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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2005
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|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File No.: 000-50944
GLOBAL RESOURCE CORPORATION
(f/k/a Advanced Healthcare Technologies, Inc.)
(Exact name of registrant as specified in its charter)
Nevada 84-1565820
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9444 Waples Street, Suite 290
San Diego, CA 92121
(Address of principal executive offices)
Issuer's telephone number: (858) 646-7410
(Former name, former address and former fiscal year,
if changed since last report)
-------------------
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes |X| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS
As of February 13, 2006, 7,215,000 shares of Global Resource's common stock
were outstanding.
Transitional Small Business Disclosure Format: Yes |_| No |X|
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PART 1: FINANCIAL INFORMATION
ITEM 1 - CONDENSED FINANCIAL STATEMENTS
F-1
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Balance Sheets
ASSETS
December 31, March 31,
2005 2005
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ 131 $ 175
----------- -----------
Total Current Assets 131 175
----------- -----------
OTHER ASSETS
Investments (Note 4) 0 57,073
----------- -----------
Total Other Assets 0 57,073
----------- -----------
TOTAL ASSETS $ 131 $ 57,248
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 46,763 $ 5,438
Accounts payable - related party 54,004 52,795
Accrued expenses - related party 1,000 --
Wages payable 190,000 150,000
Accrued interest 12,888 4,716
Convertible debentures 102,345 137,900
----------- -----------
Total Current Liabilities 407,000 350,849
----------- -----------
STOCKHOLDERS' DEFICIT
Preferred stock: 50,000,000 shares authorized
of $0.001 par value, no shares issued and
outstanding -- --
Common stock: 2,000,000,000 shares authorized,
of $0.001 par value, 7,215,000 shares
issued and outstanding 7,215 7,215
Additional paid-in capital 7,065,520 7,060,020
Accumulated deficit (7,479,604) (7,360,836)
----------- -----------
Total Stockholders' Deficit (406,869) (293,601)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 131 $ 57,248
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-2
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the three For the nine
months ended months ended
December 31, December 31,
-------------------------- --------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES $ -- $ -- $ -- $ --
COST OF GOODS SOLD -- -- -- --
----------- ----------- ----------- -----------
GROSS PROFIT -- -- -- --
OPERATING EXPENSES 31,833 153,376 89,078 204,520
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (31,833) (153,376) (89,078) (204,520)
OTHER EXPENSE
Interest Expense (2,656) (101,670) (8,172) (126,670)
Unrealized loss on Investment -- -- (21,518) --
----------- ----------- ----------- -----------
Total Other Expense (2,656) (101,670) (29,690) (126,670)
LOSS BEFORE
DISCONTINUED OPERATIONS (34,489) (255,046) (118,768) (331,190)
----------- ----------- ----------- -----------
LOSS FROM DISCONTINUED
OPERATIONS (NOTE 3) -- -- -- (116,946)
----------- ----------- ----------- -----------
NET LOSS $ (34,489) $ (255,046) $ (118,768) $ (448,136)
=========== =========== =========== ===========
BASIC LOSS PER SHARE
Continuing Operations $ (0.00) $ (0.05) $ (0.02) $ (0.10)
Discontinued Operations -- -- -- (0.04)
----------- ----------- ----------- -----------
Total Loss per Share $ (0.00) $ (0.05) $ (0.02) $ (0.14)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,215,000 5,013,043 7,215,000 3,274,182
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the nine months
ended December 31,
---------------------------
2005 2004
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITES
Net loss $ (118,768) $ (448,136)
Adjustments to reconcile net loss to
net cash used by operating activities:
Unrealized loss on investment 21,518 --
Depreciation and amortization -- 509
Debenture issued for services -- 25,000
Contributed services 5,500 --
Noncash interest expense related to
beneficial conversion feature of debt -- 125,000
Changes in assets and liabilities:
Increase in accounts payable and accounts
payable - related party 42,534 35,805
Increase in accrued expenses and accrued
expenses - related party 49,172 103,670
Changes in discontinued assets
and liabilities -- 106,679
----------- -----------
Net Cash Used by Operating Activities (44) (51,473)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES -- --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash used for partner draw -- (12,006)
Cash contributed by former officer -- 20,000
Common stock sold or subscribed for cash -- 12,200
Proceeds from issuance of note payable -- 15,500
Change from cash overdraft -- (13,736)
