels of inputs that may be used to measure fair value:
Level 1 - Quoted prices in active markets
that are accessible at the measurement date for identical assets or liabilities.
Level 2 - Quoted prices for similar assets
and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not
active; and model-derived valuations in which all significant inputs and significant value drivers are observable in
active markets.
Level 3 - Unobservable inputs that are
supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level
3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash
flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires
significant management judgment or estimation.
Inputs are used in applying the various valuation techniques
and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions
about risk. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is
significant to the fair value measurement. However, the determination of what constitutes “observable” requires
significant judgment by the Company. Management considers observable data to be market data which is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary, provided by multiple, independent sources
that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based
upon the pricing transparency of the investment and does not necessarily correspond to the Company’s perceived risk of
that investment.
7
At December 31, 2020, and 2019,
the carrying amount of prepaid, accounts payable and accrued liability, accounts payable and accrued liability–related
parties, due to related parties and notes payable and accrued interest payable–related parties approximate fair value
because of the short maturity of these instruments.
Revenue
The Company has no revenue.
Earnings per
share
Basic earnings per share excludes any dilutive effects of
options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of
outstanding common shares during the applicable period. Diluted earnings per share is computed using the weighted
average number of common and dilutive common stock equivalent shares outstanding during the period. Common stock
equivalent shares are excluded from the computation if their effect is antidilutive.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company believes there was no new accounting
guidance adopted but not yet effective that either has not already been disclosed in prior reporting periods or is
relevant to the readers of the Company’s financial statements.
OVERVIEW OF CURRENT OPERATIONS
On October 18, 2016, the Company completed the
closing of the Transfer Agreement for the sale and transfer of the Company’s 51% interest in All American Golf Center,
Inc. (“AAGC”), which constituted substantially all of the Company’s assets. As a result of the closing of the Transfer
Agreement, the Company now has no or nominal operations and no or nominal assets and is therefore considered to be a
“Shell Company” as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
At this time, our purpose is to seek, investigate
and, if such investigation warrants, acquire an interest in business opportunities presented to us by persons or firms
who or which desire to seek the perceived advantages of a corporation whose securities are registered pursuant to the
Exchange Act. We will not restrict our search to any specific business or geographical location.
This discussion of our proposed business is
purposefully general and is not meant to be restrictive of our discretion to search for and enter into potential
business opportunities.
Management anticipates that we may be able to
participate in only one potential business venture because we have nominal assets and limited financial resources. This
lack of diversification should be considered a substantial risk to our shareholders because it will not permit us to
offset potential losses from one venture against gains from another.
8
We may seek a business opportunity with entities
that have recently commenced operations, or that wish to utilize the public marketplace in order to raise additional
capital in order to expand into new products or markets, to develop a new product or service, or for other corporate
purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing
businesses as subsidiaries.
The Company has not entered into any definitive or
binding agreements and there are no assurances that such transactions will occur. Such a combination would
normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange. The Company may
determine to structure any business combination to be within the definition of a tax-free reorganization under Section
351 or Section 368 of the Internal Revenue Code of 1986, as amended.
It is anticipated that any securities issued in any
such business combination would be issued in reliance upon an exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Company may agree
to register all or a part of such securities immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, it will be undertaken by the surviving entity after the Company has entered
into an agreement for a business combination or has consummated a business combination. The issuance of additional
securities and their potential sale into any trading market in the Company's securities may depress the market value of
the Company's securities in the future.
RESULTS OF OPERATIONS – YEAR ENDED DECEMBER 31, 2020 VERSUS YEAR ENDING
DECEMBER 31, 2019.
GENERAL AND ADMINISTRATIVE (“G&A”)
G&A expenses consist principally of
administrative payroll, professional fees, and other corporate costs. These expenses decreased by $12,998 to $70,828 in
2020 from $83,826 in 2019. The decrease is attributed to the elimination of the share-based expense in 2020.
IMPAIRMENT ON PROPERTY AND EQUIPMENT
In 2020 and 2019 there was no impairment on property and
equipment.
DEPRECIATION AND AMORTIZATION
In 2020 and 2019 there was no depreciation and amortization
OTHER INCOME AND INTEREST EXPENSE
There was no interest expense in 2020 or 2019.
NET LOSS
In 2020, the net loss from operations was $70,828
as compared to net loss of $83,826 in 2019. The decrease in the net loss was due to the elimination of the share-based
expense in 2020.
9
CASH FLOW
The net cash used for operating activities
increased from $63,954 in 2019 compared to $81,008 in 2020. The Company was still dependent on related parties to
fund its operation.
