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Share Name | Share Symbol | Market | Type |
---|---|---|---|
American Security Resources Corporation (CE) | USOTC:ARSC | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.00 | 01:00:00 |
|
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
Nevada
|
90-0179050
|
|||
(State or Other Jurisdiction of Incorporation)
|
(IRS Employer Identification No.)
|
Large accelerated filer
|
|
Accelerated filer
|
|
Non-accelerated filer
|
|
Smaller reporting company
|
þ
|
(Do not check if a smaller reporting company)
|
PART I - FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements (Unaudited)
|
|
CONSOLIDATED BALANCE SHEETS
|
3 | |
CONSOLIDATED STATEMENTS OF OPERATIONS
|
4 | |
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
|
5 | |
CONSOILIDATED STATEMENTS OF CASH FLOWS
|
9 | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
10 | |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
13 |
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
15 |
Item 4.
|
Controls and Procedures
|
16 |
PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
17 |
Item 1A.
|
Risk Factors
|
17 |
Item 3.
|
Defaults Upon Senior Securities
|
17 |
Item 4.
|
Submission of Matters to a Vote of Security Holders
|
17 |
Item 5.
|
Other Information
|
17 |
Item 6.
|
Exhibits
|
17 |
June 30, 2010 (unaudited)
|
December 31, 2009
|
|
ASSETS
|
||
Cash in bank
|
$ 3,253
|
$ 12,399
|
Prepaid expenses
|
3,890
|
3,890
|
Total Current Assets
|
7,143
|
16,289
|
Equipment, net of accumulated depreciation of $131,569 and $119,413 respectively
|
31,588
|
43,744
|
Other assets
|
14,588
|
18,962
|
TOTAL ASSETS
|
$ 53,319
|
$ 78,995
|
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
|
||
CURRENT LIABILITIES
|
||
Accounts Payable
|
$ 355,396
|
$ 358,940
|
Other current liabilities
|
494,882
|
424,393
|
Convertible debentures (net of discount of $378,619 & $747,850 respectively
|
74,482
|
33,154
|
Accrued interest on convertible debentures
|
4,986
|
5,762
|
Derivative liability
|
661,248
|
971,270
|
Note Payable
|
40,850
|
-
|
Total Current Liabilities
|
1,631,844
|
1,793,519
|
Total Liabilities
|
1,631,844
|
1,793,519
|
SHAREHOLDERS' (DEFICIT)
|
||
Preferred Stock Series A - 1,000,000 shares authorized; $.001 par value; 1,000,000 shares issued and outstanding
|
1,000
|
1,000
|
Preferred Stock Series B - 1,000,000 shares authorized; $1 par value; 25,000 and -0- shares issued and outstanding respectively
|
-
|
-
|
Common stock – 17,999,999,999 shares authorized; $.001 par value; 11,986,223,120 & 5,420,381,610 shares issued and outstanding respectively
|
11,986,233
|
5,420,381
|
Additional paid in capital
|
43,132,996
|
48,485,093
|
Deficit accumulated during the development stage
|
(24,590,460)
|
(23,512,714)
|
Deficit accumulated from prior operations
|
(32,108,284)
|
(32,108,284)
|
Total Shareholder's (Deficit)
|
(1,578,525)
|
(1,714,524)
|
TOTAL LIABILITES AND SHAREHOLDERS' (DEFICIT)
|
$ 53,319
|
$ 78,995
|
Three months ended
June 30,
|
Six months ended
June 30,
|
Re-Entering Development Stage to
|
|||
2010
|
2009
|
2010
|
2009
|
June 30, 2010
|
|
General and administrative expenses
|
$277,974
|
$ 393,101
|
$ 580,549
|
$ 813,221
|
$ 17,565,677
|
Depreciation and amortization expense
|
6,078
|
8,706
|
12,156
|
17,412
|
159,843
|
Research and development expenses
|
172,762
|
124,488
|
307,268
|
286,399
|
5,176,269
|
Operating Loss
|
(456,814)
|
(526,295)
|
(899,973)
|
(1,117,032)
|
(22,901,789)
|
