veracity10q93010_111210.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-Q
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ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2010
or
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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____
Commission file number 0-52493
VERACITY MANAGEMENT GLOBAL, INC.
(Exact Name Of Registrant As Specified In Its Charter)
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Delaware
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43-1889792
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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21819 Town Place Drive, Boca Raton, FL
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33433
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(Address of Principal Executive Offices)
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(ZIP Code)
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Registrant's Telephone Number, Including Area Code: : (561) 998-8425
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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 ¨
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Large Accelerated Filer o
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Accelerated Filer o
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Non-Accelerated Filer o (Do not check if a smaller reporting company)
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Smaller Reporting Company þ
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On November 12 , 2009, the Registrant had 16,643,057 shares of common stock issued and outstanding.
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PART I FINANCIAL INFORMATION
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Item 1. Financial Statements
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3
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Item 2. Management’s Discussion and Analysis and Plan of Operation
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10
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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11
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Item 4. Controls and Procedures
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11
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PART II OTHER INFORMATION
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Item 1. Legal Proceedings
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12
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Item 1A. Risk Factors
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12
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Item 2. Recent Sales of Unregistered Equity Securities and Use of Proceeds
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12
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Item 3. Defaults Upon Senior Securities
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12
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Item 4. Submission of Matters to a Vote of Security Holders
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12
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Item 5. Other Information
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12
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Item 6. Exhibits
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12
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Signatures
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13
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PART I - FINANCIAL INFORMATION
ITEM 1. (Unaudited) FINANCIAL STATEMENTS
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VERACITY MANAGEMENT GLOBAL, INC.
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BALANCE SHEETS
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(UNAUDITED)
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(A Development Stage Company)
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September 30,
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June 30,
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ASSETS
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2010
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2010
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Current Assets
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$ |
- |
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$ |
- |
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Total Current Assets
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- |
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- |
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Total Assets
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$ |
- |
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$ |
- |
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts Payable - Related party
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$ |
73,102 |
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$ |
69,959 |
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Total Current Liabilities
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73,102 |
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69,959 |
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Total Non - Current Liabilities
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- |
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- |
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Total Liabilities
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73,102 |
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69,959 |
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Stockholders' Deficit
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Preferred Stock, $.001 par value, 5,000,000 shares
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authrized, 0 shares issued and outstanding
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- |
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- |
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Common Stock, $.001 par value, 3,500,000,000 shares
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authorized, 16,643,057 and 16,643,057 shares issued and
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outstanding at September 30, 2010 and June 30, 2010 respectively
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16,635 |
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16,635 |
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Additional paid-in capital
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4,052,836 |
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4,052,836 |
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Accumulated deficit prior to development stage
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(4,040,470 |
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(4,040,470 |
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Accumulated deficit during the development stage
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(102,103 |
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(98,960 |
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Total Stockholders' Deficit
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(73,102 |
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(69,959 |
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Total Liabilities and Stockholders' Defecit
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$ |
- |
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$ |
- |
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The accompanying notes to financial statements are integral part of these financial statements.
VERACITY MANAGEMENT GLOBAL, INC.
Statements of Operations
For the Three Months Ended September 30, 2010 and 2009 and the period from July 1, 2008 to September 30, 2010
(Unaudited)
(A Development Stage Company)
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2010 |
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2009 |
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Period re-entered development stage (July 1, 2008) to September 30, 2010
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Revenues
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$ |
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$ |
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$ |
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Cost of Sales
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- |
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- |
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- |
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Gross Profit
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- |
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- |
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- |
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Expenses
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Administrative Expenses
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2,523 |
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3,400 |
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48,503 |
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General Expenses
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620 |
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- |
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53,600 |
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Total Expenses
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3,143 |
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3,400 |
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102,103 |
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Net Income (Loss)
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$ |
(3,143 |
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$ |
(3,400 |
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$ |
(102,103 |
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Basic and Diluted Net Loss per Share
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* |
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* |
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Weighted Average Shares
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16,643,057 |
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16,643,057 |
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The accompanying notes to financial statements are integral part of these financial statements..