Proceeds from convertible debenture -- 125,000
----------- -----------
Net Cash Provided by Financing
Activities $ -- $ 146,958
----------- -----------
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
For the nine months
ended December 31,
----------------------------
2005 2004
----------- -----------
NET INCREASE IN CASH (44) 95,485
CASH AT BEGINNING OF PERIOD 175 --
----------- -----------
CASH AT END OF PERIOD $ 131 $ 95,485
=========== ===========
CASH PAID FOR
Interest $ -- $ --
Income taxes $ -- $ --
SCHEDULE OF NON CASH FINANCING ACTIVITIES
Contributed capital by shareholders $ 5,500 $ 247,546
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL RESOURCE CORPORATION
Notes to the Financial Statements
December 31, 2005
NOTE 1 - FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at December 31, 2005 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's March 31, 2005 audited
financial statements. The results of operations for the period ended December
31, 2005 are not necessarily indicative of the operating results for the full
year.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company has had a
change in control and has changed its business plan and it has not generated any
revenues. The future of the Company is dependent upon its ability to obtain
financing and upon future profitable operations from the development of its new
business opportunities. Management plans to research possible acquisitions of
various entities and an officer of the Company has agreed to loan the Company
funds as needed to sustain business for a period of twelve months. However, the
Company is dependent upon its ability to secure equity and/or debt financing and
there are no assurances that the Company will be successful, without sufficient
financing it would be unlikely for the Company to continue as a going concern.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
that might arise from this uncertainty.
NOTE 3 - DISCONTINUED OPERATIONS
On June 30, 2004, the Company's CEO entered into an agreement to sell 1,260,000
of the Company's common stock and his controlling interest to an unrelated
individual. This resulted in the Company's wholly owned subsidiary, NutraTek,
LLC, being spun off and left Advanced Healthcare Technologies Inc. as the
remaining shell company. All assets were associated with the discontinued
operations as well as all of the liabilities except for $247,546 which was
associated with Advanced.
F-6
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2005
NOTE 3 - DISCONTINUED OPERATIONS (Continued)
The net loss from discontinued operations for the three months ended June 30,
2004 are the operations of NutraTek for the three months ended March 31, 2004
because the spin off of NutraTek took place three months after Advanced
Healthcare Technologies, Inc. year end and NutraTek had a December 31 year end,
therefore three months after NutraTek's year end would be March 31, 2004.
For the three
months ended
March 31,2004
-----------
REVENUES $ 15,349
COST OF GOODS SOLD 4,108
-----------
GROSS PROFIT 11,241
-----------
OPERATING EXPENSES
Payroll 53,930
Rent 2,271
Professional fees 49,104
Depreciation 509
General and administrative 21,362
-----------
Total Operating Expenses 127,176
-----------
LOSS FROM OPERATIONS (115,935)
-----------
OTHER EXPENSE
Interest expense (1,011)
-----------
Total Other Expense (1,011)
-----------
NET LOSS $ (116,946)
===========
BASIC LOSS PER SHARE $ (0.04)
===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 3,274,182
===========
F-7
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2005
NOTE 4 - INVESTMENTS
During the year the Company held a 50% investment in Well Renewal, LLC (Well
Renewal). The Company paid $150,000 for a 50% controlling interest in Well
Renewal on January 11, 2005. The business plan of Well Renewal was to obtain
revenues via the management and operation of thirty oil wells located in
Oklahoma.
On December 15, 2005 Company entered into an agreement with Transnix Global
Corporation (Transnix) to exchange their 50% interest in Well Renewal in partial
satisfaction of certain debentures issued by Global Resource Corporation. Prior
to the execution of the agreement the Company's outstanding debentures totaled
$137,900 plus accrued interest and the investment in Well Renewal was on the
Company's books, valued at $35,555. The agreement stated that the payment amount
would be equal to the value of the investment on the Company's books at the date
of the agreement, therefore the Company gave Transnix their ownership rights in
Well Renewal and credited their investment account for $35,555, resulting in a
December 31, 2005 investment balance of $0, and debited their convertible
debentures liability for $35,555, resulting in a December 31, 2005 Debenture
balance of $102,345.
NOTE 5 - MATERIAL EVENTS
On June 17, 2005 Jimmy Villalobos resigned as president of the Company.