LIQUIDITY AND CAPITAL RESOURCES
We currently have no cash and do not have an
ongoing source of revenue sufficient to cover our operating costs. We intend to obtain funding from related
parties to cover our expenses; however, there is no assurance that such funding will continue to be available. Our
ability to continue as a going concern on a long term basis is dependent upon our ability to find a suitable business
opportunity and acquire or enter into a merger with such company.
During the next 12 months we anticipate incurring
additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through
advances and loans provided by management. We may also rely on the issuance of our common stock in lieu of cash to
convert debt or pay for expenses.
FORWARD LOOKING STATEMENTS
This document contains “forward-looking
statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of
federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other
financial items; any statements of the plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements regarding future economic conditions or
performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words
“may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These
forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly,
readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on
which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or
events that arise after the dates they are made. You should, however, consult further disclosures we make in future
filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although we believe that the expectations reflected in any of
our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in
any of our forward-looking statements. Our future financial condition and results of operations, as well as any
forward-looking statements, are subject to change. The factors affecting these risks and uncertainties include, but are
not limited to:
-
the inability of management to effectively
implement our strategies and business plan;
-
the willingness of management to pay for our
ongoing expenses; and
-
the other risks and uncertainties detailed in
this report.
10
COVID-19 IMPACT
The COVID-19 outbreak and pandemic has resulted in a
widespread health crisis that could materially and adversely affect the economies and financial markets worldwide.
In addition, the operations and financial position of any potential target business with which we consummate a business
combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination
if continued concerns relating to COVID-19 restrict travel limit the ability to have meetings with the personnel and
representatives of potential target companies and may adversely affect our ability to negotiate and consummate a
transaction in a timely manner. The extent to which COVID-19 may impact our search for a business combination will
depend on future developments which are uncertain and cannot be predicted. If the disruptions posed by COVID-19 or other
matters of global concern continue for an extensive period, our ability to consummate a business combination, or the
operations of a target business with which we ultimately consummate a business combination may be materially adversely
affected.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are set forth on pages F-1 through F-13
hereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report,
the Company’s management carried out an evaluation, under the supervision of and with the participation of the Chief
Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act). Based upon that evaluation, the
Company’s Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures
were not effective as of the end of the period covered by this report due to a control deficiency. Specifically, at
December 31, 2019 we did not have sufficient personnel to allow segregation of duties to ensure the completeness or
accuracy of our information. Due to the size of the Company and its limited operations, we are unable to remediate this
deficiency until we acquire or merge with another company.
11
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and
maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act
of 1934 Rule 13a-15(f).
Our Chief Executive Officer and Chief Financial
Officer conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO Framework”). Based on our evaluation under the COSO Framework, our management concluded that
our internal controls over financial reporting were not effective as of December 31, 2020. Specifically we did not
have sufficient personnel to allow segregation of duties to ensure the completeness or accuracy of our information. Due
to the size of the Company and its limited operations, we are unable to remediate this deficiency until we acquire or
merge with another company.
The annual report does not include an attestation
report of our registered public accounting firm regarding internal control over financial reporting. Management’s report
was not subject to attestation by Section 989G of the Dodd Frank Wall Street Reform and Consumer Protection Act.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in internal control over
financial reporting that occurred during the fourth quarter of the fiscal year covered by this report that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
12
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The Directors and Executive Officers of the Company are as follows:
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NAME
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AGE
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POSITIONS AND OFFICES HELD
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Ronald S. Boreta
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58
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President, Chief Executive Officer,
Treasurer, Secretary and Director
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Steven Miller
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77
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Director
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Cara Corrigan
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59
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Director
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John Boreta
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60
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Director
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Ronald Boreta and John Boreta are brothers. There
are no other family relationships between any of the Directors and Executive Officers of the Company.
The Company does not currently have an audit
committee or an “audit committee financial expert” because it is not legally required to have one and due to the limited
size of the Company's operations, it is not deemed necessary. The Company presently has no compensation or nominating
committee.
All Directors hold office until the next Annual Meeting of
Shareholders.
Officers of the Company are elected annually by,
and serve at the discretion of, the Board of Directors.
The following sets forth biographical information
as to the business experience of each officer and director of the Company for at least the past five years.
RONALD S. BORETA has served as President of the
Company since 1992, Chief Executive officer (Principal Executive Officer) since August 1994, Principal Financial Officer
since February 2004, and a Director since its inception in 1984. The Company employed him from its inception in March
1984, with the exception of a 6-month period in 1985 when he was employed by a franchisee of the Company located in San
Francisco, California, until June 2016 when the Company transferred its interests in AACG. Since that time he has
been employed by AAGC as its President. Prior to his employment by the Company, Mr. Boreta was an assistant golf
professional at San Jose Municipal Golf Course in San Jose, California, and had worked for two years in South San
Francisco, California.