Other Income (Expenses):
|
|||||
Interest income
|
76,221
|
||||
Gain on stock payable
|
|||||
Permanent impairment of investment
|
(225,000)
|
||||
(Gain) Loss on derivative liability
|
219,259
|
(167,421)
|
310,022
|
(260,790)
|
137,317
|
Loss on license fee
|
(482,071)
|
||||
Penalty on debenture default
|
(297,375)
|
||||
Interest expense
|
(321,645)
|
(54,920)
|
(487,795)
|
(130,346)
|
(897,763)
|
Net Loss
|
(559,200)
|
(748,636)
|
(1,077,746)
|
(1,508,168)
|
(24,590,460)
|
Other comprehensive loss:
|
|||||
Changes in unrealized loss on investment available for sale
|
(86,538)
|
||||
$ (559,200)
|
$(748,636)
|
$ (1,077,746)
|
$(1,508,168)
|
$(24,676,998)
|
|
Loss per share - basic and fully diluted
|
$ (0.01)
|
$ (0.01)
|
$ (0.00)
|
$ (0.00)
|
|
Weighted average number of shares outstanding
|
8,759,899,943
|
1,577,627,644
|
7,532,592,984
|
2,151,598,694
|
No. of Shares
|
Paid-in Capital and Par Value
|
Accumulated Deficit
|
Comprehensive Loss
|
Total
|
||
Development Stage
|
Prior Operations
|
|||||
Balance at 12/31/04
|
35,319,977
|
$29,741,757
|
$ (29,652,400)
|
$ -
|
$ -
|
$ 89,357
|
Shares issued for:
|
||||||
Cash
|
2,000,000
|
77,000
|
77,000
|
|||
director services
|
2,624,501
|
248,567
|
248,567
|
|||
Services
|
8,231,288
|
1,429,304
|
1,429,304
|
|||
warrant expense
|
-
|
1,505,897
|
1,505,897
|
|||
Compensation
|
12,000,000
|
2,040,000
|
2,040,000
|
|||
equity swap investment
|
1,500,000
|
225,000
|
225,000
|
|||
Net loss
|
(5,384,548)
|
(5,384,548)
|
||||
Other comprehensive loss
|
(86,538)
|
(86,538)
|
||||
Balance, 12/31/05
|
61,675,766
|
35,267,525
|
(35,036,948)
|
-
|
(86,538)
|
144,039
|
Reclassification of accumulated deficit
|
32,108,284
|
(32,108,284)
|
||||
Shares issued for:
|
||||||
Cash
|
23,744,250
|
1,905,990
|
1,905,990
|
|||
director services
|
6,698,000
|
690,885
|
690,885
|
|||
consulting service
|
14,786,051
|
1,724,639
|
1,724,639
|
|||
accrued liabilities
|
633,292
|
132,539
|
132,539
|
|||
cashless exercise of warrants
|
1,129,935
|
-
|
-
|
|||
employee and contractor bonuses
|
37,500
|
42,188
|
42,188
|
|||
Warrants issued for cash
|
150,000
|
150,000
|
||||
Warrants issued for services
|
2,405,847
|
2,405,847
|
||||
Modification of Warrants
|
1,127,998
|
1,127,998
|
||||
Net loss
|
(8,599,770)
|
(8,599,770)
|
||||
Other equity items
|
(84,070)
|
86,538
|
2,468
|
|||
Balance, 12/31/06
|
109,604,794
|
43,363,541
|
(11,528,434)
|
(32,108,284)
|
-
|
(273,177)
|
Less: par value of common stock ($0.01)
|
109,604
|
|||||
Additional paid-in capital
|
$43,253,937
|
No. of Shares
|
Paid-in Capital and Par Value
|
Accumulated Deficit
|
Comprehensive Loss
|
Total
|
||
Development Stage
|
Prior Operations
|
|||||
Balance, 12/31/06
|
109,604,794
|
43,363,541
|
(11,528,434)
|
(32,108,284)
|
-
|
(273,177)
|
Shares issued for
|
||||||
Cash
|
46,850,000
|
1,479,518
|
1,479,518
|
|||
O&D fees
|
2,931,818
|
126,435
|
126,435
|
|||
Consulting service
|
8,031,407
|
1,068,028
|
1,068,028
|
|||
accrued liabilities
|
11,289,917
|
510,151
|
510,151
|
|||
cashless exercise of warrants
|
76,873
|
-
|
-
|
|||
Technology License
|
2,000,000
|
82,000
|
82,000
|
|||
Warrants issued for services
|
1,303,221
|
1,303,221
|
||||
Technology License
|
70,150
|
70,150
|
||||
Beneficial conversion feature related to convertible note
|
34,509
|
34,509
|
||||
Net loss
|
(5,486,135)
|
(5,486,135)
|
||||
Balance, 12/31/07
|
180,784,809
|
48,037,553
|
(17,014,569)
|
(32,108,284)
|
-
|
(1,085,300)
|
Less: par value of common stock ($0.01)
