UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,, 2020 2021
OR
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COMMISSION FILE NUMBER 000-55805
GULF WEST SECURITY NETWORK, INC. |
(Exact name of registrant as specified in its charter) |
Nevada |
| 82-2908492 |
(State of incorporation) |
| (I.R.S. Employer Identification No.) |
2851 Johnson Street, Unit #194
Lafayette, LA 70503
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (337) 210-8790
Not applicable
(Former name, address and fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
N/A | N/A | N/A |
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 13, 2020,10, 2021, there were 4,618,250 shares of our common stock, par value $0.001 per share, outstanding.
GULF WEST SECURITY NETWORK, INC.
FORM 10-Q
FOR THE NINE MONTHS ENDED SEPTEMBER 30,, 2020 2021
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities |
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EXHIBIT INDEX |
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PART I – FINANCIAL INFORMATION
Gulf West Security Network, Inc.
A Nevada Corporation
Condensed Consolidated Financial Statements (Unaudited)
September 30, 20202021
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Gulf West Security Network, Inc.
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Notes to Unaudited Condensed Consolidated Financial Statements |
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| Table of Contents |
GULF WEST SECURITY NETWORK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2019 ASSETS Current Assets Cash Accounts receivable Prepaid expenses Total Current Assets Total assets LIABILITIES AND DEFICIENCY IN STOCKHOLDERS’ EQUITY Liabilities Current Liabilities Accounts payable and accrued liabilities Accounts payable - related party Accrued wages - related party Bridge loan from affiliates Liabilities of discontinued operations Total Liabilities Deficiency in Stockholders’ equity Preferred Stock, $0.001 par value, 25,000,000 shares authorized Preferred stock Series A, 635,000 and 742,500 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively Preferred stock Series B, nil issued or outstanding Preferred stock Series C, 1 share issued and outstanding Preferred stock Series D, 1,000 shares issued and outstanding Common stock, $0.001 par value; 475,000,000 shares authorized; 4,618,250 and 4,518,250 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively Additional paid in capital Accumulated deficit Total deficiency in stockholders’ equity Total liabilities and deficiency in stockholders’ equity 3 Months Ended 9 Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Revenue Monitoring and related services Product sales and installation Total Revenue Cost of Revenue Gross Profit Operating Expenses General and administrative Sales and marketing Total Operating Expenses Other Income/(Expense) Gain on debt settlement Loss on option dispute settlement Total Other Income/(Expense) Operating Loss Loss from continuing operations before provision for income taxes Provision for Income Taxes Loss from continuing operations Income (loss) from discontinued operations ) Net Loss Basic and diluted net loss per common share, continuing operations Basic and diluted net loss per common share, discontinued operations Weighted average shares outstanding September 30, 2021 December 31, 2020 ASSETS Current Assets Cash Accounts receivable Prepaid expenses Total Current Assets Total assets LIABILITIES AND DEFICIENCY IN STOCKHOLDERS’ EQUITY Liabilities Current Liabilities Accounts payable and accrued liabilities Accounts payable - related party Accrued wages - related party Unearned revenue Bridge loan from affiliates Liabilities of discontinued operations Total Liabilities Deficiency in Stockholders’ equity Preferred Stock, $0.001 par value, 25,000,000 shares authorized Preferred stock Series A, 635,000 and 635,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively Preferred stock Series B, nil issued or outstanding Preferred stock Series C, 1 share issued and outstanding Preferred stock Series D, 1,000 shares issued and outstanding Common stock, $0.001 par value; 475,000,000 shares authorized; 4,618,250 and 4,618,250 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively Stock payable Additional paid in capital Accumulated deficit Total deficiency in stockholders’ equity Total liabilities and deficiency in stockholders’ equity See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements. GULF WEST SECURITY NETWORK, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the three and nine months ended September 30, Preferred Stock Preferred Stock Preferred Stock Preferred Stock Common Stock Total Deficiency in Number of Shares Amount Number of Shares Amount Number of Shares Amount Number of Shares Amount Number of Shares Amount Paid-In Capital Accumulated Deficit Stockholders' Equity Balance at January 1, 2019 Net loss Balance at March 31, 2019 Net loss Balance at June 30, 2019 Net loss Balance at September 30, 2019 Net loss Balance at December 31, 2019 Net loss Balance at March 31, 2020 Net loss Balance at June 30, 2020 Redemption of preferred stock and issuance of common stock Net loss Balance at September 30, 2020 3 Months Ended 9 Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Revenue Monitoring and related services Product sales and installation Total Revenue Cost of Revenue Gross Profit Operating Expenses General and administrative Sales and marketing Total Operating Expenses Other Income/(Expense) Net gain on debt settlements Interest expense Loss