Mr. Boreta currently devotes approximately 60% of
his time to the business of the Company. Ronald S. Boreta was selected to be a Director of the Company because of
his long experience with the Company and because he has served as its sole executive officer for many years. He
has also served as an executive officer and director of another publicly-held company, Sports Entertainment Enterprises,
Inc. (subsequently named "CKX, Inc.").
13
STEVEN MILLER is the Chief Executive Officer of
Agassi Enterprises and Agassi Graf Holdings since January 2009. He is responsible for the leadership and operation
of two for-profit entities. He is responsible for the coordination of business ventures, strategies and personnel
evaluations, as well as managing and representing the Agassi Graf Lifestyle brand. Since January 2008, Mr. Miller has
also served as CEO of the Andre Agassi Foundation for Education. In that capacity, he is responsible for the leadership
and operation of the Foundation enterprise, and managing the financial portfolio. From May 2008 to April 2010, Mr.
Miller was the CEO of Power Plate International, and Executive Chairman of the Board of Directors. He previously
served as a senior analyst and adjunct professor at the University of Oregon’s Warsaw Sports Marketing Center; President
of Devine Sports in Chicago; and President and CEO of the Professional Bowlers Association in Seattle.
Agassi ASI Group, LLC and Investment AKA, LLC
currently hold approximately 35% of the Company's outstanding common stock. Both of these are limited liability
companies whose members include Andre K. Agassi. The election of Mr. Miller to the Board of Directors may be considered
to be a result of the relationship of Mr. Miller to Andre Agassi.
CARA CORRIGAN started as an employee of the Company in 1997 as the
Assistant Controller and then became the Executive Assistant to the President (Ronald Boreta) in 1999 and served as his
assistant until June of 2008. In June of 2009, she became the Company’s Corporate Controller working in that
position until May of 2015. Ms. Corrigan proved herself a dedicated employee with the Company and continues to be well
aware of the activities and direction of the Company. Ms. Corrigan now lives in Reno, NV, where, since March 2017, she
has been the Director of Operations and Administration for Minerva Office Management, a family trust office, where she
manages all aspects of the office and staff on a daily basis. She also is responsible for working with trust family
members both domestically and internationally. From June 2015 to March 2017, she was the Financial Controller for
a business conglomerate that included real estate, a clothing line, autos and horses. Mrs. Corrigan oversaw all
aspects of the business including working internationally with the firm’s Danish office.
JOHN BORETA was elected to the Board during the
third quarter of 2013. John has served as General Manager of the golf center that was owned by the Company until October
2016 (now named the “Las Vegas Golf Center”) since its inception in 1997. He is involved in all aspects of the day to
day operation of the facility. John moved to Las Vegas in 1981 to work in the family golf business, Las Vegas Golf and
Tennis. He was involved in the daily store operations as a retail sales manager, as well as mail-order sales supervisor.
He was promoted to store manager for a store that exceeded $10 million in sales annually. In addition to his involvement
with TaylorMade Golf Experience, he is co-owner of 2 golf retail stores in Las Vegas, including the Saint Andrews Golf
Shop which is a tenant at the golf center, with his brother, Ronald S. Boreta.
14
SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE
Based solely on a review of Forms 3 and 4 and
amendments thereto furnished to the Company during its most recent fiscal year, and Forms 5 and amendments thereto
furnished to the Company with respect to its most recent fiscal year and certain written representations, no persons who
were either a director, officer, beneficial owner of more than 10% of the Company's common stock, failed to file on a
timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year.
CODE OF ETHICS
The Board of Directors adopted a Code of Ethics on
March 26, 2008. The Code of Ethics was filed as Exhibit 14 to the Company's Report on Form 10-KSB for the year ended
December 31, 2007.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information
concerning the compensation received for services rendered in all capacities to the Company for the years ended December
31, 2020 and 2019 by the Company's President. The Company has no other executive officers.
SUMMARY COMPENSATION TABLE
|
NAME AND PRINCIPAL POSITION
|
|
|
|
|
|
|
|
|
STOCK
|
|
|
OPTION
|
|
|
ALL OTHER
|
|
|
|
|
|
|
|
SALARY
|
|
|
BONUS
|
|
|
AWARDS
|
|
|
AWARDS
|
|
|
COMPEN-
|
|
|
TOTAL
|
|
|
YEAR
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
SATION
|
|
|
($)
|
|
Ronald S. Boreta, President
|
2020
|
$
|
-
|
|
$
|
0
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
2019
|
$
|
-
|
|
$
|
0
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
There were no outstanding equity awards held by
executive officers at December 31, 2019 and December 31, 2020.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company do
not receive any fees for meetings that they attend, but they are entitled to reimbursement for reasonable expenses
incurred while attending such meetings. In 2020 and 2019 no compensation was paid to the Company’s directors for their
services.