On December 15, 2005, after a thorough review of the costs and potential
regulatory requirements of complying with the Investment Company Act of 1940,
the Board of Directors of the Company approved the Companies election to
withdraw its election to be subject to sections 55 through 65 of the Investment
Company Act of 1940, pursuant to the provisions of section 54(c) of the Act. As
such, and with the transfer of the Well Renewal, LLC interest, the Company has
become a Development Stage Company. Although the company became a Development
Stage Company on December 15, 2005, the Company will disclose the from inception
columns on the Statement of Operations and on the Cash Flow Statement as though
it took place on December 31, 2005.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
From September 27, 2004 through December 6, 2004, the Company issued
approximately 4,815,000 shares of common stock (the "Shares") upon conversion of
certain outstanding convertible debentures. The Company did not register the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), in
reliance on various exemptions from registration, including, but not limited to,
Section 3(b) of the Securities Act and Regulation E promulgated thereunder.
On June 17, 2005, the Division of Investment Management (the "Division") at the
Securities & Exchange Commission (the "SEC") has advised Global Resource that it
is the view of the Division that the Company cannot rely on the exemption
afforded by Regulation E and that it is unaware of any other exemptions from
registration for the issuance of the Shares. The Division also advised the
Company that, in the view of the Division, it appears that the issuance of the
Shares violated Section 5 of the Securities Act. The Company has advised the
Division that it is the Company's view that the issuance of the Shares was
exempt from registration under the Securities Act under various available
exemptions, including, but not limited to, Regulation E, and that the issuance
of the Shares did not violate Section 5 of the Act.
NOTE 7 - RELATED PARTY TRANSACTIONS
During the quarter ended June 30, 2005, a shareholder of the Company maintained
office space and provided services that resulted in rent expense of $500 and
payroll expense of $5,000. Both of these amounts were contributed to capital.
F-8
GLOBAL RESOURCE CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2005
NOTE 7 - RELATED PARTY TRANSACTIONS (Continued)
During the quarters ended September 30, 2005 and December 31, 2005, shareholders
of the company maintained office space and provided services that resulted in
rent expense of $1,000 and payroll expense of $40,000. Both of these amounts
were recorded as accrued liabilities in the Accrued Liabilities - Related Party
balance in the Wages Payable balance, respectively.
F-9
ITEM 2 - PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with
our unaudited consolidated condensed financial statements and related notes
included in this report. This report contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. The
statements contained in this report that are not historic in nature,
particularly those that utilize terminology such as "may," "will," "should,"
"expects," "anticipates," "estimates," "believes," or "plans" or comparable
terminology are forward-looking statements based on current expectations and
assumptions.
Various risks and uncertainties could cause actual results to differ
materially from those expressed in forward-looking statements. All
forward-looking statements in this document are based on information currently
available to us as of the date of this report, and we assume no obligation to
update any forward-looking statements. Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Change of Control
On June 30, 2004, Richard Mangiarelli purchased 126,000,000 shares of
Global Resource common stock from its former President, Chief Executive Officer,
Director, and majority stockholder, Johnny Sanchez. As a result, Mr. Mangiarelli
then held approximately 52.5% of the issued and outstanding common stock of
Global Resource.
In connection with this change in control, Mr. Sanchez resigned as our
President and Chief Executive Officer, Joel Rockwood resigned as our Vice
President and Chief Scientific Officer, and Michael MacArthur resigned as our
Secretary. The board of directors appointed Mr. Mangiarelli as the new
President, Chief Financial Officer, and Secretary. In addition, Mr. Sanchez, Mr.
Rockwood, Virginia Sanchez, Carmen Sanchez, and Joe V. Overcash resigned as
directors of Global Resource. The outgoing directors appointed Richard
Mangiarelli to fill the vacancies on the board.
On June 30, 2004, we entered into a Release and Indemnity Agreement with
Johnny Sanchez, our former President, Chief Executive Officer, Director, and
majority stockholder, pursuant to which we sold the all of our membership
interest in NutraTek to Mr. Sanchez in exchange for Mr. Sanchez's agreement to
do the following: (a) release us from any and all claims that Mr. Sanchez may
have had against us; (b) indemnify us for any and all claims against or
liabilities of Global Resource that existed before June 30, 2004, and (c) to
cooperate with and assist Global Resource in connection with its reporting
obligations or filing requirements under the Securities Act of 1933, as amended,
and Securities Exchange Act of 1934, as amended, and to deliver such other
instruments and take such other actions as may be reasonably requested by us in
order to carry out the intent of the agreement.
Immediately after the spin-off of Nutratak, Global Resource had no
operations. Before the change of control described above, Global Resource's
principal business and operations were those of NutraTek. NutraTek researched,
developed, and thereafter contracted with third parties to manufacture its own
line of nutritional dietary supplements, functional food products and natural
sweeteners.
Global Resource's new management decided to terminate the nutritional
products business and elected to become a business development company. As a
business development company, Global Resource focused on making investments in
securities, and making available significant managerial assistance with respect
to the issuers of such securities. Since becoming a business development
company, we made one investment in Well Renewal LLC. Well Renewal manages and
operates oil wells in Oklahoma by utilizing a nitrogen and carbon dioxide gas
injection unit to "pump up" and re-pressure the wells to increase oil output. At
September 30, 2005, our investment in Well Renewal, valued at approximately
$35,555, with a cost of $150,000, consisted of the purchase of a 50% interest in
Well Renewal LLC.
On November 18, 2005 we entered into a pledge agreement (the "Pledge
Agreement") with Transix Global Corporation ("Transnix") pursuant to which we
pledged our 50% membership interest in Well Renewal, LLC (the "Membership
Interest") in order to prevent Transnix from commencing legal action against us
for repayment of those certain 8% convertible debentures issued by us to
Transnix (the "Debentures") and to provide Transnix with additional security for
repayment of the Debentures. We subsequently defaulted on payment of the
Debentures.
2
On December 15, 2005, we entered into an agreement with Transnix (the
"Collateral Foreclosure Agreement") pursuant to which (i) Transnix, pursuant to
the terms of the Pledge Agreement, accepted the Membership Interests (the
collateral under the Pledge Agreement) in satisfaction of $35,555.00 of
principal and interest obligations secured under the Debentures and (ii) we
raised no objection to Transnix accepting the Membership Interest in
satisfaction of $35,555.00 of principal and interest obligations under the
Debentures and waived any and all notice periods under the Uniform Commercial
Code.
On December 15, 2005, after a thorough review of the costs and potential
regulatory requirements of complying with the Investment Company Act of 1940,
the Board of Directors of the Company approved "Notification of Withdrawal" on
Form n-54C with the Securities and Exchange Commission to withdraw our election
to be subject to sections 55 through 65 of the Investment Company Act of 1940.
On December 19, 2005, our "Notification of Withdrawal" on Form n-54C was filed
with the Securities and Exchange Commission. As such, and with the transfer of
the Well Renewal, LLC interest described above, we became a Development Stage
Company.
Although we became a Development Stage Company on December 15, 2005, we
will disclose the from inception columns on the Statement of Operations and the
Statement of Cash Flows as though it took place on December 31, 2005. We were
unable to attract sufficient investment capital as a Business Development
Company (BDC) to execute our strategy of acquiring and developing companies. We
believe we are now better able to address its capital structure since we are no
longer subject to the BDC Provisions.
The election to withdraw the Company as a BDC under the Investment Company
Act has resulted in a significant change in our required method of accounting.
BDC financial statement presentation and accounting utilizes the value method of
accounting used by investment companies, which allows BDC's to recognize income
and value their investments at market value as opposed to historical cost. As a
development stage company, the required financial statement presentation and
accounting for securities held will be either fair value or historical cost
methods of accounting, depending on the classification of the investment and our
intent with respect to the period of time we intend to hold the investment.
As an operating company, we must consolidate our financial statements with
subsidiaries, thus eliminating the portfolio company reporting benefits
available to BDC's.
Liquidity and Capital Resources
We currently have limited working capital with which to satisfy our cash
requirements, and we will require additional capital in order to conduct
operations. We anticipate that we will require at least $250,000 in additional
working capital in order to sustain operations for the next 12 months. This
requirement may increase substantially, depending on the nature and capital
requirements of the business opportunities it elects to pursue.
In order to obtain working capital, from October, 2004 to January, 2005,
we issued convertible debentures in the aggregate principal amount of $155,000
in a private placement. The notes are due approximately five (5) months after
issuance and bear interest at a rate of eight percent (8%). The notes are
convertible into shares of our common stock, at the option of either us or the
holder of the note, at a floating conversion price of fifty percent (50%) of the
closing bid price per share on the day of conversion, or at the lowest price
allowable as set by us in an effective registration statement or exemption
notification as filed with the Securities and Exchange Commission. We are
obligated to register the resale of the shares of common stock issuable upon
conversion of the debenture under the Securities Act of 1933, as amended, or to
otherwise provide an acceptable exemption to registration under Regulation E of
the Securities Act of 1933, as amended.
In addition, in September 2004, we commenced an offering of our common
stock pursuant to Regulation E of the Securities Act of 1933, as amended.
Pursuant to this offering, we have sold 1,220,000 shares of common stock for
$12,200, and holders of the debentures referenced above have converted, in the
aggregate, approximately $19,800 of principal and interest due thereunder into
3,595,000 shares of our common stock. Since that time, the issuance of a
convertible debenture in the principal amount of $25,000 to Javelin Holdings for
services rendered has been rescinded by mutual agreement between us and Javelin
Holdings. Before this rescission, Javelin had converted $875 of principal on the
convertible debenture into 175,000 shares of common stock. In connection with
the rescission of the convertible debenture, Javelin returned 175,000 shares of
common stock to us for cancellations. These shares have not yet been cancelled.
3
In January 2005, we amended this offering to reduce the range of the price
per share of the offering. The Division of Investment Management of the
Securities and Exchange Commission ("SEC") has delivered comments to Global
Resource regarding this amended offering, and Global Resource is currently
working with the Division of Investment Management to address these comments. We
will not issue any shares in reliance on Regulation E until all comments from
the SEC are resolved. This offering may not provide Global Resources with the
capital necessary to fund its operations. In the interim, we will continue to
seek additional forms of capital and our management may provide additional
financing as required.
On December 15, 2005, pursuant to the terms of the Collateral Foreclosure
Agreement, we exchanged our Membership Interests in Well Renewal LLC in partial
satisfaction of the Debentures issued by us. Our debentures totaled $137,900
plus accrued interest. The transfer of the investment in Well Renewal, LLC was
made at its book value of $35,555. The remaining balance of the convertible
debenture is $102,345 plus accrued interest. As of December 31, 2005, we no
longer hold any interst in Well Renewal LLC.
Off Balance Sheet Arrangements
We do not have any off-balance sheet financing arrangements.
ITEM 3 - CONTROLS AND PROCEDURES
Our disclosure controls and procedures are designed to ensure that
information required to be disclosed in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission. Our Chief Executive Officer and Chief Financial Officer has
reviewed the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c))
within the last ninety days and has concluded that the disclosure controls and
procedures are effective to ensure that material information relating to Global
Resource Corporation is recorded, processed, summarized, and reported in a
timely manner. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
last day they were evaluated by our Chief Executive Officer and Chief Financial
Officer.
It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. As a small organization, the effectiveness of
our controls heavily depends on the direct involvement of our Chief Executive
Officer and Chief Financial Officer.
PART II: OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
From September 27, 2004 through December 6, 2004, we issued approximately
4,815,000 shares of common stock, of which 1,220,000 were issued for cash and
3,595,000 were issued upon conversion of certain outstanding convertible
debentures. We did not register these shares under the Securities Act of 1933,
as amended, in reliance on various exemptions from registration, including, but
not limited to, Section 3(b) of the Securities Act and Regulation E promulgated
thereunder.
Since that time, the issuance of a convertible debenture in the principal
amount of $25,000 to Javelin Holdings for services rendered has been rescinded
by mutual agreement between us and Javelin Holdings. Before this rescission,
Javelin had converted $875 of principal on the convertible debenture into
175,000 shares of common stock. In connection with the rescission of the
convertible debenture, Javelin returned 175,000 shares of common stock to us for
cancellations. These shares have not yet been cancelled.
4
On June 17, 2005, the Division of Investment Management at the Securities
& Exchange Commission advised us that it is the view of the Division that we
cannot rely on the exemption afforded by Regulation E and that it is unaware of
any other exemptions from registration for the issuance of the Shares. The
Division also advised us that, in the view of the Division, it appears that the
issuance of the Shares violated Section 5 of the Securities Act. We advised the
Division that it is our view that the issuance of the Shares was exempt from
registration under the Securities Act under various available exemptions,
including, but not limited to, Regulation E, and that the issuance of the Shares
did not violate Section 5 of the Act.
At this time, neither the SEC nor any private party has commenced any
action against us alleging that we issued the shares in violation of Section 5
of the Securities Act. Further, the SEC has not, to our knowledge, commenced any
formal or informal inquiry with respect to its contention that the shares were
issued in violation of Section 5 of the Securities Act. In the event that any
such action or inquiry is commenced, we intend to defend against such
allegations vigorously.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULT UPON SENIOR SECURITIES
(a) On November 18, 2005 we entered into a pledge agreement (the "Pledge
Agreement") with Transix Global Corporation ("Transnix") pursuant to which we
pledged our 50% membership interest in Well Renewal, LLC (the "Membership
Interest") in order to prevent Transnix from commencing legal action against us
for repayment of those certain 8% convertible debentures issued by us to
Transnix (the "Debentures") and to provide Transnix with additional security for
repayment of the Debentures. We subsequently defaulted on payment of the
Debentures.
On December 15, 2005, we entered into an agreement with Transnix (the
"Collateral Foreclosure Agreement") pursuant to which (i) Transnix, pursuant to
the terms of the Pledge Agreement, accepted the Membership Interests (the
collateral under the Pledge Agreement) in satisfaction of $35,555.00 of
principal and interest obligations secured under the Debentures and (ii) we
raised no objection to Transnix accepting the Membership Interest in
satisfaction of $35,555.00 of principal and interest obligations under the
Debentures and waived any and all notice periods under the Uniform Commercial
Code.
Prior to our exchange of our Membersship Intersest, the Debentures totaled
$137,900 plus accrued interest. The remaining balance of the Debentures held by
Transnix is $102,345 plus accrued interest.
(b) None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
(a)
1. On June 30, 2005, Richard F. Schmidt resigned as a director. Mr.
Schmidt's resignation as a director was not because of any disagreements with us
on matters relating to our operations, policies or practices.
2. Pledge Agreement. On November 18, 2005 we entered into a pledge
agreement (the "Pledge Agreement") with Transix Global Corporation ("Transnix")
pursuant to which we pledged our 50% membership interest in Well Renewal, LLC
(the "Membership Interest") in order to prevent Transnix from commencing legal
action against us for repayment of those certain 8% convertible debentures
issued by us to Transnix (the "Debentures") and to provide Transnix with
additional security for repayment of the Debentures.
5
3. Collateral Foreclosure Agreement. On December 15, 2005, we entered into
an agreement with Transnix (the "Collateral Foreclosure Agreement") pursuant to
which (i) Transnix, pursuant to the terms of the Pledge Agreement, accepted the
Membership Interests (the collateral under the Pledge Agreement) in satisfaction
of $35,555.00 of principal and interest obligations secured under the Debentures
and (ii) we raised no objection to Transnix accepting the Membership Interest in
satisfaction of $35,555.00 of principal and interest obligations under the
Debentures and waived any and all notice periods under the Uniform Commercial
Code.
4. On December 19, 2005, we filed a "Notification of Withdrawal" on Form
n-54C with the Securities and Exchange Commission to withdraw our election to be
subject to sections 55 through 65 of the Investment Company Act of 1940. This
withdrawal of election was approved by our Board of Directors.
(b) None.
ITEM 6 - EXHIBITS
Item No. Description Method of Filing
-------- ----------- ----------------
10.1 Pledge Agreement, dated November 18, 2005 between Filed electronically herewith.
Global Resource Corporation and Transnix Global
Corporation.
10.2 Agreement, dated December 15, 2005 bewteen Global Filed electronically herewith.
Resource Corporation and Transnix Global Corporation.
31.1 Certification of Richard Mangiarelli pursuant to Filed electronically herewith.
Rule 13a-14(a)
32.1 Chief Executive Officer and Chief Financial Officer Filed electronically herewith.
Certification pursuant to 18 U.S.C. ss. 1350 adopted
pursuant to Section 906 of the Sarbanes Oxley Act of
2002
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLOBAL RESOURCE CORPORATION
February 13, 2006 /s/ Richard Mangiarelli
-------------------------------------------------
Richard Mangiarelli
Chief Executive Officer
(Principal Executive Officer, Principal Financial
Officer, and Principal Accounting Officer)
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