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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 |
September 30, 2010 (unaudited)
|
December 31, 2009
|
|
ASSETS
|
||
Cash in bank
|
$ 25,237
|
$ 12,399
|
Prepaid expenses
|
3,890
|
3,890
|
Total Current Assets
|
29,127
|
16,289
|
Equipment, net of accumulated depreciation of $138,163 and $89,615 respectively
|
24,994
|
43,744
|
Other assets
|
12,401
|
18,962
|
TOTAL ASSETS
|
$ 66,522
|
$ 78,995
|
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
|
||
CURRENT LIABILITIES
|
||
Accounts Payable
|
$ 355,156
|
$ 358,940
|
Other current liabilities
|
539,789
|
424,393
|
Convertible debentures (net of discount of $322,574 & $747,850 respectively
|
135,317
|
33,154
|
Accrued interest on convertible debentures
|
4,986
|
5,762
|
Derivative liability
|
575,195
|
971,270
|
Total Current Liabilities
|
1,610,443
|
1,793,519
|
Total Liabilities
|
1,610,443
|
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
|
0
|
|
Common stock – 19,999,999,999 shares authorized; $.001 par value; 19,040,219,420 & 5,420,381,610 shares issued and outstanding respectively
|
19,040,219
|
5,420,381
|
Additional paid in capital
|
36,701,285
|
48,485,093
|
Deficit accumulated during the development stage
|
(25,178,141)
|
(23,512,714)
|
Deficit accumulated from prior operations
|
(32,108,284)
|
(32,108,284)
|
Total Shareholder's (Deficit)
|
(1,543,921)
|
(1,714,524)
|
TOTAL LIABILITES AND SHAREHOLDERS' (DEFICIT)
|
$ 66,522
|
$ 78,995
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
Re-Entering Development Stage to
|
|||
2010
|
2009
|
2010
|
2009
|
September 30, 2010
|
|
General and administrative expenses
|
$434,182
|
$ 433,422
|
$1,014,731
|
$ 1,365,003
|
$ 17,999,859
|
Depreciation and amortization expense
|
6,594
|
6,193
|
18,750
|
17,412
|
166,437
|
Research and development expenses
|
87,934
|
112,167
|
395,729
|
286,399
|
5,264,730
|
Operating Loss
|
(528,710)
|
(551,782)
|
(1,429,210)
|
(1,668,814)
|
(23,431,026)
|
Other Income (Expenses):
|
|||||
Interest income
|
76,221
|
||||
Permanent impairment of investment
|
(225,000)
|
||||
(Loss) Gain on derivative liability
|
86,053
|
340,642
|
396,075
|
79.852
|
223,370
|
Loss on license fee
|
(482,071)
|
||||
Loss on default on convertible debentures
|
(297,375)
|
||||
Interest expense
|
(144,497)
|
(126,783)
|
(632,292)
|
(257,129)
|
(1,042,260)
|
Net Loss
|
(587,154)
|
(337,923)
|
(1,665,427)
|
(1,846,091)
|
(25,178,141)
|
Other comprehensive loss:
|
|||||
Changes in unrealized loss on investment available for sale
|
(86,538)
|
||||
$ (587,154)
|
$(337,923)
|
$ (1,665,427)
|
$(1,846,091)
|
$(25,264,679)
|
|
Loss per share - basic and fully diluted
|
$ (0.01)
|
$ (0.01)
|
$ (0.01)
|
$ (0.00)
|
|
Weighted average number of shares outstanding
|
14,733,464,584
|
13,028,219,420
|
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)
|
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)
|
|
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)
|
Accumulated Deficit
|
||||||
No. of Shares
|
Paid-in Capital and Par Value
|
Development Stage
|
Prior Operations
|
Comprehensive Loss
|
Total
|
|
Balance 12/31/08
|
(20,833,437)
|
(32,108,284)
|
||||
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
|
206,449
|
||||
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
|
(23,509,714)
|
(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 12/31/09
|
(1,714 524)
|
Balance 01/01/10
|
5,420,381,610
|
53,905,474
|
(23,509,714)
|
(32,108,284)
|
-
|
(1,715,524)
|
Shares issued for:
|
||||||
Cash
|
506,311,459
|
71,253
|
71,253
|
|||
Officer & Director fees
|
100,000,000
|
8,000
|
8,000
|
|||
Consulting services
|
4,796,609,685
|
865,577
|
865,577
|
|||
Cashless exercise of warrants
|
||||||
Cashful Warrants
|
||||||
Conversion of Series B Preferred
|
||||||
Accrued officer compensation pursuant to wrap around agmt.