15
EMPLOYMENT AGREEMENT
Effective August 1, 1994, the Company entered into
an employment agreement with Ronald S. Boreta, the Company's President, and Chief Executive Officer, pursuant to which
he received a base salary that was increased to $120,000 in beginning the year ended December 31, 1996. The term of the
employment agreement ended in May 2013, but he continued to be employed by the Company on the same basis. Ronald S.
Boreta received the use of an automobile, for which the Company paid all expenses and full medical and dental coverage.
These arrangements ended in connection with the closing of the Transfer Agreement in October 2016. Ronald S.
Boreta has agreed that for a period of three years from the termination of his employment agreement that he will not
engage in a trade or business similar to that of the Company.
16
ITEM 12. SECUIRTY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of March 25,
2021, the stock ownership of each person known by the Company to be the beneficial owner of five percent or more of the
Company’s common stock, each Executive Officer and Director individually, and all Directors and Executive Officers of
the Company as a group. Except as noted, each person has sole voting and investment power with respect to the
shares.
NAME AND ADDRESS
OF BENEFICIAL OWNERS
|
AMOUNT AND
NATURE
OF BENEFICIAL OWNERSHIP
|
|
|
PERCENT
OF CLASS
|
|
Ronald S. Boreta
6730 Las Vegas Blvd. South
Las Vegas, NV 89119
|
960,484
|
(1)
|
|
16.97
|
%
|
|
|
|
|
|
|
|
ASI Group, LLC
Investment AKA, LLC c/o Agassi
Enterprises, Inc.
3883 Howard Hughes Pkwy, 8th Fl.
Las Vegas, NV 89109
|
1,589,167
|
(4)
|
|
28.13
|
%
|
|
|
|
|
|
|
|
John Boreta
6730 Las Vegas Blvd. South
Las Vegas, NV 89119
|
811,439
|
(2)
|
|
14.34
|
%
|
|
|
|
|
|
|
|
Boreta Enterprises, Ltd.
6730 Las Vegas Blvd. South
Las Vegas, NV 89119
|
360,784
|
(3)
|
|
6.38
|
%
|
|
|
|
|
|
|
|
Steve Miller
3883 Howard Hughes Pkwy., 8th Fl.
Las Vegas, NV
89169
|
34,000
|
(5)
|
|
0.60
|
%
|
|
|
|
|
|
|
|
Cara Corrigan
4712 Park Vista CT
Reno, NV 89502
|
34,000
|
(5)
|
|
0.60
|
%
|
|
|
|
|
|
|
|
All Directors and Executive Officers as a
Group (4 persons)
|
1,839,923
|
(6)
|
|
32.52
|
%
|
|
(1)
|
Includes 602,229 shares held directly; 248,255 shares which represents Ronald
Boreta's share of the Common Stock held by Boreta Enterprises, Ltd.; and 110,000 shares held by his son.
|
17
(2) Includes 591,735 shares held directly; 108,704
shares which represents John Boreta's share of the Common Stock held by Boreta Enterprises Ltd.; and 110,000 shares held
by his daughter.
(3) Direct ownership of shares held by Boreta
Enterprises Ltd., a limited liability company owned by Ronald and John Boreta and the Estate of Vaso Boreta. Boreta
Enterprises Ltd. percentage ownership is as follows:
|
Ronald S. Boreta
|
68.81
|
%
|
|
John Boreta
|
30.13
|
%
|
|
Estate of Vaso Boreta
|
1.06
|
%
|
(4) ASI Group LLC and Investment AKA, LLC are both Nevada
limited liability company’s whose members include Andre K. Agassi.
(5) All shares are owned directly.
(6) Includes shares beneficially held by the four named Directors and
Executive Officers.
EQUITY COMPENSATION PLAN INFORMATION
As of December 31, 2020, the Company had no
compensation plans (including individual compensation arrangements) under which equity securities of the Company were
authorized for issuance in the future.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
Related Party Transactions
AAGC’s employees have provided
administrative/accounting support for the Company and two golf retail stores: one named Saint Andrews Golf Shop ("Saint
Andrews") and the other one named Las Vegas Golf and Tennis ( “Westside Store”), owned by Ronald Boreta, the
Company's President, and John Boreta, a Director of the Company. The Saint Andrews store is the retail tenant in the
golf center. On October 18, 2016, AAGC ceased to be a subsidiary of the Company as a result of the closing of the
Transfer Agreement.