|
180,785
|
|||||
Additional paid-in capital
|
$47,015,484
|
No. of Shares
|
Paid-in Capital and Par Value
|
Accumulated Deficit
|
Comprehensive Loss
|
Total
|
|||
Development Stage
|
Prior Operations
|
||||||
Balance, 12/31/07
|
180,784,809
|
48,037,553
|
(17,014,569)
|
(32,108,284)
|
-
|
(1,085,300)
|
|
Shares issued for
|
|||||||
Cash
|
13,250,000
|
178,000
|
178,000
|
||||
O&D fees
|
66,311,128
|
658,780
|
658,780
|
||||
Consulting service
|
54,373,998
|
510,746
|
510,746
|
||||
Accrued liabilities
|
47,984,818
|
983,945
|
983,945
|
||||
Cashless exercise of warrants
|
18,584,615
|
-
|
-
|
||||
Cashful Warrants
|
27,011,375
|
173,290
|
173,290
|
||||
Compensation expense
|
27,000
|
27,000
|
|||||
Warrants issued for services
|
196,170
|
196,170
|
|||||
Beneficial conversion feature related to convertible note
|
94,403,861
|
457,800
|
457,800
|
||||
Net loss
|
(3,818,868)
|
(3,818,868)
|
|||||
Balance, 12/31/08
|
502,704,604
|
51,223,284
|
(20,833,437)
|
(32,108,284)
|
-
|
(1,718,437)
|
|
Less: par value of common stock ($0.01)
|
502,705
|
||||||
Additional paid-in capital
|
$50,720,579
|
||||||
Plus 1,000,000 shares of Preferred Stock at .001 par value
|
1,000
|
||||||
Total stockholders’ equity
|
(1,717,437)
|
Balance 12/31/08
|
502,704,604
|
51,223,284
|
(20,833,437)
|
(32,108,284)
|
-
|
(1,718,437)
|
Shares issued for:
|
||||||
Cash
|
238,791,067
|
111,945
|
111,945
|
|||
Officer & Director fees
|
189,336,735
|
87,550
|
87,550
|
|||
Consulting services
|
2,116,514,414
|
1,488,450
|
1,488,450
|
|||
Cashless exercise of warrants
|
28,036,255
|
-
|
-
|
|||
Cashful Warrants
|
55,000,000
|
28,111
|
28,111
|
|||
Conversion of Series B Preferred
|
75,000,000
|
25,000
|
25,000
|
|||
Accrued officer compensation pursuant to wrap around agmt.
|
935,079,111
|
|||||
Beneficial conversion feature related to convertible note
|
1,279,919,424
|
734,685
|
734,685
|
|||
Net loss
|
(2,676,277)
|
(2,679,277)
|
||||
Balance 12/31/09
|
5,420,381,610
|
53,905,474
|
(23,512,714)
|
(32,108,284)
|
-
|
(1,715,524)
|
Less par value of common stock $.001
|
(5,420,381)
|
|||||
Additional paid-in-capital
|
$48,485,093
|
|||||
Plus 1,000,000 shares of Preferred Stock Series A at $.001 par value
|
1,000
|
|||||
Total Stockholders' Equity
|
(1,714 524)
|
Balance 12/31/09
|
5,420,381,610
|
53,905,474
|
(23,512,714)
|
(32,108,284)
|
-
|
(1,715,524)
|
Shares issued for:
|
||||||
Cash
|
318,811,459
|
56,253
|
56,253
|
|||
Consulting services
|
2,740,363,385
|
586,492
|
586,492
|
|||
Accrued officer compensation pursuant to wrap around agreement
|
666,666,666
|
75,000
|
75,000
|
|||
Beneficial conversion feature related to convertible note
|
2,840,000,000
|
496,000
|
496,000
|
|||
Net loss
|
(1,077,746)
|
(1,077,746)
|
||||
Balance 6/30/810
|
11,986,223,120
|
55,119,219
|
(24,590,460)
|
(32,108,284)
|
-
|
(1,579,525)
|
Less par value of common stock $.001
|
11,986,223
|
|||||
Additional paid-in-capital
|
$43,132,996
|
|||||
Plus 1,000,000 shares of Preferred Stock Series A at $.001 par value
|
1,000
|
|||||
Total Stockholders' Equity
|
(1,578,525)
|
Six Months Ended June 30,
|
Re-entering Development Stage to
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
2010
|
2009
|
30-Jun-10
|
Net loss
|
$(1,077,746)
|
$(1,508,168)
|
$(24,590,460)
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|||
Depreciation and amortization
|
12,156
|
17,412
|
178,833
|
Amortization of debt discount and deferred financing cost
|
289,383
|
98,292
|
392,348
|
