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OFFERING CIRCULAR

STRATEGIC GLOBAL INVESTMENTS, INC.

95,000,000 SHARES OF COMMON STOCK

MAXIMUM OFFERING: $2,900,000

Purchase Price: $        

 

 

Strategic Global Investments, Inc., a Delaware corporation (“Strategic” the “Company” or “we”), hereby offers (the “offering”) 95,000,000 shares (the “Shares”) of its common stock, par value $0.00001 per share, (“Common Stock”) at a purchase price of $         per Share, up to an aggregate purchase price of $2,900,000. If all of the Shares are sold, we will issue an additional 95,000,000 shares of Common Stock. The offering is being made on a “best efforts” basis. We will continue the offering until Shares with an aggregate sales price of $2,900,000 have been sold or until August     , 2016, whichever is earlier.

This Offering is being conducted on a “best-efforts” basis, which means that we, through our CEO, Andrew Fellner, will use its commercially reasonable best efforts in an attempt to sell the Shares. Mr. Fellner will not receive any commission or any other remuneration for these sales. In offering the Shares on our behalf, Mr. Fellner will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934.

The Shares will be offered for sale at a price of $         per Share. If all of the Shares are purchased, the gross proceeds to us will be $2,900,000. However, since the Offering is being conducted on a “best-efforts” basis, there is no minimum number of Shares that must be sold, meaning we will retain any proceeds from the sale of the Shares sold in this Offering. Accordingly, all funds raised in the Offering will become immediately available to us and may be used as they are accepted. Investors will not be entitled to a refund and could lose their entire investment. See “Securities Being Offered” beginning on page      of this Offering Circular.

Strategic is a development stage corporation engaged in building small luxury villas which will be sold primarily as timeshare units on land which it owns in the Punta Perfecta Beach area of Mexico. Proceeds from this offering will be used primarily to complete two (2) already started houses, to build additional houses and to market the houses as timeshare units. The mailing address of our offices is: 701 Palomar Airport Road, Suite 300, Carlsbad, California 92011, our telephone number is: 858-384-9628 and our website address is: www.strategicglobalinvestments.com.

We are a development stage company. Investing in our Common Stock involves a high degree of risk, including the risk that you could lose all of your investment. Please read “Risk Factors” beginning on page 4 of this Offering Circular about the risks you should consider before investing.


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     Price to
Public
     Commissions   

Proceeds

To Issuer

 

Per Share

   $ 0.0           N/A    $ 0.0       

Total (1)

   $ 2,900,0000       N/A    $ 2,900,000   

 

(1) Before deducting expenses of the Offering, which are estimated to be approximately $26,000.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.

Approximate date of proposed sale to the public: As soon as practicable after the effective date of this offering circular.

The date of this Offering Circular is August     , 2015.


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IMPORTANT NOTICES TO INVESTORS

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED OR APPROVED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THESE AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS OFFERING CIRCULAR AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US.

FOR CALIFORNIA RESIDENTS ONLY: THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS OFFERING HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF THE SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25000, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

FOR FLORIDA RESIDENTS ONLY: THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER § 517.061 OF THE FLORIDA SECURITIES ACT. THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

 

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TABLE OF CONTENTS

 

     Page  

Important Notices to Investors

     i   

Offering Circular Summary

     1   

Risk Factors

     4   

Plan of Distribution

     11   

Use of Proceeds

     11   

Dividend Policy

     12   

Cautionary Statement Concerning Forward Looking Statements

     12   

Business

     13   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     17   

Our Management

     20   

Securities Ownership of Certain Beneficial Owners and Management

     21   

Certain Relationships and Related Transactions

     21   

Market for and Dividends on Our Common Stock and Related Stockholder Matters

     21   

Description of Capital Stock

     23   

Certificate of Incorporation and Bylaws

     25   

Part F/S

     F-1   


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OFFERING CIRCULAR SUMMARY

This summary highlights information contained elsewhere in this Offering Circular. This summary is not complete and does not contain all of the information that you should consider before investing in the Shares.

You should carefully read the entire Offering Circular, especially concerning the risks associated with the investment in the Shares discussed under the “Risk Factors” section.

Unless we state otherwise, the terms “we”, “us”, “our”, “Company”, “management”, or similar terms collectively refer to Strategic Global Investments, Inc., a Delaware corporation.

Some of the statements in this Offering Circular are forward-looking statements. See the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Our Business

General

Strategic Global Investments, Inc. is a development stage company that was formed on as American Consolidated Laboratories, Inc. in Delaware on July 22, 2008. Andrew Fellner acquired the controlling interest in the Company in May 10, 2010, and we changed our name to Strategic Global Investments, Inc. on May 18, 2010. Our executive offices are located at 701 Palomar Airport Road, Suite 300, Carlsbad, CA 92011, (858) 384-9628. We are engaged in building small luxury villas in the Punta Perfecta Beach area of the East Cape of the Baja Peninsula, Mexico and selling timeshare units in them. We have a limited operating history and have generated limited revenue.

The Business Plan

We own approximately 10 acres of land in the Punta Perfecta Beach area of Mexico (the “Land”). We have two (2) partly completed houses on the Land and plan to build up to 17 more, as well as use some of it for common areas and infrastructure for the development (the “Project”). We have an onsite experienced construction manager, so we are acting as our own general contractor, which we believe will reduce our costs in finishing this development. The Project is near recreational activities, including excellent surfing, skin and scuba diving. For most people who live in California, Arizona, Utah and Nevada, it is a 2 or 3 hour flight to the international airport at San Jose de Cabo, Mexico. Also, people living in western Canada often vacation in this area during the winter.

We plan to sell timeshare units in the houses that we will build. Because it is almost impossible to get a mortgage to buy a house in Mexico, timeshares become a good alternative to buying a house that may only be occupied for part of the year. Also, the developer of a project, such as we are, can finance timeshares on a short-term basis. Assuming we have the capital to do this, we plan to offer timeshare financing to qualified buyers. We believe this will help sell units and will provide interest income to our company.

We believe that since we already own the land for our project which was acquired at very reasonable prices and because we are acting as our own construction manager, we can pay good wages to our day labors and skilled craftsman and still have a cost advantage over other developments in the area. We believe our fully-build costs for the houses will be approximately $200 to $225 per square foot.

 

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We plan to market our timeshare units in the area near the project and in the western United States and Canada. The market for timeshares in the Project area is recovering from the housing recession, and we think that this is an opportune time to begin selling timeshares.

The Offering

 

Issuer Strategic Global Investments, Inc., a Delaware corporation.
Security Offered Shares of Common Stock, par value $0.00001.
Price $         per Shares
Minimum Offering None.
Maximum Offering $2,900,000
Minimum Investment None
Offering Period The Offering commenced on August     , 2015 and will close upon the earlier of (1) the sale of Shares with an aggregate sales price of $2,900,000, or (2) August     , 2016. The Offering may be terminated at our election at any time.
Voting Rights Stockholders will have one vote per share for each Share owned by them in all matters, including the election of Directors, as provided in the Delaware Corporation law.
Dividends We have never paid a dividend on the shares of our Common Stock and do not plan to do so in the foreseeable future.
Use of Proceeds The net proceeds of this offering will be used primarily to build houses on the Land and market timeshare units in those houses. Expenses of the Offering are estimated to be approximately $26,000.
Trading of our Shares Shares of our Common Stock are traded on the OTC Pink Market.
Exchange Act Disclosure The Company is not required to provide disclosure pursuant to the Exchange Act.
Risk Factors An investment in the Company is highly speculative and involves substantial risks. Prospective Investors should carefully review and consider the factors described under the “Risk Factors” section below.

 

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We plan to qualify the offering for sale in California, Florida, New York and in such other states as we may determine from time to time. We may also offer or sell Shares in other states in reliance on exemptions from registration requirements of the laws of those states. However, we will not make any general solicitation or advertisement of this offering in any jurisdiction that this offering is not registered. This offering is being conducted on a “best-efforts” basis, which means that we, through our CEO Mr. Fellner, will attempt to sell the Shares to prospective investors without the use of an underwriter. We will not pay any commission or other remuneration to Mr. Fellner with respect to this Offering.

Corporate Information

We are a Delaware corporation. We have our offices at 701 Palomar Airport Road, Suite 300, Carlsbad, California 92011. Our telephone number is (760) 931-5658 and our email address is andy@wazillo.com.

 

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider each of the following risks and all of the information set forth in this offering circular before deciding to invest in our common stock. If any of the following risks and uncertainties develops into an actual event, our business, financial condition, results of operations and cash flows could be materially adversely affected. In that case, the price of our common stock could decline and you may lose all or part of your investment. In connection with the forward-looking cautionary statements that appear in this prospectus, you should also carefully review the cautionary statement referred to under “Cautionary Statement Concerning Forward Looking Statements.”

Risks Related to the Issuer

We lack experience in operating a real estate development and selling timeshare units

While our President, Andrew Fellner, has some experience in the real estate development business and we have an experienced construction manager in Los Cabos, Mexico, as a company we have never been involved in this business.

