10-Q 1 lansdowne10q.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM 10-Q -------------- x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2010 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: _____________ to _____________ -------------- LANSDOWNE SECURITY, INC. (Exact name of registrant as specified in its charter) -------------- Texas 333-94797 75-2738727 ----------------------------- ---------------- ----------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 27 Chicora Ave Toronto, ON, M5R 1T7 (Address of Principal Executive Office) (Zip Code) 416-928-3095 (Registrant's telephone number, including area code) (Hudson's Grill International, Inc.) -------------- 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 [X] Yes [_] No days. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [_]Accelerated filer [_]Non-accelerated filer [_] Small reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [X] Yes [_] No Act). State the number of shares of outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 17,288,986 shares of Class A Common Stock outstanding as of September 30, 2010. PART I - FINANCIAL INFORMATION Item 1. Financial Statements ----------------------------- LANSDOWNE SECURITY, INC. (FORMERLY HUDSON'S GRILL INTERNATIONAL, INC. Consolidated Balance Sheets September 30, December 31, 2010 2009 (unaudited) (audited) --------------- -------------- Assets Total assets $ -- $ -- --------------- -------------- Liabilities and Stockholders' Deficit Current liabilities: Accounts payable and accrued liabilities 5,240 11,021 Note payable related party 65,420 25,437 --------------- -------------- Total current liabilities $ 70,661 36,458 =============== ============== Commitments and contingencies Stockholders' deficit: Common stock, no par value; 100,000,000 shares authorized, 345,939 shares issued and outstanding at September 30, 2010 and 10,388,986 shares issued and outstanding at December 31, 2009 $ 402,678 402,678 Preferred stock, $0.001 par value, 10,000,00 shares authorized no shares issued and outstanding -- -- Accumulated deficit (473,339) (439,136) --------------- -------------- Total stockholders' deficit (70,661) (36,458) --------------- -------------- Total liabilities and stockholders' deficit $ (0) $ -- =============== ============== The accompanying notes are an integral part of these financial statements 1

LANSDOWNE SECURITY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. UNAUDITED INFORMATION --------------------- The consolidated balance sheet of Lansdowne Security, Inc. (the "Company") as of September 30, 2010, and the consolidated statements of operations for the three month period and nine month periods ended September 30, 2010 and 2009, have not been audited. However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the financial position of the Company as of September 30, 2010, and the results of operations for the three months and nine months ended September 30, 2010 and 2009. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These financial statements should be read in conjunction with the financial statements and notes to financial statements included in the Company's consolidated financial statements as filed on Form 10-K for the year ended December 31, 2009. 2. PRINCIPLES OF CONSOLIDATION --------------------------- The consolidated financial statements include the accounts of Lansdowne Security, Inc., and its subsidiary. Significant intercompany accounts and transactions have been eliminated in consolidation. 3. DEVELOPMENT STAGE COMPANY ------------------------- The Company has not earned any revenue from operations since inception. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Company". The Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception. The Company has elected a fiscal year ending on December 31. 4. EARNINGS PER SHARE ------------------ Basic earnings per share are calculated on the weighted average number of common shares outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and common stock equivalents outstanding for the period. Common stock equivalents are excluded from the computation if such inclusion would have an anti-dilutive effect. 5. RELATED PARTY TRANSACTION ------------------------- A shareholder of the Company paid expenses in the quarter of $23,520. The Company currently has no agreement with the shareholder and the loan bears no interest and is due on demand. 6. SUBSEQUENT EVENT ---------------- None. 4 GOING CONCERN ------------- The Company will need working capital for its future planned activity, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining sufficient working capital to be successful in that effort. The management of the Company has developed a strategy, which it believes will accomplish this objective, through short term loans, and equity funding, which will enable the Company to operate for the coming year. In order to continue as a going concern, we require additional financing. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to continue as a going concern, we would likely be unable to realize the carrying value of our assets reflected in the balances set out in the preparation of the consolidated financial statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results ------------------------------------------------------------------------------- of Operations ------------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND OTHER PORTIONS OF THIS REPORT CONTAIN FORWARD-LOOKING INFORMATION THAT INVOLVES RISKS AND UNCERTAINTIES, OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED BY THE FORWARD-LOOKING INFORMATION. FACTORS THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, AVAILABILITY OF FINANCIAL RESOURCES FOR LONG TERM NEEDS, PRODUCT DEMAND, MARKET ACCEPTANCE AND OTHER FACTORS DISCUSSED ELSEWHERE IN THIS REPORT. THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE RELATED NOTES INCLUDED ELSEWHERE IN THIS REPORT. Material changes in the consolidated financial condition of the Company and in the results of their operations since the end of its last fiscal year and their results from the comparable period in their last fiscal year including the following: The Company's current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method. It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern. The Company's need for capital may change dramatically because of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires. Plan of Operation The Company's current purpose is to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to it by persons or companies who or which desire to seek the perceived advantages of a Securities Exchange Act of 1934 registered corporation. As of the date of this registration statement, the Company has no particular acquisitions in mind and has not entered into any negotiations regarding such an acquisition, and neither the Company's officer and director nor any promoter and affiliate has engaged in any negotiations with any representatives of the owners of any business or company regarding the possibility of a merger or acquisition between the Company and such other company. 