In addition to the administrative/accounting
support provided by AAGC to the above stores, the Company received funding for operations from these and various other
stores owned by Ronald Boreta and John Boreta. These funds helped pay for office supplies, phone charges, postages and
salaries. The net amount due to these stores totaled $361,987 and $301,307 as of December 31, 2020 and 2019,
respectively. The amounts are non-interest bearing and due out of available cash flows of the Company.
Until October 2016,
both Ronald Boreta and John Boreta continued to defer half of their monthly salaries until the Company was in a more
positive financial state. The amounts deferred for 2016 (through October 18) were $85,000. The obligations to pay
the deferred salaries were assumed by AAGC in connection with the closing of the Transfer Agreement.
18
On June 10, 2016, the Company
entered into a Transfer Agreement for the sale and transfer of the Company’s remaining 51% interest in AAGC, which
constituted substantially all of the Company’s assets. On October 18, 2016, the Company completed the closing of
the Transfer Agreement pursuant to which the Company transferred the 51% interest in AAGC to Ronald Boreta and John
Boreta (the “Boretas”), and also issued to the Boretas 1,000,000 shares of the Company’s common stock, in exchange for
the cancellation of promissory notes held by the Boretas and the interest accrued thereon totaling approximately
$8,613,000.
In connection with the closing of
the Transfer Agreement, AAGC assumed the obligation of the Company to pay Ronald Boreta for deferred salary which
currently totals approximately $320,000. In addition, AAGC cancelled approximately $4,125,000 in advances previously
made by it to the Company to fund its operations.
Also in connection with the
closing of the Transfer Agreement, entities controlled by the Boretas cancelled approximately $1,367,000 owed to them by
the Company. The Company cancelled approximately $27,605 owed to the Company by entities controlled by the
Boretas.
Other Transactions
John Boreta, who became a Director of the Company
in 2013, has been employed by All-American Golf Center (“AAGC”), which was a subsidiary of the Company until October
2016, as its general manager for over 13 years. On June 15, 2009, AAGC entered into an employment agreement with John
Boreta. The employment agreement was for a period through June 15, 2012 and provided for a base annual salary of
$75,000. Although the term of the employment agreement ended in June 2012, he continued to be employed on the same
basis. During 2016, John Boreta received compensation of $81,000 for his services in that capacity, which included an
auto allowance of $6,000. He also received medical compensation of $13,313 for 2016. The Company’s Board of
Directors believes that the above transactions were on terms no less favorable to the Company than if the transactions
were with unrelated third parties.
During 2017, Ron Boreta agreed to forgive an auto
allowance payable to him in the amount of $9,783 which was accounted as capital contribution.
Director Independence
The Company has determined that Steve Miller is an
independent director as defined under the rules used by the NASDAQ Stock Market.
19
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT FEES
The aggregate fees billed for fiscal years ended
December 31, 2020 and 2019 by RBSM LLP for professional services rendered for the audit of the Company’s annual
financial statements and review of financial statements included in the Company’s quarterly reports on Form 10-Q were
$36,000 during each year.
AUDIT RELATED FEES
Not Applicable.
TAX FEES
The aggregate fees billed for tax services rendered
by RBSM LLP for tax compliance and tax advice for the fiscal years ended December 31, 2020 and 2019, were $5,000 during
each year.
ALL OTHER FEES
None.
AUDIT COMMITTEE PRE-APPROVAL POLICY
Under provisions of the Sarbanes-Oxley Act of 2002,
the Company’s principal accountant may not be engaged to provide non-audit services that are prohibited by law or
regulation to be provided by it, and the Board of Directors (which serves as the Company’s audit committee) must
pre-approve the engagement of the Company’s principal accountant to provide audit and permissible non-audit services.
The Company’s Board has not established policies or procedures other than those required by applicable laws and
regulations.
20
NOTES TO FINANCIAL
STATEMENTS
NOTE 1. ORGANIZATIONAL STRUCTURE AND BASIS OF PRESENTATION
a. BASIS OF PRESENTATION
The financial statements of the Company have been prepared in
accordance with the accounting principles generally accepted in the United States of America (“GAAP”).
b. BUSINESS ACTIVITIES
The Company was incorporated in Nevada on March 6,
1984, under the name “Sporting Life, Inc.” The Company’s name was changed to “St. Andrews Golf Corporation” on December
27, 1988, to “Saint Andrews Golf Corporation” on August 12, 1994, and to All-American SportPark, Inc. (“AASP”) on
December 14, 1998. Effective February 15, 2021, the name of the Company was changed to “Global Acquisitions
Corporation.”