|
2,030,666,666
|
127,500
|
127,500
|
|||
Beneficial conversion feature related to convertible note
|
6,186,250,000
|
763,700
|
763,700
|
|||
Net loss
|
(1,665,427)
|
(1,665,427)
|
||||
Balance 9/30/10
|
19,040,219,420
|
55,741,504
|
(25,178,141)
|
(32,108,284)
|
(1,544,921)
|
|
Less par value of common stock $.001
|
19,040,219
|
|||||
Additional paid-in-capital
|
36,701,285
|
|||||
Plus 1,000,000 shares of Preferred Stock Series A at $.001 par value
|
1,000
|
|||||
Total Stockholders' Equity
|
(1,543,921)
|
Nine Months Ended September 30,
|
Re-entering Development
|
||
CASH FLOWS FROM OPERATING ACTIVITIES
|
2010
|
2009
|
Stage to 30-Sep-10
|
Net loss
|
$(1,665,427)
|
$(1,846,091)
|
$(25,178,141)
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|||
Depreciation and amortization
|
18,750
|
23,605
|
185,427
|
Amortization of debt discount and deferred financing cost
|
425,276
|
248,440
|
528,241
|
(Gain)/Loss on derivatives
|
(396,075)
|
(79,852)
|
(223,370)
|
Loss on license fee
|
-
|
-
|
482,071
|
Contingent penalty
|
-
|
-
|
297,375
|
Common stock issued for services
|
757,578
|
1,095,845
|
11,020,006
|
Common stock issued for officer compensation
|
8,000
|
53,950
|
61,950
|
Preferred stock issued for services
|
-
|
28,000
|
|
Stock option and warrant expense
|
-
|
-
|
4,552,501
|
Permanent impairment of investment sale
|
-
|
-
|
225,000
|
Contingent liquidated damages expense
|
-
|
-
|
150,000
|
Change in operating assets and liabilities:
|
|||
Prepaid expenses
|
6,561
|
112,590
|
(17,343)
|
Accrued interest receivable
|
-
|
-
|
4,968
|
Deferred finance costs
|
-
|
(26,252)
|
|
Accounts payable
|
(3,784)
|
(51,495)
|
297,674
|
Accrued liabilities
|
503,922
|
222,702
|
2,146,851
|
Accrued interest
|
(776)
|
38,575
|
26,093
|
(345,975)
|
(181,731)
|
(5,438,949)
|
|
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
|
71,253
|
100,820
|
2,333,118
|
Proceeds from the sale of preferred stock
|
25,000
|
-
|
|
Shareholder loan
|
13,560
|
11,901
|
|
Proceeds from convertible debentures
|
274,000
|
-
|
1,139,000
|
Paydown on note receivable
|
19,000
|
575,000
|
|
Net borrowings/(pay downs) on line of credit
|
-
|
-
|
45,490
|
Settlement of derivative liabilities
|
(101,937)
|
||
Proceeds from the exercise of warrants
|
20,236
|
1,830,920
|
|
Net cash provided from financing activities
|
358,813
|
165,056
|
5,833,492
|
Net change in cash and cash equivalents
|
12,838
|
(16,675)
|
(65,790)
|
Cash and cash equivalents, beginning of period
|
12,399
|
25,121
|
91,033
|
25,237
|
$ 8,446
|
$ 25,243
|
|
Supplemental disclosure on non-cash financing activities:
|
|||
Stock issued for accrued expenses
|
$ 388,526
|
$ 161,450
|
$369,015
|
Stock issued for conversion of debt
|
$ 763,700
|
$ 755,685
|
|
Obligation to pay capital leases
|
$ -
|
$ -
|
800,000
|
Cash paid for interest and income taxes
|
$
|
$ 3,026
|
25,770
|
Cashless exercise of warrants
|
-
|
Outstanding Balance of Convertible Debenture
|
Unamortized Discount
|
||
December 13, 2007 Debenture
|
$284,300
|
$284,300
|
|
February 28, 2008 Debenture
|
173,591
|
38,274
|
|
Total Convertible Debentures at
September 30, 2009
|
$457,891
|
$322,574
|
$200,000 was disbursed on December 13, 2007, with aggregate additional funding of $575,000 during the year ended December 31, 2008.
|
|
$1,300,000 secured promissory note bearing interest at 7.75% per annum, due on demand at any time after February 1, 2011. The investor is obligated to make monthly periodic prepayments of $250,000 during each month that the promissory in outstanding. Interest is payable on a monthly basis, commencing January 15, 2008. The interest rate shall be increased by 0.25 percentage points per each Periodic Prepayment that is not paid by the investor, provided however that in no event shall the interest rate exceed an amount equal to 12.5%. During the year ended December 31, 2008, the Company received $575,000 under this promissory note.
|
Derivative Liability 9/30/10
|
Gain (Loss) on Derivative six months ended 9/30/10
|
||
December 2007
Debenture
|
$355,102
|
$46,907
|
|
February 2008 Debenture
|
215,385
|
349,986
|
|
Warrants Outstanding
|
4,708
|
(818)
|
|
Derivative Liability
|
$575,195
|
$396,075
|
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: November 15, 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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