Forward-Looking Statements
This annual report contains certain information that may constitute
"forward-looking statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. While we have specifically identified certain
information as being forward-looking in the context of its presentation, we
caution you that all statements contained in this report that are not clearly
historical in nature, including statements regarding anticipated financial
performance, management's plans and objectives for future operations, business
prospects, market conditions, and other matters are forward-looking.
Forward-looking statements are contained principally in the sections of this
report entitled "Business," "Risk Factors," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." Without limiting the
generality of the preceding sentence, any time we use the words "expects,"
"intends," "will," "anticipates," "believes," "confident," "continue,"
"propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might,"
"goals," "objectives," "targets," "planned," "projects," and similar
expressions, we intend to clearly express that the information deals with
possible future events and is forward-looking in nature. However, the absence of
these words or similar expressions does not mean that a statement is not
forward-looking. For GWSN, particular uncertainties that could cause our actual
results to be materially different than those expressed in our forward-looking
statements include, without limitation:
· our ability to maintain and grow our existing customer base;
· the amount and timing of our cash flows and earnings, which may be
impacted by customer, competitive, supplier and other dynamics and
conditions;
· our ability to maintain or improve margins through business efficiencies;
· our ability to launch new product and service offerings that achieve
market acceptance with acceptable margins;
· changes in law, economic and financial conditions, including tax law
changes, changes to privacy requirements, changes to telemarketing, email
marketing and similar consumer protection laws, interest and exchange rate
volatility, and trade tariffs applicable to the products we sell;
· the impact of potential information technology, cybersecurity or data
security breaches.
Forward-looking information involves risks, uncertainties, and other factors
that could cause actual results to differ materially from those expressed or
implied in, or reasonably inferred from, such statements, including without
limitation, the risks and uncertainties disclosed above. Therefore, caution
should be taken not to place undue reliance on any such forward-looking
statements. Much of the information in this report that looks toward future
performance of our Company is based on various factors and important assumptions
about future events that may or may not actually occur. As a result, our
operations and financial results in the future could differ materially and
substantially from those we have discussed in the forward-looking statements
included in the Annual Report. We assume no obligation (and specifically
disclaim any such obligation) to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise,
except as required by law.
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Business Overview
Gulf West Security Network, Inc., a Louisiana corporation ("Gulf West") and its
wholly-owned subsidiaries, are principally engaged in the sale, installation,
servicing, and monitoring of electronic home and business security and
automation systems in the United States.
Gulf West Security Network, Inc. and LJR Security Services, Inc. ("LJR") are
active in the engineering, design, installation, remote monitoring and
after-market servicing of electronic intrusion alert and fire detection systems
for homes and businesses (the "alarm industry"). Both Gulf West and LJR are
based in Lafayette, Louisiana and were owned by Louis J. Resweber, a long-time
veteran of the alarm industry, who has also previously served as a corporate
officer, board member and executive consultant to a number of NYSE and
NASDAQ-listed public companies over the past 35 years.
Recent Development
Reverse Stock Split
On March 29, 2022, the Company filed an amendment to its Amended and Restated
Articles of Incorporation, effective as of 12:01 am on April 1, 2022, whereby
each 200 currently outstanding share of the Common Stock shall be combined and
converted into one (1) share of Common Stock (the "Reverse Stock Split").
Following the Reverse Stock Split, the Company will have approximately 23,091
shares of Common Stock outstanding and an additional 499,976,909 shares of
Common Stock available for issuance. In addition, the authorized shares of
common stock were increased from 475,000,000 shares to 500,000,000 shares and
the authorized shares of preferred stock were increased from 25,000,000 shares
to 50,000,000 shares, of which 635,000 shares of Series A Preferred Stock, one
(1) share of Series C Preferred Stock and 1,000 shares of Series D Preferred
Stock are outstanding.
Results of Operations
Years ended December 31, 2021 and 2020
We had revenue of $9,980 for the year ended December 31, 2021, as compared to
$11,690 for year ended December 31, 2020 a decrease of $1,710 or 15%. The
decrease in revenue was due to a lesser concentration on new alarm system sales
and installations, with our focus moving more toward alarm system monitoring and
the corresponding recurring monthly revenue ("RMR") that is associated with
monitoring services.
Cost of Revenue
Cost of revenue sold for the year ended December 31, 2021 was $3,641, as
compared to $4,339 for the year ended December 31, 2020.
General and Administrative
Our general and administrative expenses for the year ended December 31, 2021
were $385,474, a decrease of $288,465, or 14%, compared to $673,939 for the year
ended December 30, 2020. General and administrative expenses decreased mainly
due to decrease in legal expenses from $223,559 in 2020 to minimal amount in
2021.
Sales and marketing
Our sales and marketing expenses for the year ended December 31, 2021 were $0,
compared to $26 for the year ended December 31, 2020. Minimal sales and
marketing expenses reflected management's decision to shift its focus from
retail to wholesale alarm operations.
Income from discontinued operations
Subsequent to the Merger, management decided to discontinue the activities of
NuLife. As a result, we recorded an income of $99,775 primarily due to a change
in the fair value of a derivative liability.
Net loss
As a result of the foregoing, for the year ended December 31, 2021, we recorded
a net loss of $291,471 compared to a net loss of $791,860 for the year ended
December 31, 2020.
Liquidity and Capital Resources
The Company's condensed consolidated financial statements are prepared using
accounting principles generally accepted in the United States ("U.S. GAAP")
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company has
limited commercial experience and had a net loss from continuing operations of
$391,246 for the year ended December 31, 2021, and an accumulated deficit of
$3,371,331, and a working capital deficit of $3,008,869 at December 31, 2021.
The Company has not yet established an ongoing source of revenue sufficient to
cover its operating costs and to allow it to continue as a going concern. The
accompanying condensed consolidated financial statements for the year ended
December 31, 2021, have been prepared assuming the Company will continue as a
going concern. The Company's cash resources will likely be insufficient to meet
its anticipated needs during the next twelve months. The Company will require
additional financing to fund its future planned operations, including research
and development and commercialization of its products.
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Operating Activities
During the year ended December 31, 2021, we used $147,367 of cash in operating
activities primarily as a result of our loss of $291,471 from continuing
operations, offset by net changes in working capital items of operating assets
and liabilities of $144,104.
During the year ended December 31, 2020, we used $566,186 of cash in operating
activities primarily as a result of our loss of $791,860 from continuing
operations, offset by net changes in working capital items of operating assets
and liabilities of $225,674.
Financing Activities
During the year ended December 31, 2021, financing activities provided $147,270
in proceeds from a bridge loan and used $1,767 in net payments to advances from
related party.
During the year ended December 31, 2020, financing activities provided $656,116
in proceeds from a bridge loan, provided $5,019 in proceeds from advances from
related party and used $20,010 in net payments to redemption of preferred stock.
Off-Balance Sheet Transactions
At December 31, 2021, the Company did not have any transactions, obligations or
relationships that could be considered off-balance sheet arrangements.
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