In December 1994, the Company completed an initial
public offering of 1,000,000 Units, each Unit consisting of one share of Common Stock and one Class A Warrant. The net
proceeds to the Company from this public offering were approximately $3,684,000. The Class A Warrants expired
unexercised on March 15, 1999.
On July 12, 1996, the Company entered into a lease
agreement of land in Las Vegas, Nevada, on which the Company developed a Golf Center and All-American SportPark,
(“SportPark”) properties. The discontinued SportPark that opened for business in October 1998 was disposed of in May
2001.
On June 15, 2011, the Company entered into a Stock
Transfer Agreement with Saint Andrews pursuant to which the Company transferred 49% of the outstanding common stock of
All-American Golf Center, Inc. ("AAGC"), a subsidiary of the Company, to Saint Andrews Golf Shop, Ltd. ("Saint Andrews")
in exchange for the cancellation of $600,000 of debt owed by the Company to Saint Andrews.
Saint Andrews is owned by Ronald Boreta, the
Company's President and a Director and John Boreta, his brother. John Boreta is a principal shareholder of the Company
and became Director of the Company in 2012. The debt owed by the Company to Saint Andrews was from advances made in the
past by Saint Andrews to provide the Company with working capital.
On June 10, 2016, the Company entered into a Transfer
Agreement for the sale and transfer of the Company’s 51% interest in All American Golf Center, Inc. (“AAGC”), which
constituted substantially all of the Company’s assets. On October 18, 2016, the Company completed the closing of
the Transfer Agreement pursuant to which the Company transferred the 51% interest in AAGC to Ronald Boreta and John
Boreta (the “Boretas”), and also issued to the Boretas 1,000,000 shares of the Company’s common stock, in exchange for
the cancellation of promissory notes held by the Boretas and accrued interest of $8,864,255.
F-6
In connection with the closing of the Transfer Agreement, AAGC
assumed the obligation of the Company to pay Ronald Boreta for deferred salary of $340,000. In addition, AAGC cancelled
$4,267,802 in advances previously made by it to the Company to fund its operations.
Also in connection with the closing of the Transfer Agreement,
entities controlled by the Boretas cancelled $1,286,702 owed to them by the Company. In addition, the Company cancelled
$27,615 of amounts due from entities controlled by the Boretas.
As a result of the Transfer Agreement, on October 18, 2016,
the Company derecognized the assets and liabilities of AAGC.
The sale and transfer of the Company’s 51% interest in AAGC to
the controlling shareholders of the Company is a common control transaction and recorded at book value. Any difference
between the proceeds received by the Company and the book value of assets and liabilities of AAGC, cancellation of
promissory notes and accrued interest, assumption of deferred salary, cancellation of amounts due to and due from
entities controlled by the Boretas is recognized as a capital transaction with no gain or loss recorded.
At this time, the Company’s purpose is to seek,
investigate and, if such investigation warrants, acquire an interest in business opportunities presented to the Company
by persons or firms who or which desire to seek the perceived advantages of a corporation whose securities are
registered pursuant to the Exchange Act. The Company will not restrict our search to any specific business or
geographical location.
c. RECLASSIFICATIONS
No reclassifications have been made in prior
periods’ financial statements to conform to classifications used in the current period.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
a. USE OF ESTIMATES
The preparation of financial statements in
conformity with accounting principles generally accepted in the United States requires management 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 the reported amount of revenues and expenses during the
reporting period. Significant estimates and assumptions made by management include, but are not limited to, the
determination of the provision for income taxes, and valuation of fixed assets. The Company bases the estimates on
historical experience and on various other assumptions that are believed to be reasonable. Actual results could
differ from those estimates.
b. CASH AND CASH EQUIVALENTS
All highly liquid investments with original
maturities of three months or less are classified as cash and cash equivalents. The fair value of cash and cash
equivalents approximates the amounts shown on the financial statements. Cash and cash equivalents consist of
unrestricted cash in accounts maintained with major financial institutions.
F-7
c. INCOME TAXES
The Company accounts for income taxes under the
asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements. Under this method, deferred tax
assets and liabilities are determined based on the differences between the financial statements and tax basis of assets
and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that
includes the enactment date. The Company records net deferred tax assets to the extent the Company believes these assets
will more likely than not be realized. In making such determination, the Company considers all available positive and
negative evidence, including future reversals of existing taxable temporary differences, projected future taxable
income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred
tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be
able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make
an adjustment to the valuation allowance which would reduce the provision for income taxes.
The Company follows the accounting guidance which
provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the
position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based
on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective
date to be recognized initially and in subsequent periods. Also included is guidance on measurement, de-recognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition.
d. STOCK-BASED COMPENSATION
The Company accounts for all compensation related
to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date
based on the value of the award and is recognized over the service period, which is usually the vesting period. Stock
issued for compensation is valued using the market price of the stock on the date of the related agreement.
e. EQUIPMENT
Equipment (Note 5) are stated at cost. Depreciation
and amortization is provided for on a straight-line basis over the following estimated useful lives of the assets:
|
Furniture and equipment
|
3-10 years
|
F-8
f. ADVERTISING
The Company expenses advertising costs as incurred.
The Company incurred no advertising expenses for the twelve months ended December 31, 2019 and 2018, respectively.
g. REVENUES
The Company earned no revenues for the twelve months ended December 31,
2020 and 2019, respectively.
h. GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses consisted
principally of management, accounting and other administrative employee payroll and benefits.
i. IMPAIRMENT OF LONG-LIVED ASSETS
Long-lived assets, including property and
equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
the long-lived asset may not be recoverable. If the long-lived asset or group of assets is considered to be impaired, an
impairment charge is recognized for the amount by which the carrying amount of the asset or group of assets exceeds its
fair value. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less cost
to sell.
j. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted ASC 820 which defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair
value hierarchy in order to increase the consistency and comparability of fair value measurements and the related
disclosures. Under this standard certain assets and liabilities must be measured at fair value, and disclosures are
required for items measured at fair value.
The Company currently does not have non-financial assets or
non-financial liabilities that are required to be measured at fair value on a recurring basis. The Company’s financial
assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are
as follows:
Level 1 - Inputs are unadjusted quoted prices in active
markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair
value of the Company’s cash is based on quoted prices and therefore classified as Level 1.
Level 2 - Inputs include quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not
active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield
curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or
other means (market corroborated inputs).
F-9
Level 3 - Unobservable inputs that reflect management’s
assumptions about the assumptions that market participants would use in pricing the asset or liability.
At December 31, 2020, and 2019, the carrying amount of prepaid, accounts payable and
accrued liability, accounts payable and accrued liability–related parties, due to related parties and notes payable and
accrued interest payable–related parties approximate fair value because of the short maturity of these instruments.
k. EARNINGS (LOSS) PER SHARE
Basic earnings per share excludes any dilutive
effects of options, warrants, and convertible securities. Basic earnings per share is computed using the weighted
average number of shares of common stock and common stock equivalent shares outstanding during the period. Common stock
equivalent shares are excluded from the computation if their effect is antidilutive. The Company did not have any stock
equivalent shares for the years ended December 31, 2020 and 2019.
Loss per share is computed by dividing reported net
loss by the weighted average number of common shares outstanding during the period. The weighted-average number of
common shares used in the calculation of basic loss per share was 5,658,123 in 2020 and 5,658,123 in 2019,
respectively.
l. RECENT ACCOUNTING POLICIES
The Company believes there was no new accounting
guidance adopted but not yet effective that either has not already been disclosed in prior reporting periods or is
relevant to the readers of the Company’s financial statements.
The Company
continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is
determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study
to determine the consequence of the change to its financial statements and assures that there are proper controls in
place to ascertain that the Company’s financials properly reflect the change.
NOTE 3. GOING CONCERN
The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the accompanying financial statements, for the year ended December 31, 2020,
the Company had net loss of $70,828. As of December 31, 2020, the Company had an accumulated deficit of $29,119,154 and
a stockholder deficit of $384,584.
The Company’s management believes that its
operations may not be sufficient to fund operating cash needs and debt service requirements over at least the next 12
months. As described in Note 1, the Company’s Board of Directors determined that it was in the best interests of the
Company to enter into the Transfer Agreement with the Boretas. The closing of that agreement resulted in the
elimination of nearly all of the debt of the Company. However, after the closing, the Company has no significant
assets and continues to depend on affiliates to provide funds to pay its ongoing expenses. These factors raise
substantial doubt about the company’s ability to continue as a going concern within one year after the date that the
financials are issued.
F-10
The financial statements do not
include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to continue as a going concern.
NOTE 4. RELATED PARTY TRANSACTIONS
Due to related
parties
AAGC has advanced funds to pay
certain expenses of the Company. The Company formerly owned a 51% interest in AAGC.
At December 31, 2020 and December
31, 2019, the total amounts owed to AAGC were $361,987 and $301,307, respectively.
