UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2012
[ ] 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. 333-170091
GLOBAL LINES INC.
(Exact name of registrant as specified in its charter)
16400 Collins Avenue unit 2142
Sunny Isles Beach FL 33160
954-889-7573
(Address and telephone number of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
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 shorter period that the registrant as 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes [X] No [ ]
As of August 31, 2012, the registrant had 7,300,000 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market has been established as of August 31, 2012.
TABLE OF CONTENTS
Item 1. Description of Business
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
GENERAL
We were incorporated in the State of Nevada on June 6, 2011. We are involved the chauffeured transportation business. Global lines Inc. will be providing chauffeuring and transportation services to residents within its local market. We will primarily provide transportation services such as private school student transport, sightseeing trips, and elderly transportation. We will also offer transportation to the airport and special event such as proms and weddings. We plan to serve a repeat clientele who demand--and can afford--reliable, secure service from drivers with detailed knowledge of the area. We have not generated
any revenues to date. We have executed an agreement with "Super Limousines", developed our business plan and paid deposit of $4,000 on one car to be used for Limosine Service. Since inception through August 31, 2012, the Company has not generated any revenue and has accumulated losses of $43,142.
LIMOUSINE SERVICE
The customer needs in the limousine transportation market are quite diverse. Corporate and airport transfer clients are mostly interested in reliable and fast service. For these clients, limousine services save time and add convenience compared to using public transportation or personal vehicles. Prom and bachelor party clients are more interested in the social status associated with the limousine service; however, this segment is less loyal and shops around for the best value. At the same time, wedding and funeral transportation clients, who also seek the emotional benefits of using a limousine service, may be less price sensitive than other segments. Further, the sightseeing segment, which is currently underserved, does not only need spacious and comfortable accommodation during the trip, but also benefits from a driver who is very familiar with the area and who can serve as a guide as well. Global Lines Inc. will concentrate in the areas of private school student
transport, sightseeing trips, and elderly transportation. We believe that these markets have higher margins and are less price sensitive. According to www.localschooldirectory.com, Ft Lauderdale has 33 private schools with 32000 students. According to www.broward.org, Ft Lauderdale airport traffic (December-June 2010) is 10,367,009 passengers--potential clients for the sightseeing service. There are 150 assisted living facilities in the area--potential clients for elderly transportation service.
INDUSTRY STATISTICS:
The latest LCT (limousine, charter and tours) Fact Book (http://www.lctmag.com) statistics:
PROFITS: The average overall percentage profit margin for chauffeured transportation companies in 2010: 17%, up from 15% in 2009. Small chauffeured transportation companies recorded an average profit margin of: 21% in 2010, compared to 18% for 2009.
FLEET VEHICLES: Median number of vehicles in fleet as of 1Q 2011: 8
WAGES: Average hourly wages for Chauffeurs: $13.92
TOP 5 BEST BUSINESS CLIMATES:
1. South Dakota
2. Alaska
3. Wyoming
4. Nevada
5. Florida
AGREEMENT
We have executed an agreement with "Super Limousines" under which, Super Limousines agrees to provide work to Global Lines Inc., collect payment from customers and provide payment to Global Lines Inc. for performed services The consideration fee shall be calculated as ten per cent (10%) of the net value of transportation services sold by the "Super limousines" to customer and performed by Global Lines Inc. Either party may terminate this agreement at any time by giving the other party ten (10) days prior written notice.
PRICING
Average hourly cost to hire Limousine in South Florida is $60 (July 2011). We plan to price our service approximately at the same rate.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3. Legal Proceedings
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
There is a limited public market for our common shares. Our common shares are not quoted on the OTC Bulletin Board at this time. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
As of August 31, 2012, no shares of our common stock have traded.
Number of Holders
As of August 31, 2012, the 7,300,000 issued and outstanding shares of common stock were held by a total of 25 shareholders of record.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal years ended August 31, 2011 and 2012. We have not paid any cash dividends since our inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future.