5 Results of Operations The Company has no revenues to date. We incurred operating expenses in the amount of $23,520 for the three month period ended September 30, 2010, consisting of professional fees of $13,675 and office and general costs of $9,845. For the same period ending September 30, 2009, we incurred operating expenses in the amount of $5,188, consisting of professional fees of $1,000 and office and general of 4,188. For the nine month period ending September 30, 2010 we incurred operating expenses in the amount of $34,203, consisting of professional fees of $18,615 and office and general costs of $14,638. For the same period ending September 30, 2009, we incurred operating expenses in the amount of $20,194, consisting of professional fees of $21,195 and office and general costs of $3,040. Our net loss increased in the three month period ended September 30, 2010, as compared to the same period in fiscal 2009($23,520 as compared to $5,188). This increase was due to the increase in legal and filing costs associated with the redomiciling of the Company from Texas to Nevada. Liquidity and Capital Resources Since inception, we have funded most of our operational expenses from the issuance and sale of equity securities, and loans from a shareholder. At September 30, 2010, we have unsecured loans from a shareholder in an aggregate amount of $65,420. The amount due is unsecured with not fixed term of repayment. The repayment of any portion of the notes, either principal or interest, is limited by the free cash flow from operations. As of September 30, 2010, our assets totaled $0. Our total liabilities were $70,661, which consisted of shareholder loans of $65,420 and accounts payable of $5,240. Lansdowne Security had negative working capital at September 30, 2010. The Company will require additional capital to fund operations at its mine site, and to fund exploration and development of additionally acquired prospects unless operations generate sufficient revenues to support its business plan. The Company does not have any identified sources of capital at this time. Unless the Company finds needed capital, it will have to change its business objectives and operational plans and curtail some or all of its current operations. Because of its capital needs compared to its available working capital and funding prospects, the Company has added a going concern note to the financial statements for the three and nine months ended September 30, 2010. The note indicates that without an increase in revenues sufficient to cover expenses or additional sources of capital being obtained, the company may have to substantially curtail operations or terminate operations. In such event, the stockholders may experience a loss of their investment, and the Company may not be able to continue. Item 4T. Controls and Procedures. The Company maintains "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Act of 1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in reports 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, and that such information is accumulated and communicated to our management including the Company's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. 6 The management of the Company has designed and evaluated the Company's disclosure controls and procedures. Management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The Company's management, including its principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of March 31, 2009, and concluded that the disclosure controls and procedures were not effective, because certain deficiencies involving internal controls constituted a material weakness as disclosed in the Company's 2008 Form 10K. The material weaknesses identified did not result in the restatement of any previously reported consolidated financial statements or any other related financial disclosure, nor does management believe that it had any effect on the accuracy of the Company's financial statements for the current reporting period. CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING None. PART II - OTHER INFORMATION Item 1. Legal Proceedings. We are currently not a party to any pending legal proceedings and no such actions by, or to the best of our knowledge, against us have been threatened. Item 1A. Risk Factors IN ADDITION TO THE OTHER INFORMATION IN THIS REPORT, THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING OUR BUSINESS AND PROSPECTS, CONDITIONS EXIST WHICH CAUSE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN. Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred. If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company is common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution. Item 2. Unregistered Sales of 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 7 Item 5. Other Information. None Item 6. Exhibits. Exhibit Number Exhibit Title 31.1 Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. SIGNATURES In accordance with the requirements of Section Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Lansdowne Security, Inc. Date: November 18, 2010 By: /s/ David Roff ------------------------------------- David Roff President and Chief Executive Officer 8 --------------------------------------------------------------------------------

LANSDOWNE SECURITY, INC. 10-Q