We have not generated any revenue or operating income to date from our proposed business

We are in the early stages of starting our real estate development project. To date have not finish building any houses or made no sales of any timeshare units, thus it is difficult to evaluate our current or future prospects. Companies in the early stages of developing their business model present substantial business and financial risks, not all of which can be anticipated, and as a result, they may suffer significant operating losses.

There is doubt about our ability to become a viable business, and we may need additional funding beyond this offering

We have incurred substantial losses in the last five years in attempting to develop an internet bases social media business, which we have now discontinued. Our capitalization has improved during that period, but it is not be sufficient to allow us to pursue our proposed new business plan. Further, there can be no assurance that our new business plan will be more successful than our previous one.

The funds to be raised by this offering are to be used develop the Land, complete the building of the two houses which are on the Land, begin building up to 17 additional houses there, build the needed infrastructure and market timeshare units in them. This offering will not raise enough money to complete the project, even if all of the Shares are sold. However, we have no way of knowing whether even that amount of money will ultimately be raised by this offering, even when combined with our existing assets. The success of our business plan depends on how quickly we can sell timeshare units and thus have additional funds to help with completing the Project. We have no present plans to raise additional capital after this offering is completed. However, if we determine after the completion of this offering that we need additional capital, there can be no assurance that we can raise the amount of capital then needed nor can we predict the costs of doing so nor is there any assurance that profitable operations or sufficient cash flows to carry out our business plan will occur in the future.

 

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Our stockholders will be largely dependent on a single business

For the immediately foreseeable future, our stockholders will be largely dependent for a return on their investment upon the performance of our business of building houses on the Land and selling timeshare units in them, and investors in our company should look solely to the development and growth of that business for any return on their investment in our company.

We cannot predict the future of the real estate market in Punta Perfecta Beach or the East Cape areas of, Mexico and so can’t predict the demand for our timeshare units

The real estate market in Mexico, generally, collapsed in 2008 in the wake of the real estate market in the United States, including the market in the area where the Land is located. We believe that in the last few months, that market has started to revive in the area around our Project, and as a result, vacation house building has resumed. However, there is no way to tell how strong the demand for vacation houses or timeshare units in the area where our Land is located will become or for how long the current strengthening of that market will continue. Thus, there can be no assurance that we can sell enough timeshare units to provide any return to investors in this offering.

We face competition from several very large developers

Our business success will be dependent on attracting customers who are willing to purchase our timeshare units in the Los Cabos area rather than those of another developer. Several of these developers are much larger than we are and have significantly greater resources than we do. This allows them to put more amenities in their developments and to build more luxurious houses than we can. It also allows them to do more advertising and to provide more financing options to potential buyers. Finally, several of these developers have other timeshare properties which are located in multiple locations in the United States and in various foreign countries. Purchasers of one timeshare unit in any of these properties have the potential to use their timeshare unit in an East Cape of Mexico property at any of these other properties. We have no other timeshare properties and so are at a disadvantage in this respect in marketing our timeshare units. There can be no assurance that we can overcome the competitive advantages that these large companies have over us. Our failure to do so will adversely affect our revenues and our financial performance.

Our success depends upon us attracting purchasers of our timeshare units

For us to grow our business, we will need to attract potential purchasers of our timeshare units, using our limited resources. We intend to focus our marketing efforts on people who are visiting in the Punta Perfecta Beach and East Cape areas and those who live in areas of the United States and Canada which are relatively close to Los Cabos. However, our potential purchasers will also be subject to the marketing efforts of other timeshare developers in the same area, as well as those in other warm weather vacation areas of the United States, Mexico and other countries. There can be no assurance that we can succeed in making our timeshare units appear more attractive to potential purchasers than those of other developers in the area where the Land is located or other geographic areas. Our failure to do this will adversely affect our revenues and our financial performance.

We are reliant on key individuals

We currently rely on the services of two individuals: Andrew Fellner and James Toner, our construction manager, neither of whom has entered into an employment agreement with us. Further, there can be no assurance that either of them will continue to be employed by us for any specific period

 

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of time. The departure of either of these key people may negatively affect our business unless suitable replacements for them can be found in a timely fashion. We have not purchased key man life insurance for either of these people. In addition, Mr. Fellner, who has served as our CEO since May, 2010, has not been paid a salary during that period, although we have accrued a salary of $20,000 per month for him since June, 2015. While the Board of Directors hopes to begin paying him a salary at some time and ultimately to pay him the accrued salary, our financial situation has prevented it from doing so to this point. If the Board does not begin to pay Mr. Fellner a salary at some time, it seems likely that he will seek employment elsewhere.

Governmental regulations, particularly in Mexico, may adversely affect our profitability

There may be changes in the federal, state or local Mexican governmental regulations or policies relating to real estate development and timeshare sales or in relation to taxation, which could have a material adverse effect on our activities and financial success. Also, there could be changes in the federal, state, provincial or local governmental regulations relating to the sale of timeshare units, in the case of United States governmental units, relating to taxation, which could have a material adverse effect on our activities and financial success.

Our revenues and operating results may fluctuate.

Our revenues and operating results may fluctuate from quarter-to-quarter and year-to-year and are likely to continue to vary due to a number of factors, many of which are not within our control. Thus, revenues and operating results for any future period are not predictable with any significant degree of certainty. For these reasons, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future performance.

Fluctuations in our operating results and financial condition may occur due to a number of factors, including, but not limited to, those listed below and those identified throughout this “Risk Factors” section:

 

    the degree of market acceptance of our timeshare units;

 

    availability of timeshare units offered by others;

 

    our response to price competition;

 

    delays between our building of houses on the Land and the generation of timeshare sales from those houses;

 

    changes in the amount we spend to promote our timeshare units;

 

    general economic conditions that affect the willingness of people to purchase timeshare units generally or in Mexico; and

 

    changes in accounting rules or tax laws.

Due to the foregoing factors, you should not rely on quarter-to-quarter or year-to-year comparisons of our operating results as an indicator of future performance.

We may not be able to generate operating profits.

Since our inception, we have not generated operating profits. In the event that we are unable to execute on our business plan, we may be unable to generate profits in the future.

 

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One of our principal stockholders will be able to exert substantial influence.

Andrew Fellner, our sole Director and President, Treasurer and Secretary, owns approximately 745,000 shares of our Common Stock. Mr. Fellner is our largest stockholder and is likely to be so after this offering. As a result, he will have a significant impact on the outcome of any corporate matter submitted to our stockholders for approval, including the election of directors and any transaction that might cause a change in control, such as a merger or acquisition. Any stockholders in favor of a matter that is opposed by Mr. Fellner could have a difficult time obtaining sufficient votes to outvote Mr. Fellner. See “Principal Stockholders.”

We rely on our information technology systems to manage numerous aspects of our business and customer and supplier relationships, and a disruption of these systems could adversely affect our results of operations.

We depend on our information technology, or “IT,” systems as a significant part of managing numerous aspects of our business and to provide analytical information to management. Our IT systems allow us to efficiently purchase products from our suppliers, provide procurement and logistic services, maintain cost-effective operations. Our IT systems are an essential component of our business and growth strategies, and a disruption to our IT systems could significantly limit our ability to manage and operate our business efficiently. These systems are vulnerable to, among other things, damage and interruption from power loss, including as a result of natural disasters, computer system and network failures, loss of telecommunication services, operator negligence, loss of data, security breaches and computer viruses. Any such disruption could adversely affect our results of operations.

We may not have adequate insurance for potential liabilities.

In the ordinary course of business, we may be subject to various claims, lawsuits and administrative proceedings seeking damages or other remedies arising out of our commercial operations. We maintain insurance to cover our potential exposure for most claims and losses. We also insure the houses we are building in Los Cabos from various risks, including weather and fire. However, our insurance coverage is subject to various exclusions, self-retentions and deductibles, may be inadequate or unavailable to protect us fully, and may be cancelled or otherwise terminated by the insurer. Furthermore, we face the following additional risks under our insurance coverage:

 

    we may not be able to continue to obtain insurance coverage on commercially reasonable terms, or at all;

 

    we may be faced with types of liabilities that are not covered under our insurance policies, such as environmental contamination or terrorist attacks, and that exceed any amounts what we may have reserved for such liabilities;

 

    the amount of any liabilities that we may face may exceed our policy limits and any amounts we may have reserved for such liabilities; and

 

    we may incur losses resulting from interruption of our business that may not be fully covered under our insurance policies.

Even a partially uninsured claim of significant size, if successful, could materially adversely affect our business, financial condition, results of operations and liquidity. However, even if we successfully defend ourselves against any such claim, we could be forced to spend a substantial amount of money in litigation expenses, our management could be required to spend valuable time in the defense against these claims and our reputation could suffer, any of which could adversely affect our results of operations.

 

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Our business operations in Mexico are subject to a number of potential problems

Business operations in a foreign country like Mexico are subject to certain problems in addition to those of a solely US based business. In particular, under the Mexican law, the Mexican government may seize land which is close to beaches and is owned by foreigners. We have no reason to believe that the Mexican government is planning to do this with respect to our Land, but there can be no assurance that it won’t decide to exercise its ability to do so at some time in the future.