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment included the following as of
December 31:
|
|
|
2020
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Furniture and Equipment
|
$
|
11,692
|
|
|
$
|
11,692
|
|
|
Less: Accumulated Depreciation
|
|
11,692
|
|
|
|
11,692
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Depreciation expenses totaled $0 for the years ended December 31, 2020
and 2019.
NOTE 6. COMMITMENTS
The Company has no commitments.
NOTE 7. INCOME TAXES
The Company accounts
for income taxes under ASC Topic 740: Income Taxes, which requires the recognition of deferred tax assets and
liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and
liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC
Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of
deferred tax assets.
On December 22, 2017,
the U.S. federal government enacted the Tax Cuts and Jobs Act (the “2017 Tax Act”). Management reviewed and incorporated
the new tax bill implications in the 2017 financial statements. The main change is the re-measurement of deferred taxes
at the new corporate tax rate of 21%, which reduced the Company’s net deferred tax assets, before valuation allowance,
by $2.2 million. Due to full valuation allowance, the change in deferred taxes was fully offset by the change in
valuation allowance.
F-11
The components of
income tax provision (benefit) for the years ended December 31,2020 and 2019 are as follow:
|
|
|
2020
|
|
|
|
2019
|
|
|
Current taxes:
|
|
|
|
|
|
|
|
|
Federal
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total current taxes
|
|
-
|
|
|
|
-
|
|
|
Deferred tax provision (benefit)
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (benefit)
|
$
|
-
|
|
|
$
|
-
|
|
A reconciliation of the
income tax (provision) benefit at the statutory rate of 21% for the years ended December 31, 2020 and 2019 to the
Company’s effective tax rate is as follows:
|
|
|
2020
|
|
|
|
2019
|
|
|
U.S.
Statutory tax rate
|
|
21.0
|
%
|
|
|
21.0
|
%
|
|
Change in valuation reserve on
deferred tax assets
|
|
(21
|
)%
|
|
|
(21
|
)%
|
|
|
|
|
|
|
|
|
|
|
Income tax (provision) benefit
|
|
-
|
%
|
|
|
-
|
%
|
Significant components
of the Company’s deferred tax assets (liabilities) as of December 31, 2020 and 2019 are as follows:
|
|
|
2020
|
|
|
|
2019
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Net operating loss
carryforward
|
|
1,914,121
|
|
|
|
3,244,433
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
1,914,121
|
|
|
|
3,244,433
|
|
|
Valuation reserve
|
|
(1,914,121
|
)
|
|
|
(3,244,433
|
)
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets (liability)
|
$
|
-
|
|
|
$
|
-
|
|
As of December 31, 2020 and 2019, the Company had
available for income tax purposes approximately $9.1 million and $15.4 million respectively in federal net operating
loss carry forwards, which may be available to offset future taxable income. These loss carry-forwards expire in 2021
through 2040. The Company may be limited by Internal Revenue Code Section 382 in its ability to fully utilize its net
operating loss carry forwards due to possible future ownership changes. Management has established a 100% valuation
allowance against the net deferred tax asset since it appears more likely than not that it will not be realized.
The provision (benefit) for income taxes
attributable to income (loss) from continuing operations does not differ materially from the amount computed at the
federal income tax statutory rate.
F-12
NOTE 8. CAPITAL STOCK, STOCK OPTIONS, AND INCENTIVES
PREFERRED STOCK
Preferred stock, $0.001 par value, 10,000,000
shares authorized, no shares issued and outstanding as of December 31, 2020 and December 31, 2019. The Company’s
Board of Directors shall determine the rights, preferences, privileges and restrictions of the preferred stock,
including dividends rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund
terms and the number of shares constituting any series or the designation of any series.
COMMON STOCK
Effective February 15, 2021, the number of
authorized common stock, $0.001 par value, was increased to 500,000,000 shares. There were 5,658,123 and 5,658,123
shares of common stock issued and outstanding as of December 31, 2020 and December 31, 2019, respectively.
On August 15, 2017, the Company granted 34,000
shares of restricted common stock to one employee for services. The restricted common stock granted to the employee was
valued at $33,660 and will vest as follows: 33% of the shares on January 1, 2018, an additional 33% of the shares on
January 1, 2019, and the remaining 34% of the shares on January 1, 2020. The share-based compensation was
amortized ratably over the three year vesting period. The Company recorded share-based compensation of $0 and $14,177
for the years ended December 31, 2020 and 2019, respectively.
NOTE 9. SUBSEQUENT EVENTS
Management has evaluated all subsequent events
through the date of the filing and determined that there were none.
F-13