ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
RESULTS OF OPERATIONS
Three Months Ended March 31, 2014 and 2013
Our net loss for the three months ended March 31, 2014 totalled $2,257. This compares with our net loss of $15,623 for the three months ended March 31, 2013. General and administrative expenses for the three months ended March 31, 2014 and 2013 were $15,370 and $39,030, respectively.
We incurred interest expense during the three months ended March 31, 2014 and 2013 were $6,756 and $5,310, respectively. The Company had revenues during the three months ended March 31, 2014 and 2013 were $19,869 and $13,275, respectively.
LIQUIDITY AND CAPITAL RESOURCES
If we are unsuccessful in obtaining financing and fail to achieve and sustain a profitable level of operations, we may be unable to fully implement our business plans or continue operations. Future financing through equity, debt or other sources could result in the dilution of Company equity, increase our liabilities, and/or restrict the future availability and use of cash resources. Additionally, there can be no assurance that adequate 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 obtain the additional financing on a timely basis, we will be unable to execute our business plans, and will be required to scale back the pace and magnitude of our oil and gas prospects drilling and development initiatives. We also may not be able to meet our vendor and service provider obligations as they become due. In such event, we will be forced to cease our operations.
FUTURE OPERATIONS
CASH REQUIREMENTS
During the twelve month period ending December 31, 2014, we project cash requirements of approximately $250,000 as we continue to restructure our activities.
Our estimated funding needs for the next twelve months are summarized below:
Estimated Funding Required During the Twelve Month Period Ending December 31, 2014
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|
|
|
|
Operating, general and
administrative costs
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$
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300,000
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Revenue
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|
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50,000
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TOTAL
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$
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250,000
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PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment over the next twelve months ending March 31, 2014.
In order to grow our new business the directors of the company have prepared the following business plan. The Company and its directors intend to execute this plan as soon as possible.
1. INTERNATIONAL MARKETING
The expansion of a corporation on the international spectrum is never a simple feat. At CTTA, the task begins with a thorough market study identifying the general and specific needs and requirements of a given region of the world regarding both public and private security training. Once the needs are identified, the market is approached and penetrated through the use of a winning combination of strategic partnerships, select sales agents, business development consultants and local public and private sector influential business liaisons. Whether obligatory by law or not, CTTA calls upon the assistance of local professionals in a region to help fully understand the realities of the markets we wish to enter.
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2. COURSE DEVELOPMENT AND CUSTOMIZATION
In order to increase business, the team at CTTA is constantly evaluating both local and international market needs and requirements through fieldwork and the physical analysis of actual and potential clients known to require services such as those we offer. In addition, by staying in tune with the current state of affairs around the world, the highly experienced team of trainers and pedagogy professionals are regularly developing new and better adapted programs to tailor to the issues being faced by industry professionals today. Whether it has to do with proper Use of Force according to modern day tolerances and regulations, or the precise tactics of specialized Intervention teams, our experts are up to date and constantly producing solutions that better protect both the officers and the public they serve.
3. MANAGEMENT DISCUSSION AND ANALYSIS
Developing a game plan for growth at CTTA during the next 12 to 24 months includes the exploration of evolving yet expanding local and international security markets. Due to the fact that our fields of expertise cover a wide range of both general and specific Law enforcement and Security training, the need for what we can bring to an industry in constant need of upgrades and advanced up-to-date techniques, is obvious.
The main challenge for CTTA arises because we will be venturing into unchartered waters regarding never before seen quantities of public and private security professionals, requiring internationally accepted training in the fields of Crowd Management, Riot Control, Crisis Intervention, Special Event Security Management, Physical Intervention and Defensive Tactics. Seeing that the needs involve a multitude of jurisdictions around the world, a second challenge becomes the adaptation of our intellectual property to the realities of a targeted region in terms of language, governmental laws and regulations, as well as social, religious and cultural tolerances.
Proper management of the projected growth will come through the extensive international experience of the board of directors and the administration team of CTTA. In addition, a Business Development division is being created involving top industry and parallel industry performers, who with the guidance of our new board of advisors including international players of different nationalities and cultural backgrounds will effectively approach our targeted markets with un-measureable success.
After an extensive study of global tendencies, although every area in our world has its basic and specific security needs, the markets that CTTA will be focussing on are the following;
A. BRAZIL
Security in Brazil will attain unprecedented levels of global importance due to the fact that this region of the world will be host to international events such as the Formula 1 race circuit, the 2014 World Cup soccer championships and the 2016 Olympic Games. CTTA will be working with Canadian government officials and local officials to encompass the specific training and management requirements presented to assist police, private security and military units in dealing with the increase in the need for public maintaining of order.
B. MIDDLE EAST (GULF)
In Tunisia, Egypt, Yemen, Bahrain, Syria a message to the world has already been sent, members of the population are taking to the streets in protest to voice their discontentment with government and the ruling class. The need for additional training in crowd control and effective intervention is clear. Improved security procedures stem from the adoption of both proven strategies and training, tailored to the specific realities of the environment in question.
CTTA has signed an MOU with a Kuwaiti partner projecting to begin training members of the National Police Force of Kuwait in the fall of 2011.. Negotiations are also underway for a similar project in Qatar.
C. CANADA AND USA
Although local activities involve the specialized training of security and law enforcement personnel in an apparently saturated market, the constant global evolution in the industry forces the need for improvement locally. In a nearly immeasurable global market involving Tens of Billions of dollars, be it in the fields of Counter-Piracy, Counter-Terrorism, Executive Protection, Preventative Patrol Techniques and/or Defensive Tactics, more than ever, North American Security and Law Enforcement Operatives are active around the world sharing their Knowledge and "Savoir Faire" with co-patriots as well as allied forces trying tO maintain peace and order.