In addition, there is a risk that fluctuations in the value of the Mexican currency in relationship to the US dollar may adversely affect the value of our income and assets in Mexico. Further, economic conditions in Mexico at any time may be significantly different from those in the US. To the extent that Mexico generally or the general area around our Land in particular suffer from an economic slow-down, it will adversely affect our ability to operate profitably not only in and of itself, but in comparison with the return that we might have been able to earn on the same amount of resources invested in the US. In addition, there are potential problems with staffing and managing foreign operations, and differences in laws and business practices in Mexico which may favor local competition. Any of these factors could materially adversely affect sales of our timeshare units, which would adversely affect our results of operations.

Risks Related to this Offering, the Securities Markets and Ownership of Our Common Stock

The shares of our Common Stock are subject to the Penny Stock Rules

Shares of our Common Stock are traded on the OTC Market Group (Pink), which may well make it difficult for a purchaser of them to sell all or a part of them when the purchaser wishes, or, if they can be sold, to get what the purchaser may consider to be an adequate price for them. The shares of our Common Stock are trading at prices which make them subject to the SEC’s “Penny Stock Rules” which may also limit the liquidity of the Shares or adversely affect the price at which they can be sold or both. See “Description of Securities” below.

We cannot assure you that the market for our common stock will continue at its current trading volume or that the market price of shares of our common stock will not decline following this offering.

In addition, we cannot predict the prices at which our Common Stock will trade. The offering price for the Shares being sold in this offering has been determined by us based largely on our perception of the amount of money which we need to raise at this time to grow our company. We cannot assure you that the offering price per share will bear any relationship to the market price at which our Common Stock may trade after this offering.

We have broad discretion as to the use of the net proceeds from this offering and may not use them effectively.

We cannot specify with certainty the particular uses to which we will put the net proceeds from this offering. Our management will have broad discretion in the application of the net proceeds, and we may use these proceeds in ways with which you may disagree or for purposes other than those contemplated at the time of the offering. The failure by our management to apply these funds effectively could have a material adverse effect on our business, financial condition and results of operation. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

 

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The market price of our common stock may fluctuate significantly.

The market price and liquidity of the market for shares of our Common Stock that will prevail in the market after this offering may be higher or lower than the price you pay and may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:

 

    significant volatility in the market price and trading volume of securities of companies in our sector, which is not necessarily related to the operating performance of these companies;

 

    the mix of services that we provide during any period;

 

    delays between our expenditures to develop and market our services and the generation of sales from those marketing efforts;

 

    changes in the amount that we spend to develop new services or businesses;

 

    changes in our expenditures to promote our services;

 

    announcements of acquisitions by us or one of our competitors;

 

    the general tendency towards volatility in the market prices of shares of companies that rely on technology and innovation;

 

    changes in regulatory policies or tax guidelines;

 

    changes or perceived changes in earnings or variations in operating results;

 

    any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts; and

 

    general economic trends and other external factors.

If equity research analysts do not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our shares, the price of our shares could decline.

The trading market for our shares will rely in part on the research and reports that equity research analysts publish about us and our business. We do not have control over these analysts, and we do not have commitments from them to write research reports about us. The price of our shares could decline if one or more equity research analysts downgrades our shares, issues other unfavorable commentary, or ceases publishing reports about us or our business.

Future sales of our shares could reduce the market price of our shares.

The price of our shares could decline if there are substantial sales of our common stock, particularly by our director, his affiliates or our executive officer, or when there is a large number of shares of our common stock available for sale. The perception in the public market that our stockholders might sell our shares could also depress the market price of our shares. If this occurs or continues it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

Raising additional capital by issuing securities may cause dilution to our stockholders.

We may need or desire to raise substantial additional capital in the future. Our future capital requirements will depend on many factors, including, among others:

 

    Our degree of success in establishing a timeshare units sale business;

 

    The costs of establishing sales and marketing capabilities for our timeshare units; and

 

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    The costs of financing unanticipated working capital requirements and responding to competitive pressures.

If we raise additional funds by issuing equity or convertible debt securities, we will reduce the percentage ownership of our then-existing stockholders, and the holders of those newly-issued equity or convertible debt securities may have rights, preferences, or privileges senior to those possessed by our then-existing stockholders. Additionally, future sales of a substantial number of shares of our common stock or other equity-related securities in the public market could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities. We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock.

We have never paid cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. Therefore, if our share price does not appreciate, our investors may not gain and could potentially lose on their investment in our shares.

We have never declared or paid cash dividends on our common stock, nor do we anticipate paying any cash dividends on our share capital, after this offering and in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our shares will be investors’ sole source of gain for the foreseeable future.

Provisions in our charter documents or Delaware law may inhibit a takeover, which could adversely affect the value of our common stock.

Our certificate of incorporation and bylaws will contain, and Delaware corporate law contains, provisions that could delay or prevent a change of control or changes in our management. These provisions will apply even if some of our stockholders consider the offer to be beneficial or favorable. If a change of control or change in management is delayed or prevented, the market price of our common stock could decline. See “Description of Capital Stock.”

In the past we have rescind stock sales in certain circumstances which may affect our ability to raise capital in the future.

In early 2013, we began the process of trying to raise $5 million under SEC Regulation A. During the next several months, we had three offering circulars offering shares of our Common Stock for sale qualified by the SEC, each at a lower offering price than the one before. We had to do this because soon after each of the first two offering circulars were qualified, the price of our Common Stock on the OTC Pink Market dropped below the offering price in the respective offering circulars, and we could not attract investors.

After the third offering circular was qualified in January, 2014 and we had had some success in selling shares of Common Stock, many of the purchasers of Common Stock under the previous offering circulars complained to us that they had been treated unfairly because they had paid significantly more per share for the shares they had bought than the price of the shares now being sold. We decided it was in our best interest to rescind the prior purchases of these investors, most of whom then invested at least as much in our shares under the third offering circular as they had under the first two offering circulars. Given that we had to raise money or go out of business, we felt it was more important to quickly raise as much money as possible under the third offering circular than to get into potentially distracting and expensive arguments with disgruntled investors.

 

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We believe our decision in each case was in the best interest of our company. We are not currently in the same financial situation, but if a similar situation obtains in the future, we may well make the same decision in similar circumstances. It is possible that our actions in this regard will make it harder for us to raise capital in the future.

PLAN OF DISTRIBUTION

The Shares to be offered in connection with this Offering shall be offered by the President of the Company through his contacts and word of mouth. The Company is not using a selling agent or finder in connection with this offering.

In order to subscribe to purchase the Shares, a prospective Investor must complete, sign and deliver a Subscription Agreement to the Company and wire funds for its subscription amount in accordance with the instructions included in the Subscription Agreement which accompanies this Offering Statement.

The Company reserves the right to reject any Investor’s subscription in whole or in part for any reason. If the offering terminates or if any prospective Investor’s subscription is rejected, all funds received from such Investors will be returned without interest or deduction.

This Offering is made only by means of this Offering Circular and prospective Investors must read and rely on the information provided in this Offering Circular in connection with their decision to invest in the Shares.

State Qualification and Suitability Standards

This Offering Circular does not constitute an offer to sell or the solicitation of an offer to purchase any Shares in any jurisdiction in which, or to any person to whom, it would be unlawful to do so. An investment in the Shares involves substantial risks and possible loss by Investors of their entire investment. See “Risk Factors.”

These Shares have not been qualified under the securities laws of any state or jurisdiction. We plan to qualify the Offering only in California, Florida and New York and with such other state securities regulatory bodies as we may determine from time to time. We may also offer or sell Shares in other states in reliance on exemptions from registration requirements of the laws of those states.

Some of our offerees may be broker-dealers registered with the SEC under the Exchange Act, who may be interested in reselling our Shares to others. If so, they will have to comply with the regulations of the SEC and FINRA relating to underwriters.

USE OF PROCEEDS

We estimate that our net proceeds from the sale of 95,000,000 Shares in this offering at an offering price of $0.     per Shares will be approximately $2,874,000 after deducting our estimated offering expenses of approximately $26,000, assuming all 95,000,000 Shares are sold.

 

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We intend to use the net proceeds of this offering primarily to complete the two houses which are already on the Land, begin building up to 17 additional houses, build infrastructure on the Land and market the houses as timeshare units. None of the proceeds will be used to compensate or otherwise make payments to our officers or directors or any of our subsidiaries, other than that we may repay up to $250,000 of the approximately $399,000 loan which we owe to Mr. Fellner.

In the event that any net proceeds are not immediately applied, we may temporarily hold them as cash, deposit them in banks or invest them in cash equivalents or securities.

DIVIDEND POLICY

We do not anticipate that we will declare or pay regular dividends on our common stock in the foreseeable future, as we generally intend to invest any future earnings in the development and growth of our business. Future dividends, if any, will be at the discretion of our Board of Directors and will depend on many factors, including general economic and business conditions, our strategic plans, our financial results and conditions, legal requirements, any contractual obligations or limitations, and other factors that our Board of Directors deems relevant.

CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

We are including the following discussion to inform you of some of the risks and uncertainties that can affect us.

This offering circular contains various statements, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, that are forward looking statements. The forward looking statements may include projections and estimates concerning the timing and success of specific projects and our future revenue, income and capital spending. Our forward looking statements are generally accompanied by words such as “may,” “will,” “expect,” “intend,” “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. The forward looking statements in this offering circular speak only as of the date of this offering circular; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to unduly rely on them. We have based these forward looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties include, but are not limited to, the following:

 

    our strategy, including the expansion and growth of our operations;

 

    the impact of loss of key management;

 

    sufficiency of funds for required capital expenditures, and working capital;

 

    the adequacy of sources of liquidity;

 

    liabilities under laws and regulations protecting the environment;

 

    the impact of governmental laws and regulations;

 

    operating hazards, war, terrorism and cancellation or unavailability of insurance coverage; and

 

    the effect of litigation and contingencies.

 

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These and other important factors, including those discussed under “Risk Factors” included elsewhere in this offering circular, may cause our actual results of operations to differ materially from any future results of operations expressed or implied by the forward looking statements contained in this offering circular. Before making a decision to purchase our common stock, you should carefully consider all of the factors identified in this offering circular that could cause actual results to differ from these forward looking statements.

You should rely only on the information contained or incorporated by reference in this offering circular. We have not authorized any other person to provide you with additional or different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information in this offering circular is accurate only as of the date on the front cover of this offering circular, regardless of the time of delivery of this offering circular or any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

BUSINESS

Our Company

We are a development stage company engaged in building houses on our property in Los Cabos, Mexico and selling timeshare units in those houses.

History

We were originally incorporated as American Consolidated Laboratories, Inc. in Delaware on July 22, 2008. Andrew Fellner acquired the controlling interest in the Company in May 10, 2010, and we changed our name to Strategic Global Investments, Inc. on May 18, 2010.

In June, 2010, we merged with Punta Perfecta S.A. de CV, a Mexican corporation, which owned approximately 10 acres of land in the Punta Perfecta Beach area of the East Cape area of Mexico. At that time, it was our intention to raise the capital necessary to build houses on this land and sell them as timeshare units. However, the market for timeshare units in Mexico was depressed, and as that condition continued with no end in sight, we determined it would be a mistake to proceed with our original business plan. As a result, we attempted to start a business which made available to businesses the ability to stream video and advertising to potential customers or the ability to develop their own video content using our facilities and store that content for showing later on our website. We have been unable to make that business profitable. In the meantime, the market for timeshare units in the Punta Perfect Beach area has significantly improved, and we have decided to return to our original business plan. This plan makes use of the Land, which we already own, and the development plans which we previously prepared, and thus, seems to us to be a much better use of those assets than selling them to a third party in their current condition.

Our Business

We own approximately 10 acres of land in the Punta Perfect Beach area of the East Cape area of Mexico (the “Land”). We believe that this area is an attractive area for vacationers. Many people feel that the Punta Perfect Beach has some of the best surfing breaks in the world, and as a result, it attracts many people who are interested in surfing. More generally, there are good beaches 1/8th of a mile from

 

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the Land, which is easily accessible by walking. These beaches provide good opportunities for various water sports, such as kayaking and wind sailing. Further, the Cabo Pulmo marine reserve, which is easily reached from Punta Perfecta, provides good skin and scuba diving opportunities in the Sea of Cortez. Visitors to the Punta Perfecta Beach area also engage in other outdoor activities, such as hiking and riding ATV’s. Finally, the town of San Jose del Cabo, which a population of approximately 75,000 and is 20 miles from the Land, provides ample shops, bars and restaurants.

We currently have one completed house of approximately 1,500 sq. ft., which is currently used by our employees and subcontractors working on the existing two houses which are on the Land. We plan to add an additional 1,000 sq. ft. of space to this house before market timeshare units in it. We also have a 5,500 sq. ft. house which is 65% completed. When it is completed, we plan to make this house as the showcase house for the Project, and to rent it or allow prospective buyers stay in it while other homes are under construction. Our houses will have views of the ocean and the mountains from most of the house. We also plan to build common areas, including a clubhouse, a pool and a festival area for use by the owners of our timeshare units, and to landscape the Project in keeping with the surrounding environment. The Project will be a gated community.

We are planning to eco-friendly, small luxury villas in the range of 2,300 sq. ft. to 2,800 sq. ft., which are intended for use by large families, groups of people or more than one family. We believe that there is a market for larger timeshare units for use by multi-generational family groups and for two or more families that want to vacation together. We believe this market is currently underserved by the existing timeshare units.

Because our target market is people who are used to quality housing, we are using high quality building materials and heavy duty construction techniques so that prospective buyers will be able to tell that the houses are built to last and that they will be able to withstand the storms or hurricanes that sometime occur in this area. In addition, we pay our workers, not only day laborers, but also skilled workers, above the average wage, so that we can build good quality houses. Finally, we have our own in-house general contractor, James Toner, who has been building commercial and residential units in the United States and Mexico for over 30 years. Using Mr. Toner as our general contractor allows us to eliminate the cost of hiring an outside general contractor and gives us an onsite supervisor that we trust who can help ensure the quality construction of our houses that we want.

Since we already own the land on which our houses will be built and since that land was purchased during a low point in the real estate market in Los Cabos and because the cost of our general contractor will be lower than the general contractor costs of most other developers in the area, we believe that we can price our timeshare units attractively to potential purchasers and still be profitable.

Our Challenge

We have yet to sell either a house or a timeshare unit at this project because the timeshare market in Mexico generally and the Los Cabos area specifically has been depressed, largely as a result of the 2007 housing recession in the United States and Mexico. We believe that this market is reviving and that we have an opportunity to profitably develop the land in Los Cabos which we already own as well as that on which we have an option to purchase. However, construction costs are higher in Los Cabos than in most of Mexico because most of the suppliers of the needed construction materials are approximately 1,100 miles away, which adds to our costs. Thus, to become profitable, we need to sell sufficient timeshare units at a high enough price to provide a profit while at the same time attracting purchasers and competing with the larger vacation home projects in the area.

 

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Our Business Strategy

The principle elements of our business strategy include:

 

    Focus on Building High Quality Houses Which Meet the Needs of Purchasers Who Want Larger Vacation Homes. We plan to build houses in the range of 2,300 sq. ft. to 2,800 sq. ft., as we believe this is an underserved part of the market. By having our own experienced general contractor on site and paying above average wages to our workers, we believe we can obtain the level of quality construction that we want. Although the cost of building materials is higher in the Punta Perfecta Beach area than in most of Mexico, we believe that our costs of materials and building are at least as good as those of other developers in the area, these costs will not affect our competitive price advantage.

 

    Attract Potential Purchasers of Timeshare Units. It is well known in the vacation timeshare industry that the best sources of potential purchasers of timeshare units are people who are vacationing in the area where the timeshare unit is located. If people are having a good time vacationing in a particular place, they are more likely than anyone to want to come back and, therefore, are receptive to hearing about timeshare opportunities. Further, most people who buy timeshare units want to see the building or house in which they will be staying. Thus, our primary marketing focus is on people who are visiting in the East Cape area of Mexico or who have visited in that area. We are also planning to market to people in the western United States and Canada who live within a 2 to 3 hour plane trip of the Project.

 

    Provide Purchasers With Quality Houses and Desirable Amenities. We aim to provide our purchasers with timeshare units in houses which have attractive bedrooms and living space which are large enough to meet their needs, a kitchen which has attractive modern appliances and work spaces, and multiple bathrooms that are modern and colorful. Our goal is for our purchasers to find our houses comfortable and functional for their needs. While we are not building an “all inclusive” resort, we are providing desirable amenities such as a clubhouse, a pool, a festival area and attractive landscaping. Our Project will also be a gated community.

 

    Keep Construction Costs Low While Building High Quality Houses. We believe having an in-house general contractor will be cheaper than hiring a third party general contractor. By paying workers a bit above the average wage, we believe that we can attract skilled workers, which in the long run will result in fewer construction problems and avoid “do over” repairs. We think that a philosophy of doing a good quality job in the first instance is the best way to build high quality houses at the lowest price.

 

    Keep Marketing Costs Low. We plan to market our timeshare units using 2 to 3 commission only sales people. The sales people will handle person to person sales of our timeshare units. While we will produce our own marketing materials, the printing and distribution of those materials will be done by independent contractors, whom we think will be more cost efficient than doing the work in-house.

 

    Acquire More Land in the Punta Perfecta Beach/East Cape Area. If we are successful in establishing our business of selling the timeshare units in the Project, and assuming we have the capital do to so, we plan to take advantage of suitable opportunities to acquire additional land in the Punta Perfecta Beach/East Cape area or other popular vacation areas in the Los Cabos area of Mexico, with the intention of continuing to build houses for the vacation timeshare market.

 

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    Finance Timeshare Unit Purchases. Mortgages are very difficult to obtain in Mexico, but developers, such as we are, are allowed to finance timeshare unit purchases on a short-term basis. If we have sufficient capital, we plan to provide such financing to qualified buyers. This will help increase sales of timeshare units and will provide some interest income to us.

Our Competitive Strengths

We believe that our competitive strengths include:

 

    Our Timeshare Units Will Be Cost Competitive. We believe that the construction costs of our houses will be between $200 and $225 per sq. ft. Since we bought the Land at an attractive price compared with current prices, we believe that we will able to offer our timeshares at a competitive price with that of other larger developers in the area.

 

    Our Timeshare Units Are In Tune With Current Trends In The Way People Vacation. We believe that as people are living longer, there is a growing demand for vacation opportunities that make it attractive for two or three generations of a family to vacation together. With various generations of families living often living at some distance from each other, a three generation vacation is often one of the few opportunities for all family members to be together. Our houses will be big enough to accommodate this desire, and they will be in a place with great scenery, lots of water sports, beaches, shopping, bars and restaurants, so that each family member can find things to do which will appeal to him or her. Likewise, we believe that as the number of retired people increases, couples who are friends will also want to vacation together, and that they will appreciate the space in our house as providing both couples with the ability to have some privacy as well as space and activities to share with their friends.

 

    Our Purchasers Will Be Able to “Exchange” Their Timeshare Units For Units At Other Vacation Spots Around the World. To increase the marketability of our timeshare units, once several houses are completed, we plan to join RCI which is a division of Wyndham Worldwide. It was founded in 1974 and is a large broker of timeshare trades and has evolved into travel clubs as well. We also plan to join Interval World so that our purchasers will be able to use more than one timeshare exchange company. Thus, purchasers of our timeshare units will be able to “exchange” their timeshare units for units in other timeshare properties all over the world. This will allow us to provide the flexibility of use which is provided by large corporations which sell timeshares that can be used in several timeshare developments which they own.

Marketing and Sales

We currently have one (1) person who is selling timeshare units for us on a commission basis in the Punta Perfecta Beach area. As houses are built, we plan hire up to 2 additional sales people to sell our timeshare units. Presently, we are only marketing our timeshare units in the Punta Perfecta Beach area. With the proceeds of this Offering, we hope to increase our marketing area to the western United States and Canada.

Employees

The Company currently employs two full-times people, one of whom acts as a security guard and maintenance man at the Project. We also have one part-time office staff person. We will hire workers

 

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to build our houses as we need them. We have had no trouble finding good workers in Punta Perfecta Beach area and do not expect to have trouble doing so in the future. Our relations with these workers have been good, and there have been no organizing activities at that site.

Customers

We have no established customers. We expect that purchasers of our timeshare units will only purchase one unit, so we do not plan on repeat purchasers. Thus, the loss of any one purchaser as a customer would not have a significantly adverse effect on our business.

Intellectual Property

The Company has no intellectual property which relates to our timeshare unit selling business.

Government Regulation

We have the needed permits from the local and federal governments in Mexico to build our Project. Although we do not anticipate any new regulations that would have any material effect on our business as currently conducted or as proposed to be conducted, there is no way to predict what changes there might be in the local or federal law in Mexico which could adversely affect our business. We do not anticipate having any material expenses relating to compliance with environmental laws of Mexico in the future. Likewise, we do not believe that the U.S. tax laws, or any other regulations, will materially adversely affect our business, but we cannot assure you that U.S. laws may not change in the future in a way which would adversely affect our business.

Research and Development

Research and development are not applicable activities for our business.

Properties

Our office, which is rented, is located at 701 Palomar Airport Road, Suite 300, Carlsbad, California 92011, and consists of approximately 300 sq. ft. in usable space. We believe that our office space and the Land is adequate for our present needs.

Legal Proceedings

We are not currently a party to any material legal proceedings. From time to time we may be involved in legal claims or proceedings that arise out of the ordinary course of business.

MANAGEMENTS’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this offering circular. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and uncertainties, including those described under “Cautionary Statements Regarding Forward Looking Statements” and “Risk Factors”. We assume no obligation to update any of these forward looking statements.

 

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Overview

We are a development stage company engaged in building up to 19 small luxury villas on the Land and selling timeshare units in those villas. As we are successful in this and we have sufficient capital, we plan to purchase additional land in the Punta Perfecta Beach/East Cape area of Mexico on which to build additional small luxury villas and sell them as timeshare units.

Business Strategy

Our business plan focuses on using the Land, which we already own, to build small luxury villas, of which we have two partially completed houses already on the Land. We have our own in-house general contractor and plan to hire local laborers and skilled workers as needed. The rate at which we will be able to build houses will depend upon the amount of capital we raise in the offering and how quickly we do so. We plan to market our timeshare units to people vacationing in the Punta Perfecta Beach/East Cape area of Mexico and to people living in the west coast area of the United States and Canada.

Outlook

We believe that the timeshare market in the Punta Perfecta Beach/East Cape area of Mexico is reviving after the real estate rescission of recent years, thus making this a good time to begin building timeshare housing and selling it. We expect that our costs of construction will be competitive with those of other developers in the area, thus allowing us to price our timeshare units competitively.

Our financial results for 2015 are dependent upon our ability to access funds for working capital, infrastructure on the Land and on going operating expenses. We expect to need additional capital after this offering is completed, depending on how quickly we can sell our timeshare units and the following external and internal factors:

 

    Continued Revival of the Timeshare Market. Our ability to sell timeshare units is dependent upon the continued revival of the timeshare market in the Punta Perfecta Beach/East Cape area of Mexico. We have no control over this matter.

 

    Attracting Timeshare Buyers. Not only must we attract sufficient interest from potential buyers of timeshare units, but we must compete with timeshare units offered by other developers in our area of Mexico. Among other things, this means that our houses must be attractive to and meet the perceived desires of potential timeshare purchasers. We believe that our designs for our houses will do that, but there can be no assurance that that is the case or that they will be good enough to attract sufficient buyers to makes us profitable.

Results of Operations

We made the decision to discontinue our social media and streaming media business and to focus of timeshare development of the Land in the last few months. Thus, our financial results for the last two years do not provide any guidance for the potential performance of our proposed business, as we have only recently begun work on completing the two partly completed houses on the Land and have had no sales of timeshare units and cannot predict when the first such sales will occur. Therefore, readers of our financial statements cannot use them to assess the potential profitability of our proposed business.

 

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Revenues

The Company did not generate significant revenues during the fiscal years 2013 or 2014. Our ability to do so in the future depends upon our ability to raise sufficient capital in this offering.

Cost of Sales. Our costs of sales consist primarily of the costs of constructing houses and selling expenses. We have no historical experience regarding the operating expenses for our plan to develop the Project on the Land. We currently estimate our costs of building our proposed houses to be between $200 and $225 sq.ft., but we have no historical experience to support that estimate.

Operating Expenses.

Operating expenses during the fiscal years 2013 and 2014 were driving largely by general and administrative expenses related to prior offerings of securities to raise capital to pursue our previous business plan relating to social media and streaming media. We plan on using commission sales agents to sell our timeshare units, so sales commission should relate to revenue. As we have sufficient capital, we plan to place ads for our timeshare units in appropriate media in our target market units. As we develop the Land, at some point, we will have to add additional employees to maintain the common areas and the property generally. However, there is no way to estimate when this will be or what the amount of that expense.

Gross Profit. Our gross profit (or loss) and gross margin are largely dependent on our construction costs.

Interest Expense

Our interest expense is related to the loan to our company from our Mr. Fellner, our President and CEO. The interest rate on that loan is 4% per annum.

Income Tax. We are subject to income and other taxes in the United States and Mexico at the prevailing corporate rate. However, in the United States we have sufficient net operating losses than we do not expect to pay income taxes for the immediate future.

Financial Condition, Liquidity and Capital Resources.

Our assets exceed our liabilities, however, we have no significant revenue and need to raise additional capital in this offering in order to pursue our proposed business plan in hopes of generating sufficient revenue to become profitable. Other than building completing the two partially built houses on the Land and building up to 17 more houses and infrastructure at the Project, we do not expect to make any significant capital investments. However, when we have sufficient capital, we expect to purchase additional land near our Project so that we can continue our timeshare selling business after we sell all of the units at the Project.

We do not plan to hire additional employees, other than on a on a contract labor basis.

 

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OUR MANAGEMENT

Our sole director is Andrew Fellner, who is also its Chief Executive Officer, Secretary and Treasurer. He has served in these capacities since May, 2010.

Mr. Fellner earned a B.S. Degree from San Diego State University with an emphasis in accounting. Thereafter, he had a tax practice in San Diego, California for many years in which he represented mainly small to medium size business. Mr. Fellner also earned a Jurist Doctorate degree from Thomas Jefferson School of Law, San Diego, California and practiced law for several years, prior to opening a real estate office in San Diego and beginning his development career. He subsequently developed several real estate projects in California and Mexico.

In 1994, Mr. Fellner founded and was the CEO of Only MultiMedia Inc., which was an internet ISP business that permitted customers to use its servers and modems to connect with the Internet. That company also created a website called Castnet.com that allowed actors, singers and other professionals to submit head shots and live video feeds from which Hollywood casting directors, producers and other professionals were able to cast them for various TV, movie and other entertainment spots. The company was taken public, subsequently changed its name to Castnet.com and was acquired by The Entertainment Internet, Inc.

Compensation of Officers and Directors

 

Name   

Capacities in which

compensation was received

   Cash
compensation
     Other
compensation
     Total
compensation
 

Andrew Fellner

   President and CEO    $ 0       $ 10,800       $ 10,800   

Mr. Fellner is our only Executive Officer and sole Director.

The above table is presented on a cash basis.

Mr. Fellner has not been paid a salary for his services since he purchased control of the Company in 2010, however, we do pay $400 per month for his health insurance and the costs of operating his automobile, which in 2014 amount to $6,000. In years prior to 2014, we also paid $500 per month for a car for his use. In 2014, we bought him a car for $37,000 and reduced the amount of his loan to us.

We have been accruing a salary of $20,000 per month for Mr. Fellner since January 1, 2013, although we have never paid it. The amount of the accrual is currently $600,000. The Board of Directors intends to begin paying Mr. Fellner a salary at such time as it determines that we are able to financially do so. The Board has a target salary for Mr. Fellner of $240,000 per year, but may begin paying him a smaller salary at some time based on the financial situation of the Company at the time the decision is made. We intend to pay Mr. Fellner up to $250,000 of his accrued salary out of the proceeds of this Offering based on our financial condition from time to time, as determined by the Board of Directors.

Because of our small size, we do not have any Directors other than Mr. Fellner. Therefore, we do not have a Compensation Committee, and Mr. Fellner can set his own compensation as an officer of our Company.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS

The following table sets forth information as of June 30, 2015, regarding the beneficial ownership of shares of our Common Stock by our sole director, by our only executive officers, and by our current director and executive officer as a group and by each person known to us to own 5% or more of our outstanding shares. Except as otherwise noted in the footnotes below, each person below has sole voting and investment power with respect to such securities.

 

Name

   Number of Shares Beneficially Owned      Percentage of Class  

Andrew T. Fellner*

     745,010         16.44   

 

* CEO, Secretary, Treasurer and Sole Director

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Since becoming our CEO in May, 2010, Mr. Fellner has loaned the Company approximately $357,044 as a demand loan, which is currently accruing interest at a rate of 4%. The current balance of the loan is approximately $399,000 and is payable to Mr. Fellner upon demand. We may borrow additional sums from Mr. Fellner at some time in the future.

On June 1, 2010, the Company issued 55,000,000 shares of Common Stock to Mr. Fellner and James Toner as consideration for the Company’s acquisition of Punta. Based on the appraised value of the land owned by Punta, Mr. Fellner’s interest in that company was worth $3,550,000 and Mr. Toner’s interest was worth $1,450,000.

On January 17, 2014, Mr. Fellner acquired 750,000,000,000 shares of Common Stock in consideration for his forgoing any claims for salary from May, 2010 to December 31, 2012. Also, in December, 2014, Mr. Fellner sold his 2,400,000 shares of Class A Preferred Stock, which has super voting rights, back to the Company by increasing the amount of his loan to us by $107,000 which is the amount that he paid for those shares.

MARKET FOR AND DIVIDENDS ON OUR COMMON STOCK

AND RELATED STOCKHOLDER MATTERS

Market Information

The principal market for shares of the Company’s Common Stock is the OTC Markets Group. OTC Markets Group is not an exchange or an automated quotation system operated by a registered securities system.

As of June 30, 2015, an aggregate of 4,530,305 shares of our common stock were issued and outstanding and were owned by approximately 430 holders of record, based on information provided by our transfer agent.

Penny Stock Considerations

Our shares are “penny stocks”, which term is generally defined under the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares are thus subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock, such as shares of our Common Stock.

 

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Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000, or annual income exceeding $100,000 individually or $400,340 together with his or her spouse, is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:

 

    Deliver, prior to any transaction involving a penny stock, a disclosure schedule in the form prescribed by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;

 

    Disclose the commissions payable to the broker-dealer and its registered representatives and the current bid and offer quotations for the securities;

 

    Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and

 

    Make a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.

Because of these regulations, broker-dealers may encounter difficulties in their attempts to sell shares of our common stock, which may affect the ability of stockholders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements may impede the sale of shares of our Common Stock. In addition, these rules mean that the liquidity of our shares may be adversely affected, with a corresponding decrease in the available price of our shares.

Dividends

We have never paid a dividend and have no present intention of doing so. To the extent we have any income, we intend to reinvest it in the business. The decision to pay a dividend on the Common Stock and if so, when and in what amount will be made by the Board of Directors

Securities Authorized for Issuance Under Equity Compensation Plans

On July 11, 2011, the Board of Directors adopted the 2011 Equity Compensation Plan (the “Plan”) in accordance with Securities and Exchange Commission Rule 701. The Plan provides for the issuance of shares of Common Stock to employees, directors, officers and consultants with the purpose of providing equity compensation to those persons in lieu of cash compensation. Under the Plan, the Company is limited to issuing in any 12-month period an aggregate of number shares of Common Stock not greater than (a) $1,000,000 in value; (b) 15% of the total assets of the Company, measured at the Company’s most recent balance sheet; or (c) 15% of the outstanding amount of Common Stock, measured off the Company’s latest share ledger. As of September 30, 2012, there have been 1,600,000 shares issued to five consultants under the Plan. The Plan has not been approved by the Company’s stockholders. No options, warrants or rights are issuable under the Plan.

 

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DESCRIPTION OF CAPITAL STOCK

This description is a summary only and is subject to the complete text of our certificate of incorporation and bylaws, forms of which we have filed as exhibits to this Offering Circular.

As a result of a reverse stock split which occurred on June 1, 2015, our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share.

Common Stock

Each share of Common Stock entitles the holder to one vote on all matters on which holders are permitted to vote, including the election of directors. They do not have cumulative voting rights. Accordingly, holders of a majority of shares entitled to vote in an election of directors are able to elect all of the directors standing for election.

Subject to preferences that may be applicable to any outstanding preferred stock, the holders of the Common Stock will share equally on a per share basis any dividends when, as and if declared by the Board of Directors out of funds legally available for that purpose. If we are liquidated, dissolved or wound up, the holders of our Common Stock will be entitled to a ratable share of any distribution to stockholders, after satisfaction of all of our liabilities and of the prior rights of any outstanding class of our preferred stock. Our Common Stock carries no preemptive or other subscription rights to purchase shares of our stock and is not convertible, redeemable or assessable.

Preferred Stock

Our Board of Directors has the authority, without stockholder approval, to issue shares of preferred stock from time to time in one or more series and to fix the number of shares and terms of each such series. The Board may determine the designation and other terms of each series, including, among others:

 

    dividend rates;

 

    whether dividends will be cumulative or non-cumulative;

 

    redemption rights;

 

    liquidation rights;

 

    sinking fund provisions;

 

    conversion or exchange rights; and

 

    voting rights.

The issuance of preferred stock, while providing us with flexibility in connection with possible acquisitions and other corporate purposes, could reduce the relative voting power of holders of our common stock. It could also affect the likelihood that holders of our common stock will receive dividend payments and payments upon liquidation.

The issuance of shares of capital stock, or the issuance of rights to purchase shares of capital stock, could be used to discourage an attempt to obtain control of our company. For example, if, in the exercise of its fiduciary obligations, our Board of Directors determined that a takeover proposal was not

 

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in the best interest of our stockholders, the Board could authorize the issuance of preferred stock or Common Stock without stockholder approval. The shares could be issued in one or more transactions that might prevent or make the completion of the change of control transaction more difficult or costly by:

 

    diluting the voting or other rights of the proposed acquirer or insurgent stockholder group;

 

    creating a substantial voting bloc in institutional or other hands that might undertake to support the position of the incumbent board; or

 

    effecting an acquisition that might complicate or preclude the takeover.

In this regard, our certificate of incorporation grants our Board of Directors broad power to establish the rights and preferences of the authorized and unissued preferred stock. Our Board could establish one or more series of preferred stock that entitle holders to:

 

    vote separately as a class on any proposed merger or consolidation;

 

    cast a proportionately larger vote together with our common stock on any transaction or for all purposes;

 

    elect directors having terms of office or voting rights greater than those of other directors;

 

    convert preferred stock into a greater number of shares of our common stock or other securities;

 

    demand redemption at a specified price under prescribed circumstances related to a change of control of our company; or

 

    exercise other rights designed to impede a takeover.

Alternatively, a change of control transaction deemed by the board to be in the best interest of our stockholders could be facilitated by issuing a series of preferred stock having sufficient voting rights to provide a required percentage vote of the stockholders.