(Gain) Loss on derivatives
|
(235,022)
|
260,790
|
(62,317)
|
Loss on license fee
|
-
|
-
|
482,071
|
Accretion of capital lease obligation
|
-
|
-
|
|
Contingent penalty
|
-
|
297,375
|
|
Common stock issued for services
|
531,273
|
770,503
|
10,847,651
|
Preferred stock issued for services
|
-
|
28,000
|
|
Discounts on convertible debenture
|
-
|
-
|
|
Stock option and warrant expense
|
-
|
4,552,501
|
|
Gain on stock payable
|
|||
Permanent impairment of investment sale
|
-
|
-
|
225,000
|
Contingent liquidated damages expense
|
-
|
-
|
150,000
|
Change in operating assets and liabilities:
|
|||
Prepaid expenses
|
4,374
|
77,976
|
(19,530)
|
Accrued interest receivable
|
-
|
4,968
|
|
Deferred finance costs
|
-
|
(26,252)
|
|
Accounts payable
|
(3,544)
|
(51,991)
|
297,908
|
Stock payable
|
20,000
|
||
Accrued liabilities
|
250,943
|
165,046
|
1,893,872
|
Accrued interest
|
(776)
|
29,028
|
26,093
|
(228,959)
|
(121,112)
|
(5,321,939)
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|||
Purchase of property and equipment
|
-
|
(151,832)
|
|
License agreement
|
-
|
(308,501)
|
|
Net cash used in investing activities
|
-
|
(460,333)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||
Proceeds from the sale of common stock
|
56,253
|
36,075
|
2,318,118
|
Proceeds from the sale of preferred stock
|
25,000
|
||
Proceeds from convertible debentures
|
150,000
|
1,015,000
|
|
Shareholder loans
|
13,560
|
11,901
|
|
Paydown on note receivable
|
19,000
|
575,000
|
|
Net borrowings/(pay downs) on line of credit
|
-
|
45,490
|
|
Settlement of derivative liabilities
|
(101,934)
|
||
Proceeds from the exercise of warrants
|
20,236
|
1,830,920
|
|
Net cash provided from financing activities
|
219,813
|
100,311
|
5,694,495
|
Net change in cash and cash equivalents
|
(9,146)
|
(20,801)
|
(87,780)
|
Cash and cash equivalents, beginning of period
|
12,399
|
25,121
|
91,033
|
$3,253
|
$4,320
|
$3,253
|
|
Supplemental disclosure on non-cash financing activities:
|
|||
Stock issued for accrued expenses
|
$32,743
|
$65,949
|
$885.236
|
Stock issued for conversion of debt
|
$496,000
|
572,385
|
|
Obligation to pay capital leases
|
$
|
||
Cash paid for interest and income taxes
|
$
|
$3,026
|
|
Cashless exercise of warrants
|
19,715
|
Outstanding Balance of Convertible Debenture
|
Unamortized Discount
|
|
December 13, 2007 Debenture
|
$350,000
|
$350,000
|
February 28, 2008 Debenture
|
182,949
|
28,916
|
Total Convertible Debentures at June 30, 2010
|
$542,004
|
$378,916
|
Derivative Liability 6/30/10
|
Gain (Loss) on Derivative six months ended 6/30/10
|
||
February 28, 2008 Debenture
|
$436,066
|
$2,867
|
|
May 16, 2008 Debenture
|
220,474
|
(313,593)
|
|
Warrants Outstanding
|
4,708
|
704
|
|
Derivative Liability
|
$661,248
|
$(310,022)
|
Exhibit
Number
|
Description of Document
|
31.1
|
Rule 13a-14(a)/ 15d-14(a) Certification of Frank Neukomm, Principal Executive Officer of the Company.
|
32.1
|
Certification Pursuant to 18 U.S.C. section 1350 of Frank Neukomm, Principal Executive Officer of the Company.
|
American Security Resources Corporation
|
||
|
||
Date: August 16, 2010
|
By:
|
/s/Frank Neukomm
|
President and Chief Executive Officer, Principal Executive Officer
|
||
By:
|
/s/ John A. Wilkinson
|
|
Chief Financial Officer
|
||
By:
|
/s/ Robert Farr
|
|
Principal Accounting Officer
|
||
1 Year American Security Resour... (CE) Chart |
1 Month American Security Resour... (CE) Chart |
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