on option dispute settlement Total Other Income/(Expense) Operating Loss Loss from continuing operations before provision for income taxes Provision for Income Taxes Loss from continuing operations Income (loss) from discontinued operations Net Loss Basic and diluted net loss per common share, continuing operations Basic and diluted net loss per common share, discontinued operations Weighted average shares outstanding See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements. GULF WEST SECURITY NETWORK, INC. CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY (UNAUDITED) For the nine months endedSeptember 30, 9 Months Ended September 30, 2020 September 30, 2019 Cash Flows From Operating Activities Net Loss Adjustments to reconcile net loss to net cash used in operating activities Net loss from discontinued operations Bad debts Gain on debt settlement Changes in operating assets and liabilities: Accounts receivable Inventory Prepaid expenses Accounts payable and accrued liabilities Accrued wages - related party Net cash used in operating activities – continuing operations Net cash used in operating activities – discontinued operations Cash Flows From Financing Activities Advances from related party, net Proceeds from bridge loan from affiliates Redemption of preferred stock Cash provided by financing activities Net Change In Cash Cash at Beginning of Year Cash at End of Year Supplemental Disclosure of Cash Flow Information Cash paid for interest Cash paid for income taxes Preferred Stock Preferred Stock Preferred Stock Preferred Stock Common Stock Additional Total Deficiency in Number of Shares Amount Number of Shares Amount Number of Shares Amount Number of Shares Amount Number of Shares Amount Stock Payable Paid-In Capital Accumulated Deficit Stockholders' Equity Balance at December 31, 2019 Net loss Balance at March 31, 2020 Net loss Balance at June 30, 2020 Redemption of preferred stock and issuance of common stock Net loss Balance at September 30, 2020 Settlement of liabilities of discontinued operations Net loss Balance at December 31, 2020 Net loss Balance at March 31, 2021 Net loss Balance at June 30, 2021 Net loss Balance at September 30, 2021 See accompanying notes, which are an integral part of these condensed consolidated financial statements. GULF WEST SECURITY NETWORK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the nine months endedSeptember 30, 2021 and 2020 9 Months Ended September 30, 2021 September 30, 2020 Cash Flows From Operating Activities Net Loss Adjustments to reconcile net loss to net cash used in operating activities Net income from discontinued operations Bad debts Net gain on debt settlements Changes in operating assets and liabilities: Accounts receivable Prepaid expenses Accounts payable and accrued liabilities Accrued wages - related party Unearned revenue Net cash used in operating activities – continuing operations Net cash used in operating activities – discontinued operations Cash Flows From Financing Activities Advances from related party, net Proceeds from bridge loan from affiliates Redemption of preferred stock Cash provided by financing activities Net Change In Cash Cash at Beginning of Year Cash at End of Period Supplemental Disclosure of Cash Flow Information Cash paid for interest Cash paid for income taxes See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) As of September 30, NOTE 1: NATURE OF THE BUSINESS Gulf West Security Network, Inc. (a Nevada Corporation), and its wholly-owned subsidiaries, formerly known as “NuLife Sciences, Inc.” (“we”, “us”, “our”, “Gulf West”, “GWSN”, or the “Company”), are principally engaged in providing residential and commercial electronic security, home automation, and systems integration services on both a retail and wholesale basis. The Company’s retail division, which includes its wholly-owned subsidiary LJR Security Services, Inc. (a Louisiana Corporation) (“LJR”), is actively engaged in the hands-on design, engineering, sales, installation, after-market servicing, inspection and remote electronic monitoring of home (residential) burglar, fire and medical alarm systems as well as fully-integrated business (commercial) security and automation systems in the United States. The Company’s wholesale division, which operates under the name Gulf West Security Network (or “Gulf West”), is further engaged in the development and expansion of a proprietary coalition (alliance or network) of independently-branded life safety and property protection providers, fire alert and suppression system installers, electronic remote monitoring and video surveillance specialists, smart home designers, commercial systems integrators, structured wiring professionals and electrical contractors. Merger On August 9, 2018, the Board of Directors of the Company through its wholly-owned subsidiary NuLife Acquisition Corp. (“NuLife Sub”) approved and executed an agreement of merger and plan of reorganization with LJR (the “Merger Agreement”) The merger was accounted for as a reverse merger, whereby LJR was considered the accounting acquirer and became our wholly-owned subsidiary. In accordance with the accounting treatment for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been replaced with the historical financial statements of LJR prior to the reverse merger. The financial statements after completion of the reverse merger include the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Restatement of Articles of Incorporation On September 19, 2018, On September 20, 2018, the Board of Directors of the Company designated one (1) share of Series C Preferred Stock (the “Series C Stock”) and one thousand (1,000) shares of Series D Preferred Stock (the “Series D Stock”). The classes of Series C Stock and Series D Stock were created in anticipation of the closing of the NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined. Principles of Consolidation The Company’s condensed consolidated financial statements include all accounts of Gulf West Security Network, Inc., LJR, and NuLife Sciences, Inc. from September 28, 2018, the consummation of the Merger Agreement. All inter-company balances and transactions have been eliminated in consolidation. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (“U.S.”) as promulgated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and with the rules and regulations of the U.S Securities and Exchange Commission (“SEC”). In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year. Therefore, the interim unaudited condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements contained in the Company’s Annual Report on Form GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Reclassifications Certain reclassifications have been made to the prior period’s financial statements to enhance comparability with the current Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of one year or less, when purchased, to be cash. As of September 30, Capitalization of Fixed Assets The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Revenue Recognition The Company retrospectively adopted FASB Accounting Standards Update No. 2014-09 “Revenue from Contracts with Customers”, on January 1, 2018, which did not have a material impact on the Company’s condensed consolidated financial statements. The Company generates revenue primarily through contractual monthly recurring fees received for monitoring and related services provided to customers. In transactions involving security systems that are sold outright to the customer, or where equipment is already owned by the customer, the Company’s performance obligations include monitoring, related services, and the sale and installation, or refurbish and repair, of the security systems. Revenue associated with the sale and installation of security systems is recognized once installation is complete and is reflected in installation and repair revenue in the condensed consolidated statements of operations. Revenue associated with monitoring and related services is recognized as those services are provided and is reflected in monitoring and related services revenue in the condensed consolidated statements of operations. Early termination of the contract by the customer results in a termination charge in accordance with the contract terms. Contract termination charges are recognized in revenue when collectability is probable and are reflected in monitoring and related revenue in the condensed consolidated statements of operations. Amounts collected from customers for sales and other taxes are reported net of the related amounts remitted. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Barter Transactions The Company conducts certain barter sales through trade organizations for which it is a member, as are some of its customers. The barter transactions are generally related to the Company providing its security services, and the value of these services is recorded at fair value which is the contracted for value of the services with the customer, which is the more readily available measure as to its valuation. Fair Value Measurements Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in its balance sheet, where it is practicable to estimate that value. In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” the Company measures certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: · Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; · Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Fair Value Measurement Fair Value Measurement Carrying Value Level 1 Level 2 Level 3 Carrying Value Level 1 Level 2 Level 3 As of September 30, 2020 As of September 30, 2021 Derivative liabilities, debt and equity instruments As of December 31, 2019 As of December 31, 2020 Derivative liabilities, debt and equity instruments Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Changes in Level 3 assets measured at fair value for the nine months ended September 30, Balance, December 31, 2018 Balance, December 31, 2019 Changes in fair value of derivative Balance, December 31, 2019 Balance, December 31, 2020 Change in fair value of derivative Balance, September 30, 2020 Balance, September 30, 2021 Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand. The Company determined that certain convertible debt instruments outstanding as of the date of these unaudited condensed consolidated financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible notes payable have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period is recorded in earnings as “Income (loss) from discontinued operations.” Please refer to Note 3 below. Going Concern 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 GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund its operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Recent Accounting Pronouncements NOTE 3: ACQUIRED ASSETS AND ASSUMED LIABILITIES OF DISCONTINUED OPERATIONS Assets Acquired and Liabilities Assumed through Reverse Merger Pursuant to the terms of the Merger Agreement dated August 9, 2018, and in exchange for all one hundred (100) issued and outstanding shares of LJR Security