Class A Preferred Stock

Our Board of Directors has created a class of preferred stock designated as the Class A Preferred Stock (“Class A Shares”). Class A Shares have 150 votes per share on all matters on which Stockholders can vote, including the election of directors. Class A Shares have a preference in any liquidation of our Company of $.05 per share, which is paid before any distribution will be made to shares of Common Stock. Class A Shares do not have a fixed dividend, but can be receive dividends at any time dividends are paid to shares of Common Stock, provided the Board of Directors declares a dividend on the Class A Shares and provided that the dividend per share on Class A Shares cannot exceed the dividend per share paid at the same time on shares of Common Stock. Class A Shares carry no preemptive or other subscription rights to purchase shares of our stock and are not convertible, redeemable or assessable. There are no shares of Class A Preferred Stock outstanding.

 

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CERTIFICATE OF INCORPORATION AND BYLAWS

Election and Removal of Directors

Our Board of Directors consists of between one and nine directors. There is currently one director, the exact number of directors is fixed by the Board, and there will be one director until the director or stockholders, by majority vote, increase the number of directors. The director may be removed for cause by the stockholders, at a special meeting called for that purposes, by an affirmative vote of shares representing a majority of the shares then entitled to vote at an election of directors. Any vacancy occurring on the board of directors and any newly created directorship may be filled by majority vote of the stockholders or directors in office.

Stockholder Meetings

Our bylaws provide that special meetings of our stockholders may be called only by a majority of the directors, or such persons authorized by the Board of Directors.

Stockholder Action by Written Consent

Our bylaws provide that holders of our common stock are able to act by written consent without a meeting, as provided in the General Corporation Law of the State of Delaware.

Amendment of Certificate of Incorporation

The affirmative vote of at least a majority of the voting power of our outstanding shares of stock will be required to amend our certificate of incorporation.

Amendment of Bylaws

Our bylaws may generally be altered, amended or repealed, and new bylaws adopted with:

 

    The affirmative vote of a majority of directors present at any regular or special meeting of the Board of Directors called for that purpose; or

 

    The affirmative vote of a majority of the voting power of our outstanding shares o voting stock.

Limitation of Liability of Directors and Officers

Our bylaws provide that no director will be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as director, except as required by applicable laws, as in effect from time to time. Currently, Delaware law required that liability be imposed for the following:

 

    Any breach of the director’s duty of loyalty to our company or our stockholders;

 

    Any act or omission not in good faith or which involved intentional misconduct or a knowing violation of law;

 

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    Unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the General Corporation Law of the State of Delaware; and

 

    Any transaction from which the director derived an improper personal benefit.

As a result, neither we nor our stockholders have the right, through stockholders’ derivative suits on our behalf, to recover monetary damages against a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior, except in the situations described above.

Our certificate of incorporation and bylaws provide that, to the fullest extent permitted by law, we may, if so authorized on a case by case basis by majority vote of the board of directors, indemnify any officer or director of our company against all damages, claims and liabilities arising out of the fact that the person is or was our director or officer, or served any other enterprise at our request as a director, officer, employee, agent or fiduciary. We will reimburse the expenses, including attorneys’ fees, incurred by a person indemnified by this provision when we received an undertaking to repay such amounts if it is ultimately determined that the person is entitled to be indemnified by us. Amending this provision will not reduce our indemnification obligations relating to actions taken before an amendment.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is ClearTrust, LLC.

 

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PART F/S

In the opinion of management, the financial statements for the interim period ended June 30, 2014 included herein include all necessary adjustments for a fair statement of results for that period. All adjustments are of a normal recurring nature.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2014

 

Consolidated Balance Sheet as of December 31, 2014 and 2013

  F-2   

Consolidated Statements of Operations for years ended December 31, 2014 and 2013

  F-3   

Consolidated Statements of Stockholders’ Equity for years ended December 31, 2014 and 2013

  F-4   

Consolidated Statements of Cash Flows for years ended December 31, 2014 and 2013

  F-6   

Notes to Consolidated Financial Statement

  F-7-F-19   

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

CONSOLIDATED BALANCE SHEET

Unaudited

 

     December 31,
2014
    December 31,
2013
(Restated)
 

ASSETS

    

Current Assets:

    

Cash and Cash Equivalents

   $ 109,490      $ 8,694   

Accounts Receivable

     —          —     
  

 

 

   

 

 

 

Total Current Assets

  109,490      8,694   

PROPERTY AND EQUIPMENT, net

  308,406      276,114   

Other Assets:

Notes Receivable

  1,419,600   

Investments-Stock Holdings

  9,618   

Intangible Assets-Net of Amortization

  8,000      8,000   

Land

  200,000      200,000   

Construction In Progress

  256,006      256,006   
  

 

 

   

 

 

 

Total Other Assets

  1,891,724      464,006   
  

 

 

   

 

 

 

TOTAL ASSETS

$ 2,309,620    $ 748,814   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts Payable

$ 17,530    $ 35,737   

Due to Related Party

  249,405      468,000   
  

 

 

   

 

 

 

Total Current Liabilities

  266,935      503,737   
  

 

 

   

 

 

 

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY

Preferred stock, $.0001 par value;10,000,000 shares authorized, 2,140,000 and 2,140,000 outstanding at

  2,101      2,101   

December 31, 2014 and 2013 (respectively)

Common stock,$.00001 par value;100,000,000,000 shares authorized; 39,800,341,754 Issued and outstanding and 1,000,000,000 shares authorized and 212,341,754 shares issued and outstanding at December 31, 2014 and 2013 (respectively)

  3,981,235      21,234   

Additional Paid in Capital

  1,492,123      2,363,786   

Accumulated Deficit

  (3,432,774   (2,142,044
  

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

  2,042,685      245,077   
  

 

 

   

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS EQUITY

$ 2,309,620    $ 748,814   
  

 

 

   

 

 

 

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

STATEMENT OF OPERATIONS

Unaudited

 

     December 31,  
     2014     2013  

Revenue

   $ 30,450      $ 8,448   

Cost of Sales

     17,200        2,695   
  

 

 

   

 

 

 

Gross Profit

  13,250      5,753   

Selling, General and Administrative Expenses

  1,134,615      991,264   
  

 

 

   

 

 

 

Loss from Operations

  (1,121,365   (985,511

Other Income (Expense)

Discontinued Operations

  (85,100

Interest Expense

  (84,309   (57,100

Interest Income

  44      2,846   
  

 

 

   

 

 

 

Total Other Income (Expense)

  (169,365   (54,254
  

 

 

   

 

 

 

Loss Before Income Taxes

  (1,290,730   (1,039,765

Income Tax Benefit

  —        —     
  

 

 

   

 

 

 

Net Loss

  (1,290,730   (1,039,765
  

 

 

   

 

 

 

Loss Per Share-Basic and Diluted

$ (0.00 $ (0.01
  

 

 

   

 

 

 

Weighted Average Common Shares

Outstanding -Basic and Diluted

  19,945,879,332      135,787,543   
  

 

 

   

 

 

 

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

 

     Common Stock      Stockholders’
Additional Paid
in Capital
    Accumulated
Deficit
    (Deficiency)
Equity
 
     Amount      Shares      Amount         

Balance - December 31, 2009

     0       $ 0         0       $ 0       $ 502,512      $ (63,431   $ 439,081   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Issuance of common stock for reverse acquisition

  0      0      55,100,000      5,510      26,636      —        32,146   

Issuance of common stock for cash proceeds

  0      0      11,958,093      1,196      99,804      101,000   

Issuance of common stock for recapitalization after reverse acquisition

  0      0      1,835,968      184      (79,111   78,931      4   

Net loss

  —        (92,628   (92,628
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balance - December 31, 2010

  0    $ 0      68,894,061    $ 6,890    $ 549,841    $ (77,128 $ 479,603   

Stock issued for services to consultants and employees

  0      0      1,300,000      130      64,870      —        65,000   

Stock issued for acquisitions

  0      0      1,079,592      108      49,392      49,500   

Issuance of common stock for cash proceeds

  —        0      7,593,027      759      345,091      —        345,850   

Net loss

  —        (643,567   (643,567
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balance - December 31, 2011

  0    $ 0      78,866,680    $ 7,887    $ 1,009,194    $ (720,695 $ 296,386   

Stock issued for services to consultants and employees

  0      0      300,000      30      14,430      —        14,460   

Issuance of common stock for cash proceeds

  —        0      4,031,000      403      159,273      —        159,676   

 

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Net loss

  —        (381,584   (381,584
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balance - December 31, 2012

  0    $ 0      83,197,680    $ 8,320    $ 1,182,897    $ (1,102,279 $ 88,938   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Stock issued for fixed assets acquired

  5,000,000      500      199,500      200,000   

Stock issued for services to consultants and employees

 

0

  

  0      68,736,667      6,874      574,802      —        581,676   

Conversion of related note payable to preferred stock

  2,100,000      2,101      207,899      210,000   

Cancellation of note payable

  1,250,000      125      49,875      50,000   

Issuance of common stock for cash proceeds

  —        0      42,157,407      5,416      148,812      —        154,228   

Net Loss

  (1,039,765   (1,039,765
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balance - December 31, 2013