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A number of recognized Law Enforcement and Correctional Training Academies have already begun adopting CTTA programs into their curriculum.
MARKET AND COMPETITON
INDUSTRY OVERVIEW
Economic instability, social conflicts, terrorism threats and crime are a big part of today's world. Therefore, police and private security forces, along with corporations and individuals have to face a lot of challenges when it comes to safety. Being well trained is often a major key in order to adequately face these challenges. Whether it is about learning new ways of doing things or practicing fundamentals skills, the private security and law enforcement training corporations are more and more solicited..
A very good side of our industry is, apart for firearm and some other specialized training, there are no training corporations either in Canada or United States that can be considered as THE school to go to. Although there are some big schools in the USA, it's a fragmented market and there are a lot of small training academies. Therefore, acquiring or partner up with other training corporations becomes an easy way of growing up.
CTTA FIELD OF EXPERTISE
CTTA offers various training programs for law enforcement, private security and civilians such as:
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TACTICAL TRAINING: Defensive Tactics, Pressure Points, Handcuffing, Baton, Firearms and more.
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BASIC TRAINING: Private security and investigation.
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SPECIALIZED TRAINING: Executive Protection, Airport Security, Port Facilities Security, Crowd Control, Counter Terrorism and more.
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CIVILIAN TRAINING: Corporate Safety Awareness, Street Survival and more.
Although CTTA is an international training academy, is primary market is North America. CTTA is composed by both American and Canadian directors and instructors, which gives a unique perspective for Law Enforcement training. United States is known to be very proactive with law enforcement training and Canada is known to be very strict with use of force and therefore, put prevention and de-escalation at first line. The synergy between the two countries gives amazing results and great training quality.
1. SECURITY MARKET ANALYSIS
Private law enforcement careers are rated among "the 30 best-paying fast-track careers".
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Ontario employs approximately 70,000 private law enforcement professionals, versus 25,000 public police officers.
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The US Bureau of Labor Statistics Reports Private Law Enforcement is projected to grow better than 20% by 2018.
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The US Bureau of Labor Statistics reports the average income of a private investigator -with training- at $60,390.
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Security directors, in the same report, average $77,000-$80,000 and security guards about $40,000.
LARGE INCREASE IN PRIVATE SECURITY PERSONNEL BETWEEN 2001 AND 2006
For many years, employment in the private security industry has exceeded that of public police officers (Chart 1). In 2006, this was the case for all provinces except Saskatchewan. There were about 102,000 private security personnel in Canada, compared to 68,000 police officers, representing about 3 private security personnel for every 2 police officers. Security guards made up 90% of private security personnel.
While the rate of both police officers and private security personnel per 100,000 population increased between 2001 and 2006, private security grew much faster, up 15% compared to 3% for police officers. The increase in private security personnel was due to the growth in the number of security guards.
Manitoba and Saskatchewan, which had the nation's highest crime rates, employed the most police per capita in 2006. Prince Edward Island and Newfoundland and Labrador, provinces with crime rates well below the national average, had the fewest number of police per capita.
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Quebec reported the most security guards per capita among the provinces, while Alberta and Ontario had the most private investigators per capita.
COMPETITION:
Canada
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There are several small security and tactical training academies in Quebec and Ontario especially, though few of them offer as many programs as CTTA does.
Ontario has the best growing potential in Canada and the training industry is not big enough to answer the needs. CTTA is planning to develop in Ontario this year.
United States
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There are a lot of security and tactical training academies in the USA.
There are some big names like Smith & Wesson Academy, Safariland Training Group and PPCT Management Systems to name a few, but the market is huge and still offers a lot of possibilities. Although often conservatives, Americans nowadays are more open to look for new training solutions.
GOVERNMENT REGULATIONS:
Canada
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Each province and one territory (Yukon) has regulations on place for the private security industry. In some of them, there are basic training requirements for the personnel. CTTA is currently working on to become a qualified academy to deliver that required training in Quebec and Ontario. As for the specialized training of law enforcement officers, there are many possibilities throughout Canada, but not in Quebec (provincial Police Act).
United States
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Each State has different standards to train peace and private security officers. CTTA is already operating with local partners both in the States of Louisiana and Florida and is looking to grow a lot in the USA in the next few years.
INTERNATIONAL MARKET:
There are a lot of possibilities worldwide. CTTA is already involved in projects development in the Middle East (Kuwait and Qatar) and in Brazil. Other countries have also showed their interest in CTTA.
GOING CONCERN
The accompanying financial statements have been prepared assuming we will continue as a going concern. We incurred a net loss of $2,257 for the three months ended March 31, 2014 and a net loss of $13,275 for the same period in 2013.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
There are no assurances that we will be able, over the next twelve months, to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings, bank financing or shareholder advances necessary to support Canadian Tactical Training Academy Inc.'s working capital requirements. To the extent that funds generated from operations and any private placements, public offerings or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to Canadian Tactical Training Academy Inc. If adequate working capital is not available, Canadian Tactical Training Academy Inc. may be required to cease its operations.
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The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These conditions raise substantial doubt about our ability to continue as a going concern. There are no definitive agreements or arrangements for future funding.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our balance sheet, the statements of operations and stockholders' equity, and the cash flows statements included elsewhere in this filing.