Services, Inc., the LJR GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) As a result of the Reverse Merger, the Company has acquired the following assets and liabilities which were recorded at fair value. The fair values of assets acquired and liabilities assumed are as follows: August 9, September 30, 2020 August 9, December 31, 2020 September 30, 2021 Security deposit Goodwill Accrued expenses Accrued interest Notes payable Convertible notes Derivative liability Liabilities of discontinued operations Total identified net assets Total identified net assets (liabilities) As a result of the Reverse Merger, we acquired $603,440 liabilities of the former operations of NuLife Sciences, Inc., which have been discontinued. As of September 30, Goodwill The Company acquired goodwill through the Reverse Merger described above. The carrying value of $612,771 was impaired and written down to $0 as of December 31, 2018. Notes Payable As a result of the Reverse Merger the Company assumed notes payable with total outstanding principal of $117,500 and accrued interest of $36,304, detailed as follows: · Demand note payable with outstanding principal of $25,000, and accrued interest of $17,400. The note matured on September 30, 2015 and carries an interest rate of 12%. This note is in default. · Demand notes payable to East West Secured Developments, LLC, with a combined outstanding principal of $74,500, and accrued interest of $18,061. These notes matured on October 31, 2016 and carry an interest rate of 12%. These notes are in default. · Term note payable with outstanding principal of $18,000, and accrued interest of $843. The note matured on July 31, 2019 and carries an interest at the rate of 3%. This note is in default. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Convertible Notes As a result of the Reverse Merger the Company assumed convertible notes with total outstanding principal of $138,500 and accrued interest of $11,078, detailed as follows: September 30, 2020 September 30, 2021 (A) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and was due December 2019 (in default) (B) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share (in default) (C) Convertible note payable, annual interest rate of 5%, convertible into common stock at a variable rate per share and was due September 2018 (in default) (D) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.30 per share and is due October 13, 2020 (D) Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.30 per share and was due October 13, 2020 Total convertible debt A. Originally issued in 2017, outstanding principal of $5,000, and accrued interest of $715. B. Hayden note was issued on August 23, 2017, outstanding principal of $50,000, and accrued interest of $4,538. C. Current holder acquired the note in May 2018. Current outstanding principal of $63,500, and accrued interest of $4,295. D. Escala note was issued October 13, 2017, outstanding principal of $20,000, and accrued interest of $1,530. As of September 30, Derivative Liability As of September 30, The fair value of the embedded derivative was determined using the Black-Scholes Model with the following assumptions: September 30, December 31, (1) dividend yield of 0%; 0%; (2) expected volatility of 315%; (3) risk-free interest rate of 0.09%; (4) expected life of 0.33 year; 0.33 year; (5) fair value of the Company’s common stock of $0.10 per share. $0.06 per share. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 4: PREPAID EXPENSES The Company has available to its credit through certain trade organizations as a result of barter transactions for services. These amounts are available for use with certain vendors and establishments who are part of the same trade organization. These balances do not represent cash available to the Company, and as such are recorded as the prepaid expenses account as incurred. As of September 30, As of both September 30, NOTE 5: An officer of the Company agreed to defer portions of his salaries annually since inception. The balances due under this arrangement were The same officer of the Company advances funds to the Company and receives repayments on such advances throughout the year in the form of allowing Company use of personal credit cards. The balances due under this arrangement as of September 30, NOTE As of September 30, NOTE The Company is authorized to issue 475,000,000 shares of $0.001 par value common stock and 25,000,000 shares of $0.001 par value preferred stock. Period Closing Date (a) (b) (c) (d) July 1 to 31, 2020 July 2, 2020 100,000 shares of Series A Convertible Preferred Stock August 1 to 31, 2020 September 1 to 30, 2020 September 17, 2020 7,500 shares of Series A Convertible Preferred Stock Total (July 1 to September 30, 2020) 107,500 shares of Series A Convertible Preferred Stock On July 2, 2020, the Company redeemed its 100,000 shares of Series A Convertible Preferred Stock for $18,010. On September 17, 2020, the Company redeemed its 7,500 shares of Series A Convertible Preferred Stock for $2,000 and issuance of 100,000 shares of Common Stock. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The table below shows the redemption of Company’s Series A Convertible Preferred Stock for the year ended December 31, 2020: Closing Date (a) (b) (c) (d) July 2, 2020 100,000 shares of Series A Convertible Preferred Stock September 17, 2020 7,500 shares of Series A Convertible Preferred Stock Total 107,500 shares of Series A Convertible Preferred Stock As of September 30, Description of Preferred Stock: Series A Preferred Stock As of September 30, · Holders of the Series A Stock are entitled to receive dividends or other distributions with the holders of the common stock on an “as converted” basis when, as, and if declared by the Board of Directors of the Company. · Holders of shares of Series A Stock, upon Board of Directors approval, may convert at any time following the issuance upon sixty-one (61) day written notice to the Company. Each share of Series A Stock shall be convertible into such number of fully paid and non-assessable shares of common stock as is determined by multiplying the number of issued and outstanding shares of the Company’s common stock together with all other derivative securities, including securities convertible into or exchangeable for common stock, whether or not then convertible or exchangeable (b) subscriptions, rights, options and warrants to purchase shares of common stock, whether or not then exercisable, but entitled to vote on matters submitted to the shareholders, issued by the Company and outstanding as of the date of conversion, by .000001, then multiplying that number of shares of Series A Stock to be converted. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) · In case of any consolidation, merger of the Company, or a change of control of the Company’s Board, the holders are entitled, without any further action required or permission by the Board, to exercise their conversions rights. In the case of any consolidation, merger of the Company, the Board shall mail to each holder of Series A Stock at least thirty (30) days prior to the consummation of such event, a notice thereof and each such holder shall have the option to either (i) convert such holder’s shares of Series A Stock into shares of common stock pursuant to this paragraph and thereafter receive the number of shares of common stock or other securities or property, or cash, as the case may be, to which a holder of the number of shares of common stock of the Company deliverable upon conversion of such Series A Stock would have been entitled upon conversion immediately preceding such consolidation, merger or conveyance, or (ii) exercise such holder’s rights pursuant to the liquidation distribution provisions set forth in Section 8.1(a) · In the event of a liquidation, the holders of shares of the Series A Stock shall be entitled to receive, prior to the holders of the other series of preferred stock and prior and in preference to any distribution of the assets or surplus funds of the Company to the holders of any other shares of stock of the Company by reason of their ownership of such stock, an amount equal to five dollars ($5.00) per share with respect to each share of Series · The holders of each share of Series A Stock shall have that number of votes as determined by multiplying the number of issued and outstanding shares of the Company’s common Stock together with all other derivative securities issued by the Company and outstanding as of the date of conversion, whether or not then convertible or exchangeable, entitled to vote on matters submitted to the shareholders, by .000001, then multiplying that number of shares of Series A Stock to be converted. · The Corporation shall have the option to redeem all of the outstanding shares of Series A Stock at any time on an “all or nothing” basis, unless otherwise mutually agreed in writing between the Corporation and the holders of shares of Series A Stock holding at least 51% of such Series A Stock, beginning ten (10) business days following notice by the Company, at a redemption price the higher of (a) five dollars ($5.00) per share, or (b) fifty percent (50%) of the trailing average highest closing bid price of the Company’s common stock as quoted on www.OTCMarkets.com or the Company’s primary listing exchange on the date of notice of redemption, unless otherwise modified by mutual written consent between the Company and the holders of the Series A Stock (the · The shares of Series A Stock acquired by the Company by reason of conversion or otherwise can be reissued, but only as an amended class, not as shares of Series A Stock. Series C Preferred Stock · The Company has 1 share of Preferred Stock designated as Series C Preferred Stock. Although the Series C Preferred Stock carries no dividend, distribution, liquidation or conversion rights, each share of Series C Preferred Stock grants the holder 50.1% of the total votes of all classes of capital stock of the Company and are able to vote together with the common stockholders on all matters. Consequently, the holder of the Company’s Series C Preferred Stock is able to unilaterally control the election of its board of directors and, ultimately, the direction of the Company. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Series D Preferred Stock · The Company has 1,000 shares of Preferred Stock designated as Series D Preferred Stock. Although the Series D Preferred Stock have no voting rights, shares of Series D Preferred Stock in the aggregate are convertible into fifty million two hundred thirty-three thousand five hundred forty-one (50,239,541) shares of common stock of the Company. Additionally, the Series D Preferred Stock has pari passu dividend, distribution and liquidation rights with the common stock. Stock Options As a result of the Reverse Merger the Company has outstanding the following stock options as of September 30, September 30, 2020 December 31, 2019 September 30, 2021 December 31, 2020 Stock Options Weighted Average Exercise Price Stock Options Weighted Average Exercise Price Stock Options Weighted Average Exercise Price Stock Options Weighted Average Exercise Price Outstanding - beginning of year Granted Exercised Forfeited Outstanding - end of year Exercisable and vested - end of year Weighted average remaining term Average intrinsic value NOTE Litigation From time to time the Company may become a party to litigation in the normal course of business. Management believes that there are no current legal matters that would have a material effect on the Company’s financial position or results of operations. GULF WEST SECURITY NETWORK, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, No material events or transactions have occurred during the subsequent event reporting period that required recognition or disclosure in the financial statements. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of Gulf West Security Network, Inc. f/k/a NuLife Sciences, Inc., a Nevada corporation (“GWSN,” “we,” “us,” “our,” and the “Company”) and its wholly-owned subsidiaries financial condition and results of operations includes information with respect to our plans and strategies for our business and should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes (“Interim Financial Statements”) included herein, and our consolidated financial statements, related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Forward-Looking Statements This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words “believe,” “anticipate,” “expect,” “will,” “estimate,” “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Business Overview The Company’s retail division, which includes its wholly-owned subsidiary, LJR Security Services, Inc., a Louisiana corporation (“LJR”), is actively engaged 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”). The Company’s wholesale division, which operates under the name Gulf West Security Network (or “Gulf West”), is further engaged in the development and expansion of a proprietary coalition (alliance or network) of independently-branded life safety and property protection providers, fire alert and suppression system installers, electronic remote monitoring and video surveillance specialists, smart home designers, commercial systems integrators, structured wiring professionals and electrical contractors. Both Gulf West and LJR are based in Lafayette, Louisiana and were previously owned by Louis J. (“Lou”) 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. Reverse Merger On August 9, 2018, the Board of Directors of the Company through its wholly-owned subsidiary NuLife Acquisition Corp., a Louisiana corporation (“NuLife Sub”), approved and executed an agreement of merger and plan of reorganization with LJR (the “Merger Agreement”) The Merger On September 19, 2018, the Company amended and restated its articles of incorporation of the Company providing for a change in the Company’s name to “Gulf West Security Network, Inc.” The Company also amended and restated its bylaws to reflect the name change. Change of Fiscal Year On September 28, 2018, the Company’s Board approved a change in fiscal year end from September 30th to December 31st. The decision to change the fiscal year end was related to the Merger to closely align the Company’s operations and internal controls with that of its wholly owned subsidiary LJR. Acquisition Agreement and Related Matters On December 21, 2020, the Company entered into a share purchase agreement with the sole shareholder and owner of Westech Security and Investigations, Inc. (“Westech”). Pursuant to the terms of the share purchase agreement, the sole shareholder of Westech will sell all her shares to the Company in exchange for approximately 66% of the Company’s issued and outstanding shares of common stock (the “Sale”), to become effective at such time as the articles of merger have been filed. The remaining 34% of the Company’s issued and outstanding shares of common Stock shall consist of presently issued and outstanding shares of common Stock of the Company and the following to be issued in the form of Company’s Series E Preferred Stock, convertible into one share of Company’s common Stock, and shall consist of: (i) an exchange of all outstanding preferred stock of the Company, (ii) an exchange of all outstanding loans to the Company which shall either be satisfied or shall convert to Series E Preferred Stock immediately following the closing of the sale so that there are no outstanding loans to the Company at closing of the sale, (iii) a bridge loan of $500,000 previously made to Westech, which shall convert to Series E Preferred Stock immediately following the closing of the sale and (iv) an investment of $750,000 into the Company at closing of the sale. In connection with the additional $1,250,000, the Company shall issue 1,250,000 shares of Series E Preferred Stock. Furthermore, subject to the approval of Company’s shareholder and subject to discretion of the Board of Directors of the Company, the Company will change its name to “Westech Security and Investigation, Inc”, increase the number of shares of authorized preferred stock so it has sufficient amount of preferred stock to undertake the transactions contemplated by the sale; and undertake a 1-for-187 reverse stock split of its shares of common stock. Subsequent to the period ended September 30, 2021, the Company is still in the process of completing this merger transaction. On April 7, 2021, the Board of Directors of the Company approved the amendment of articles of incorporation to change the name to “Westech Security and