Recent Sales of Unregistered Securities
Purchase of our Equity Securities by Officers and Directors
Other Stockholder Matters
Item 6. Selected Financial Data
Not applicable.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
FISCAL YEAR ENDED AUGUST 31, 2011 COMPARED TO FISCAL YEAR ENDED AUGUST 31, 2012.
Our net loss for the fiscal year ended August 31 2012 was $42,626 compared to a net loss of $516 during the fiscal year ended August 31, 2011. During fiscal year ended August 31, 2012, the Company has not generated any revenue.
During the fiscal year ended August 31, 2012, we incurred general and administrative expenses of $698 and professional fees expense of $41,928 compared to general and administrative expenses of $516 incurred during fiscal year ended August 31, 2011.
Expenses incurred during the fiscal year ended August 31, 2012 compared to fiscal year ended August 31, 2011 increased primarily due to the increased scale and scope of business operations. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.
The weighted average number of shares outstanding was 5,879,891 for the fiscal year ended August 31, 2012 compared to 4,500,000 for the period from June 6, 2011 to August 31, 2011.
Expenses incurred during fiscal year ended August 31, 2012 compared to fiscal year ended August 31, 2011 increased primarily due to the increased scale and scope of business operations. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2012, our total assets were $5,462 comprised of cash of $1,462 and deposits of $4,000 and our total liabilities were $20,604 comprised of notes payable to related parties.
As of August 31, 2011, our total assets were $4,588 comprised of cash and cash equivalents. Stockholders’ equity decreased from $3,984 as of August 31, 2011 to ($15,142) as of August 31, 2012.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the fiscal year ended August 31, 2012, net cash flows used in operating activities was ($39,626) consisting of a net loss of ($42,626); increase in deposits of ($4,000); and expenses paid on behalf of the company by a related party of $7,000. For the fiscal year ended August 31, 2011, net cash flows used in operating activities was ($516). Net cash flows used in operating activities was ($40,142) for the period from inception (June 6, 2011) to August 31, 2012.
Cash Flows from Financing Activities
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the fiscal year ended August 31, 2012, net cash from financing activities was $36,500 consisting of $23,500 of proceeds from issuances of common stock and $13,000 in loan from a director. For the fiscal year ended August 31, 2011, net cash from financing activities was $5,104 consisting of $4,500 of proceeds received from issuances of common stock and $604 in loan from a director. For the period from inception (June 6, 2011) to August 31, 2012, net cash provided by financing activities was $41,604 consisting of $28,000 of proceeds received from issuances of common stock and $13,604 in loan from a director.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Annual Report, we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any offbalance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors' report accompanying our August 31, 2012 and August 31, 2011 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8. Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
(A DEVELOPMENT STAGE COMPANY)
Report of Independent Registered Public Accounting Firm
F-0
Balance Sheets as of August 31, 2011 and August 31, 2012
F-1
Statements of Operations for the periods ended August 31, 2012 and 2011 and
the period from June 6, 2011 (Date of Inception) to August 31, 2012
F-2
Statement of Stockholder’s equity (Deficit) for the period from inception on June 6, 2011
through August 31, 2011 and August 31, 2012
F-3
Statements of Cash Flows for the periods ended August 31, 2012 and 2011 and
F-4
Notes to the Financial Statements
F-5 - F-8
9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Global Lines, Inc.