VERACITY MANAGEMENT GLOBAL, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
(Unaudited)
(A Development Stage Company)
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Common Stock
Shares
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Amount
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Additional
Paid-in Capital
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Accumulated
Deficit during
Developmnet Stage
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Accumulated
Deficit
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Total
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Balance at June 30, 2010
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16,643,057 |
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$ |
16,635 |
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$ |
4,052,836 |
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$ |
(98,960 |
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$ |
(4,040,470 |
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$ |
(69,959 |
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Net loss
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(3,143 |
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(3,143 |
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Balance at September 30, 2010
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16,643,057 |
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$ |
16,635 |
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$ |
4,052,836 |
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$ |
(102,103 |
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$ |
(4,040,470 |
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$ |
(73,102 |
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The accompanying notes to financial statements are integral part of these financial statements
VERACITY MANAGEMENT GLOBAL, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
(A Development Stage Company)
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Three Months Ended, September 30,
2010
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Three Months Ended, September 30,
2009
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Period re-entered development stage (July 1, 2008) to September 30, 2010
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss from continuing operations
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$ |
(3,143 |
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$ |
(3,400 |
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$ |
(102,103 |
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Adjustments to reconcile net loss to net cash
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used in operating activities:
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Shares issued for services:
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- |
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- |
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50,000 |
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Increase (decrease) in:
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Accounts Payable relayed parties
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3,143 |
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- |
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48,579 |
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Accounts Payable
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- |
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3,400 |
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3,524 |
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Net cash used in operating activities
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- |
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- |
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- |
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from sale of common stock
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- |
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- |
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- |
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Net cash provided by financing activities
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- |
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- |
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- |
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NET INCREASE (DECREASE) IN CASH
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- |
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- |
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- |
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CASH - BEGINNING OF PERIOD
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- |
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- |
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- |
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CASH - END OF PERIOD
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$ |
- |
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$ |
- |
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$ |
- |
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The accompanying notes to financial statements are integral part of these financial statements.
VERACITY MANAGEMENT GLOBAL, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 2010
(A Development Stage Company)
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying financial statements of Veracity Management Global, Inc (the "Company", "VCMG") at September 30, 2010 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been omitted or condensed pursuant to such rules and regulations. These statements should be read in conjunction with VCMG’s audited financial statements and notes thereto included in VCMG’s Form 10-K. In management’s opinion, these unaudited interim financial statements reflect all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of the financial position and results of operations for each of the periods presented. The accompanying unaudited interim financial statements for the three months ended September 30, 2010 are not necessarily indicative of the results which can be expected for the entire year.
Basis of Presentation
The Company follows accounting principles generally accepted in the United States of America. Certain prior period amounts have been reclassified to conform to the September 30, 2008 presentation. On August 2, 2007, the Company’s Board of Directors approved a 1 for 73 reverse split of the Company’s common stock by Action of the Board and a majority of shareholders. All information related to common stock, warrants to purchase common stock and earnings per share have been retroactively adjusted to give effect to the stock split.
The statements of operations show the effect of a reclassification of the distribution of the subsidiary companies until July 1, 2008. The reclassification included all parts of the prior operations for both subsidiary companies as loss from discontinued operations for the prior reported period.
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The financial statements include the accounts of Veracity Management Global, Inc and the operations of Secured Financial Data, Inc and Veracity Management Group, Inc. are being reported as loss from discontinued operations. Any inter-company transactions have been eliminated as part of the transaction.
As a development stage company, the Company continues to rely on infusions of debt and equity capital to fund operations. The Company relies principally on cash infusions from its directors and affiliates, and paid a significant amount of personal services and salaries in the form of common stock.
Recently Issued Accounting Standards
In April 2008, the FASB issued ASC 350-10, "Determination of the Useful Life of Intangible Assets." ASC 350-10 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350-10, "Goodwill and Other Intangible Assets." ASC No. 350-10 is effective for fiscal years beginning after December 15, 2008. The adoption of this ASC did not have a material impact on our financial statements.
VERACITY MANAGEMENT GLOBAL, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 2010
(A Development Stage Company)
(Unaudited)
In April 2009, the FASB issued ASC 805-10, "Accounting for Assets Acquired and Liabilities assumed in a Business Combination That Arise from Contingencies—an amendment of FASB Statement No. 141 (Revised December 2007), Business Combinations". ASC 805-10 addresses application issues raised by preparers, auditors and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination. ASC 805-10 is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. ASC 805-10 will have an impact on our accounting for any future acquisitions and its financial statements.
In May 2009, the FASB issued ASC Topic 855, “Subsequent Events”. ASC Topic 855 established principles and requirements for evaluating and reporting subsequent events and distinguishes which subsequent events should be recognized in the financial statements versus which subsequent events should be disclosed in the financial statements. ASC Topic 855 also requires disclosure of the date through which subsequent events are evaluated by management. ASC Topic 855 was effective for interim periods ending after June 15, 2009 and applies prospectively. Because ASC Topic 855 impacts the disclosure requirements, and not the accounting treatment for subsequent events, the adoption of ASC Topic 855 did not impact our consolidated results of operations or financial condition. See Note 10 for disclosures regarding our subsequent events.
On July 1, 2009, the Company adopted ASU No. 2009-05, Fair Value Measurements and Disclosures (Topic 820) (ASU 2009-05). ASU 2009-05 provided amendments to ASC 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using certain techniques. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The adoption of ASU 2009-05 did not have a material impact on the Company’s results of operations or financial condition.
Effective July 1, 2009, we adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 105-10, Generally Accepted Accounting Principles—Overall ("ASC 105-10"). ASC 105-10 establishes the FASB Accounting Standards Codification (the "Codification") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates ("ASUs"). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout the financials have been updated for the Codification.
VERACITY MANAGEMENT GLOBAL, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 2010
(A Development Stage Company)
(Unaudited)
In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value, which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, an entity may use the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value measurements. This ASU is effective October 1, 2009. We are currently evaluating the impact of this standard, but would not expect it to have a material impact on our results of operations or financial condition.
Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.
NOTE 2- GOING CONCERN
Veracity Management Global, Inc.’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has accumulated losses aggregating to $4,142,573 and has insufficient working capital to meet operating needs for the next twelve months as of September 30, 2010, all of which raise substantial doubt about VCMG’s ability to continue as a going concern.
NOTE 3 – ACCOUNTS PAYABLE – RELATED PARTY
The officers and directors of the Company have advanced funds to pay for the filing and other necessary costs of the Company. The following are the advances from the officers and directors:
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September 30, 2010
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June 30, 2010
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Donald W Prosser (Director)
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$ |
67,102 |
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$ |
63,959 |
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Gregory Paige (CEO & Director)
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6,000 |
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6,000 |
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Total
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$ |
73,102 |
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$ |
69,959 |
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NOTE 4 – SUBSEQUENT EVENTS
There were not any subsequent events through the date November 12, 2010.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION
Forward-Looking Statement
Some of the statements contained in this quarterly report of Veracity Management Global, Inc., a Delaware corporation (hereinafter referred to as "we", "us", "our", "Company" and the "Registrant") discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.
General
The Registrant acquired its operating subsidiaries Veracity Management Group, a Florida corporation ("VMG") and Secured Financial Data Inc., a Florida corporation ("SFD") effective on July 1, 2006. Prior to the acquisition of its operating subsidiaries, during the period from May 2002 until the acquisition of its operating subsidiaries on July 1, 2006, the Registrant had only limited business operations. The Registrant operated the above named subsidiaries until July 1, 2008 until the when the Registrant rescinded the merger and the Registrant has no business operations and is in the business of acquiring a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Registrant will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The results of operations comparative information has no meaning as the operations were removed as part of the rescinding of the mergers of the operating businesses.
Results of Operations for the Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009
The results of the recession agreement made the Company a shell company as defined in Rule 12b-2 of the Exchange Act.
Revenues. The Company recorded revenue of $0 and $0 for the three months ended September 30, 2010 and 2009, respectively.
Cost of Services. The Company recorded cost of services of $0 and $0 for the three months ended September 30, 2010 and 2009, respectively.
Administrative Expenses: Our administrative expenses totaled $2,523 for the three-months ended September 30, 2010 as compared to $3,400 administrative expenses for the same period ended September 30, 2009.
General Expenses There was $620 general expenses were during the three-months ended September 30, 2010. There were no general expenses for the three months period ended September 30, 2009.
Net Loss. We incurred a net loss of $3,143 during the three-month period ended September 30, 2010, compared to a net loss of $3,400 during the three-month period ended September 30, 2009.
Liquidity and Capital Resources
At September 30, 2010 and June 30, 2010, we had total assets of $0 and $0, respectively. We had total current liabilities of $73,102 at September 30, 2010 compared to $69,959 at June 30, 2010. We had long-term liabilities of $0 as of September 30, 2010 compared to $0 at June 30, 2010.
We had no working capital at September 30, 2010. Net cash used in operations during the three-month period ended September 30, 2010 was $0. For the three-month period ended September 30, 2009 the net cash provided from operations was $0.
During the three-month period ended September 30, 2010, financing activities provided $0 compared to $0 during the same three-month period in the prior year.
There are no limitations in the Company's articles of incorporation on the Company's ability to borrow funds or raise funds through the issuance of restricted common stock.
Plan of Current and Future for the year 2011
The Company has no business operations and is in the business of acquiring a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
ITEM 3. QUANTITATIVE and QAULITATIVE DISCUSSION ABOUT MARKET RISK
The Company is defined by Rule 229.10 (f)(1) as a “Smaller Reporting Company” and is not required to provide or disclose the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
As of September 30, 2010, our Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”) conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 Act, as amended (the “Exchange Act”) the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosure. Based on this evaluation, the Certifying Officers have concluded that our disclosure controls and procedures were not effective to ensure that material information is recorded, processed, summarized and reported by our management on a timely basis in order to comply with our disclosure obligations under the Exchange Act, and the rules and regulations promulgated there under.
The Certifying Officers’ conclusion that the Company’s disclosure controls and procedures were not effective was based upon a determination that a deficiency relating to measuring and recording the elements of a merger relating to the Company’s accounting for the non-cash compensation in the transaction, as discussed below.
As of September 30, 2010, there were no other changes in our internal control over financial reporting during the subject fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. RECENT SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein.
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Exhibit No.
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Description
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31.1
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Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Veracity Management Global, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
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/s/Gregory L. Paige
Gregory L. Paige
CEO
Dated: November 12, 2010
/s/ Mark L. Baker
Mark L. Baker
CFO
Dated: November 12, 2010
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