Investigation, Inc., increase the number of authorized shares to 500,000,000 shares of common stock and 50,000,000 shares of preferred stock and effect a reverse stock split of the issued and outstanding common stock at a range of 1-for-200 to 1-for-250. These amendments were also approved by the written consent of the holder of the one share of Series C Preferred Stock based on a vote of 50.1% of the outstanding voting stock of the Company. The amendment will be effective upon filing of such amendment to the articles of incorporation with the Secretary of State of Nevada. Our corporate office is located at 2851 Johnson Street, Unit #194, Lafayette, LA, 70503 and our telephone number is (337) 210-8790. Critical Accounting Policies and Estimates Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined. Recent Accounting Pronouncements See Note 2 of the accompanying unaudited consolidated financial statements for a discussion of recently issued accounting standards. Results of Operations Three months ended September 30, 20 We had revenue of $2,647 for the three months ended September 30, 2021, as compared to $2,831 for the three months ended September 30, 2020, Cost of Revenue Cost of revenue sold for the three months ended September 30, General and Administrative Our general and administrative expenses for the three months ended September 30, Sales and marketing Our sales and marketing expenses for the three months ended September 30, Loss from discontinued operations Subsequent to the Merger, Net loss As a result of the foregoing, for the three months ended September 30, Nine Total Revenue We had revenue of $7,944 for the nine months ended September 30, 2021, as compared to $9,018 for the nine months ended September 30, 2020 Cost of Revenue Cost of revenue sold for the nine months ended September 30, General and Administrative Our general and administrative expenses for the nine months ended September 30, Sales and marketing Our sales and marketing expenses for the nine months ended September 30, Loss from discontinued operations Subsequent to the Merger, Net loss As a result of the foregoing, for the nine months ended September 30, Liquidity and Capital Resources At September 30, We do not believe that we have enough cash on hand to operate of business during the next 12 months. The Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products. To date, the Company has financed its operation primarily from advances from its affiliates. As of September 30, We may seek to raise additional funding that we require in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our operations. We currently do not have any agreements or arrangements in place for any future financing. Operating Activities During the nine months ended September 30, 2021, we used $115,027 of cash in operating activities primarily as a result of our loss of $326,922 from operations, offset by net changes in working capital items of operating assets and liabilities of $180,297. During the nine months ended September 30, 2020, we used Financing Activities During the nine months ended September 30, During the nine months ended September 30, 2020, financing activities provided $492,725 in proceeds from a bridge loan, provided $5,674 advances from related party and used $20,010 in redemption of preferred stock. Off-Balance Sheet Transactions At September 30, Item 3. Quantitative and Qualitative Disclosure About Market Risk As a smaller reporting company, we are not required to provide the information required by this Item 3. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Form 10-Q, management performed, with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, Due to resource constraints, material weaknesses are evident to management regarding our inability to generate all the necessary disclosure for inclusion in our filings with the Securities and Exchanges Commission, which is due to the lack of resources and segregation of duties. We lack sufficient personnel with the appropriate level of knowledge, experience and training in GAAP to meet the demands for a public company, including the accounting skills and understanding necessary to fulfill the requirements of GAAP-based reporting. This weakness causes us to not fully identify and resolve accounting and disclosure issues that could lead to a failure to perform timely internal control and reviews. In addition, the Company has not established an audit committee, does not have any independent outside directors on the Company’s Board of Directors, and lacks documentation of its internal control processes. Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial condition. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time. Not required for smaller reporting companies. Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. None Exhibit No. Description of Exhibit Rule 13a14(a)/15d-14(a) Certification of Principal Executive Officer Rule 13a14(a)/15d-14(a) Certification of Principal Financial Officer 101.INS** Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH** Inline XBRL Taxonomy Extension Schema Document 101.CAL** Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB** Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE** Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF** Inline XBRL Taxonomy Definition Linkbase Document 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). * Filed herewith ** Pursuant to the requirements of Section 13 or 15(d) 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. 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