16400 Collins Avenue Unit 2142
Sunny Isles Beach FL 33160
We have audited the accompanying balance sheet of Global Lines, Inc. (“the Company”) as of August 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended August 31, 2012 and for the period from inception on June 6, 2011 through August 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of Global Lines, Inc. as of August 31, 2012 and 2011, and the results of its operations and its cash flows for the year ended December 31, 2012 and for the period from inception on June 6, 2011 through August 31, 2011, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had accumulated losses of $43,142 as of August 31, 2012, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Sadler, Gibb & Associates, LLC
Sadler, Gibb & Associates
Farmington, UT
November 9, 2012
F-0
10
GLOBAL LINES INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
| ASSETS | ||||
| | | | | |
| | August 31, 2012 | August 31, 2011 | ||
| | | | | |
| CURRENT ASSETS | | | ||
| | | | | |
| Cash and cash equivalents | $ 1,462 | $ 4,588 | ||
| Deposits | 4,000 | | - | |
| | | | ||
| Total current assets | 5,462 | | 4,588 | |
| | | | ||
| TOTAL ASSETS | $ 5,462 | | $ 4,588 | |
| | | | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| | | | ||
| CURRENT LIABILITIES | | | | |
| | | | ||
| Notes payable- related parties | $ 20,604 | | $ 604 | |
| | | | ||
| Total Liabilities | 20,604 | | 604 | |
| | | | ||
| STOCKHOLDERS EQUITY (Deficit) | | | | |
| | | | ||
| Common stock, par value $0.001; 75,000,000 shares authorized, 7,300,000 and 4,500,000 shares issued and outstanding, respectively | 7,300 | | 4,500 | |
| Additional paid in capital | 20,700 | - | ||
| Deficit accumulated during the development stage | (43,142) | | (516) | |
| | | | ||
| Total Stockholders’ Equity (Deficit) | (15,142) | | 3,984 | |
| | | | ||
| TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) | $ 5,462 | | $ 4,588 | |
See accompanying notes to financial statements.
F-1
11
GLOBAL LINES INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
| | Year ended August 31, 2012 | For the period from June 6, 2011 (Inception) to August 31, 2011 | For the period from June 6, 2011 (Inception) to August 31, 2012 | |
| | | | | |
| REVENUES | $ - | $ - | $ - | |
| | | | | |
| OPERATING EXPENSES | | | | |
| | Professional fees | 41,928 | - | 41,928 |
| General & administrative | 698 | 516 | 1,214 | |
| | Depreciation | - | - | - |
| | | | | |
| | TOTAL OPERATING EXPENSES | 42,626 | 516 | 43,142 |
| | | | | |
| | NET LOSS FROM OPERATIONS | (42,626) | (516) | (43,142) |
| | | | | |
| | PROVISION FOR INCOME TAXES | - | - | - |
| | | | | |
| | NET LOSS | $ (42,626) | $ (516) | $ (43,142) |
| | | | | |
| | NET LOSS PER SHARE: BASIC AND DILUTED | $ (0.00) | $ (0.00) | |
| | | | | |
| | WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | 5,879,891 | 4,500,000 | |
See accompanying notes to financial statements.
F-2
GLOBAL LINES INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIT)
| Common Stock | Additional Paid-in | Deficit Accumulated during the Development | Total Stockholders’ | ||
| | Shares | Amount | Capital | Stage | Equity (Deficit) |
| | | | | | |
| Inception, June 6, 2011 | - | $ - | $ - | $ - | $ - |
| | | | | | |
| Shares issued for cash at $0.001 per share | 4,500,000 | 4,500 | - | - | 4,500 |
| | | | | | |
| Net loss for the year ended August 31, 2011 | - | - | - | (516) | (516) |
| | | | | | |
| Balance, August 31, 2011 | 4,500,000 | 4,500 | - | (516) | 3,984 |
| | | | | | |
| Shares issued for cash at $0.001 per share | 500,000 | 500 | - | | 500 |
| | | | | | |
| Shares issued for cash at $0.01 per share | 2,300,000 | 2,300 | 20,700 | - | 23,000 |
| | | | | | |
| Net loss for the year ended August 31, 2012 | - | - | - | (42,626) | (42,626) |
| | | | | | |
| Balance, August 31, 2012 | 7,300,000 | $ 7,300 | $20,700 | $ (43,142) | $ (15,142) |
See accompanying notes to financial statements.
F-3
13
GLOBAL LINES INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS