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OFFON

BLUE LINE PROTECTION GROUP, INC.

(BLPG)
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BLUE LINE PROTECTION : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION (form 10-K)

05/14/2021 | 03:38pm EDT

Certain statements set forth below under this caption constitute forward-looking statements. See "Forward-Looking Statements" preceding Item 1 of this Annual Report on Form 10-K for additional factors relating to such statements.

You should read the following discussion and analysis of financial condition and results of operations in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Report.



Results of Operations


Material changes in line items in our Statement of Operations for the year ended December 31, 2020 as compared to the same period last year, are discussed below:



                           Increase (I) or
Item                        Decrease (D)     Reason

Revenue                           I          Increased revenues from processing and
                                             transportation.

Cost of revenue                   D          Decrease due to guard services being
                                             eliminated.

Operating expenses                D          Reduced payroll and operating expenses
                                             as Company streamlined operations

Gain on lease                     I          Increase as lease terminated
termination

Gain on settlement of             I          Increase as accounts payable settled
accounts payable

Interest expense                  D          Decrease in interim borrowings.

Loss on derivate                  I          Additional convertible loans
securities




10






Capital Resources and Liquidity




Our material sources and <uses> of cash during the years ended December 31, 2020
and 2019 were:



                                                       2020           2019
                                                        $              $
        Cash provided by <used in> operations          463,254       (336,051 )
        Purchase of property, plant and equipment      (39,470 )      (86,602 )
        Loan payments                                 (248,147 )     (181,913 )
        Loan proceeds                                   24,000        633,817



As of December 31, 2019 the Company had closed its Service-Guards segment.



General


Our material capital commitments over the next five years are as follows:

On October 27, 2016 the Company sold its building located at 5765 Logan Street, Denver, Colorado to an unrelated third party for $1,400,000. The Company repaid the mortgage on the building in the amount of $677,681. After the sale, the Company leased the building from the purchaser of the property. The lease is for an initial term of ten years, with the Company having the option to extend the term of the lease for two additional five year periods. The lease requires rental payments of approximately $10,612 per month which increases 2% annually.



                     Future minimum lease payments:
                     2021                             30,388
                     2022 and thereafter               2,260
                     Total minimum lease payments   $ 88,712



See Notes 6 and 7 to the financial statements included as part of this report for information concerning our notes payable.

Other than as disclosed above, we do not anticipate any material capital requirements for the twelve months ending December 31, 2021.

Other than as disclosed elsewhere in this report, we do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.

Other than as disclosed in this Item 7, we do not know of any significant changes in our expected sources and uses of cash.

We do not have any commitments or arrangements from any person to provide us with any equity capital. During the next 12 months, we anticipate that we will incur approximately $1,835,000 of general and administrative expenses in order to execute our current business plan. We also plan to incur sales, marketing, research and development expenses during the next 12 months. We must obtain additional financing to continue our operations. We may not be able to obtain additional funding on terms that are favorable to us or at all. We may not be able to obtain sufficient funding to continue our operations, or if we do receive funding, to generate adequate revenues in the future or to operate profitably in the future. These conditions raise substantial doubt about our ability to continue as a going concern.



11






Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements.



Critical Accounting Policies


Management considers the following policies critical because they are both important to the portrayal of our financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters.

Accounts receivable. Accounts receivable are stated at the amount we expect to collect from outstanding balances and do not bear interest. We provide for probable uncollectible amounts through an allowance for doubtful accounts, if an allowance is deemed necessary. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable; however, changes in circumstances relating to accounts receivable may result in a requirement for additional allowances in the future. On a periodic basis, management evaluates its accounts receivable and determines the requirement for an allowance for doubtful accounts based on its assessment of the current and collectible status of individual accounts with past due balances over 90 days. Account balances are charged against the allowance after all collection efforts have been exhausted and the potential for recovery is considered remote.

Revenue recognition. As all of our Revenue is generated from services offerings, Revenue recognition is the same for each of our revenue streams. We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of its fees is reasonably assured.

Stock-based compensation. The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718, which requires the Company to recognize expenses related to the fair value of our employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. We recognize the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measureable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.



12






Significant Accounting Policies

See Note 2 to the financial statements included as part of this report for a description of our significant accounting policies.

Recent Accounting Pronouncements

From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our consolidated financial statements upon adoption.

To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included as part of this Report.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2020 4,13 M - -
Net income 2020 -0,93 M - -
Net Debt 2020 3,28 M - -
P/E ratio 2020 -0,86x
Yield 2020 -
Capitalization 5,68 M 5,68 M -
EV / Sales 2019 1,00x
EV / Sales 2020 0,99x
Nbr of Employees 65
Free-Float 99,5%
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Managers and Directors
Evan DeVoe President, CEO, CFO, Director & CAO
Christopher E. Galvin Chairman
Doyle Knudson Independent Director
Daniel L. Alen Director
Sector and Competitors
1st jan.Capi. (M$)
BLUE LINE PROTECTION GROUP, INC.0.00%6
SECOM CO., LTD.-12.79%15 868
SECURITAS AB8.63%6 106
PROSEGUR COMPAÑÍA DE SEGURIDAD, S.A.5.33%1 603
PROSEGUR CASH, S.A.-18.00%1 130
SIS LIMITED17.96%991