  2,100,000    $ 2,101      200,341,754    $ 21,235    $ 2,363,785    $ (2,142,044 $ 245,077   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Conversion of related note payable to common stock

  7,500,000,000      750,000      (750,000   —     

Stock issued for services to consultants and employees

  1,350,000,000      135,000      —        135,000   

Issuance of common stock for cash proceeds-net of costs

  —        0      30,750,000,000      3,075,000      (121,662   —        2,953,338   

Net Loss

  (1,369,442   (1,369,442
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Balance - December 31, 2014

  2,100,000    $ 2,101      39,800,341,754    $ 3,981,235    $ 1,492,123    $ (3,511,486 $ 1,963,973   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

Unaudited

 

     Year Ended
December 31,
2014
    Year Ended
December 31,
2013
 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net loss

   $ (1,290,730   $ (1,039,765

Adjustments to reconcile net loss to net cash used in operating activities:

    

Stock issued for services

     135,000        581673   

Depreciation and amortization expense

     7,500        6,000   

Changes in operating assets and liabilities:

    

Decrease (Increase) in assets:

    

Accounts receivable

     —          9,889   

Increase (Decrease) in liabilities:

    

Accounts payable and accrued expenses

     (18,207     (37,887

Sales of property net of notes payable

     —          —     
  

 

 

   

 

 

 

Net Cash Used In Operating Activities

  (1,166,437   (480,090
  

 

 

   

 

 

 

Cash Flows from Investing Activities

Investment in subsidiary

  —        —     

Fixed Assets Purchased

  (130,689   (130,689
  

 

 

   

 

 

 

Net Cash( Used In) Provided by Investing Activities

  (130,689   (130,689
  

 

 

   

 

 

 

Cash Flows from Financing Activities

Investments-Purchased

  (9,618

Proceeds from issuance of stock

  2,953,338      156,228   

Proceeds from notes payable

  —        457,404   

Notes Receivable

  (1,419,600

Notes Payable-converted to common stock

  (126,198   (50,000
  

 

 

   

 

 

 

Net Cash Provided by (Used In) Financing Activities

  1,397,922      563,632   

NET DECREASE IN CASH AND CASH EQUIVALENTS

  100,796      (47,147

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

  8,694      55,841   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

$ 109,490    $ 8,694   
  

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

INFORMATION:

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:

Interest paid during the period

$ 84,309    $ 15,001   
  

 

 

   

 

 

 

Income taxes paid during the period

$ —      $ —     
  

 

 

   

 

 

 

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - SUMMARY OF COMPANY BUSINESS

Organization

The Company Strategic Global Investments, Inc. is a Delaware chartered corporation, which conducts business from its headquarters in San Diego, CA. It was formed on December 11, 1985 as a Florida chartered corporation. On August 26, 2008, the Company was reincorporated under the laws of the State of Delaware. On May 17, 2010, the Company changed its name from American Consolidated Laboratories, Inc. to Strategic Global Investments, Inc.

On June 1, 2010, the Company entered into an agreement and plan of merger to acquire 99% of the issued and outstanding equity shares of Punta Perfecta S.A. de C.V, a Mexican corporation which owns the Punta Perfecta project in Baja. As part of the reverse acquisition Punta Perfecta was renamed Strategic Global Investments, Inc.

On January 1, 2011, the Company purchased all of the issued and outstanding shares of Wazuu, Inc., a Florida corporation, in exchange for 800,000 shares of its common stock.

On February 21, 2011, the Company purchased certain assets of 3D Live, Inc., a Minnesota corporation, for 750,000 shares of its common stock.

On March 18, 2013, 5,000,000 shares were sold to Tuvozonline for substantially all of its assets, including computer equipment, office equipment, advertising material, client lists and Gateways to countries in Europe and Asia.

In February 2014, the Company purchased Bearpot, Inc., a Colorado corporation, which proposed to grow and sell marijuana in the state of Colorado for $50,000 in cash.

Restatements

The Company made certain stock sales during the year that were subsequently rescinded. These sales were for cash and/or notes receivable. Rescinded sales are treated as if they had not occurred. As a result, the financial statements for the year ended December 31, 2013 have been restated to reduce the number of shares outstanding on the Balance Sheet and the amount of the Notes Receivable line item to reflect the rescission of the stock sales. Also, the Statement of Stockholders Equity has been restated to reflect fewer stock sales and, as a result, fewer shares of stock outstanding, and the Statement of Cash Flows has been restated to reflect the reduction in cash proceeds from the sale of stock. The number of shares outstanding was reduced by 17,000,000 shares, and the amount of notes receivable and additional paid in capital was reduced by $660,000

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company made certain stock sales during the year ended December 31, 2013 that were subsequently rescinded. These sales were for cash and/or notes receivable. Rescinded sales are treated as if they had not occurred. As a result, the financial statements for the year ended December 31, 2013 have been restated to reduce the number of shares outstanding on the Balance Sheet and the amount of the Notes Receivable line item to reflect the rescission of the stock sales. Also, the Statement of Stockholders Equity has been restated to reflect fewer stock sales and, as a result, fewer shares of stock outstanding, and the Statement of Cash Flows has been restated to reflect the reduction in cash proceeds from the sale of stock. The number of shares outstanding was reduced by 17,000,000 shares, and the amount of notes receivable and additional paid in capital was reduced by $660,000.

NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s financial position and operating results raise substantial doubt about the Company’s ability to continue as a going concern, as reflected by the net loss of $2,142,044 accumulated through December 31, 2014. The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is currently seeking additional capital to allow it to continue to develop and grow its online business operations

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows:

Use of Estimates

The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the condensed financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of condensed financial statements; accordingly, actual results could differ from these estimates.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of year ended or less to be cash equivalents. Cash equivalents include cash on hand and cash in the bank.

Property and Equipment

Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.

The range of estimated useful lives used to calculate depreciation for principal items of property and equipment are as follow:

 

Asset Category

   Depreciation / Amortization Period

Furniture and Fixture 3 years

   3 Years

Office equipment 3 years

   3 Years

Leasehold improvements 5 years

   5 Years

Property Evaluations

Management of the Company will periodically review the net carrying value of its properties on a property-by-property basis. These reviews will consider the net realizable value of each property to determine whether a permanent impairment in value has occurred and the need for any asset write-down. An impairment loss will be recognized when the estimated future cash flows (undiscounted and without interest) expected to result from the use of an asset are less than the carrying amount of the asset. Measurement of an impairment loss will be based on the estimated fair value of the asset if the asset is expected to be held and used.

Although management will make its best estimate of the factors that affect net realizable value based on current conditions, it is reasonably possible that changes could occur in the near term which could adversely affect management’s estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Asset retirement obligations

The Company plans to recognize liabilities for statutory, contractual or legal obligations, including those associated with the reclamation of properties and any plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. Initially, a liability for an asset retirement obligation will be recognized at its fair value in the period in which it is incurred. Upon initial recognition of the liability, the corresponding asset retirement cost will be added to the carrying amount of the related asset and the cost will be amortized as an expense over the economic life of the asset using either the unit-of-production method or the straight-line method, as appropriate. Following the initial recognition of the asset retirement obligation, the carrying amount of the liability will be increased for the passage of time and adjusted for changes to the amount or timing of the underlying cash flows needed to settle the obligation.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Goodwill and Other Intangible Assets

The Company adopted Statement of Financial Accounting Standard (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 Goodwill and Other Intangible Assets, effective July 1, 2002. In accordance with (“ASC Topic 350”) “Goodwill and Other Intangible Assets,” goodwill, which represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value.

Income Taxes

Deferred income taxes are provided based on the provisions of ASC Topic 740, “Accounting for Income Taxes”, to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company adopted the provisions of ASC Topic 740; “Accounting For Uncertainty In Income Taxes-An Interpretation Of ASC Topic 740 (“Topic 740”). Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company’s tax positions and tax benefits, which may require periodic adjustments. At December 31, 2013, the Company did not record any liabilities for uncertain tax positions.

We have adopted “Accounting for Uncertainty in Income Taxes”. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption of ASC 740-10-25 had no effect on our condensed financial statements.

Concentration of Credit Risk

The Company maintains its operating cash balances in banks in San Diego, California. The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-Based Compensation

The Company applies Topic 718 “Share-Based Payments” (“Topic 718”) to share-based compensation, which requires the measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized when the event occurs. The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

Basic and Diluted Net Loss Per Share

Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted net loss per share for the Company is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.

Fair Value of Financial Instruments

The Company financial instruments consist primarily of cash, affiliate receivable, settlement receivable, accounts payable and accrued expenses and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows.

The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements. The standard provides a consistent definition of fair value, which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based measurements.

The three-level hierarchy for fair value measurements is defined as follows:

 

  Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

 

  Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable of the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active;

 

  Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

NOTE 4 - STOCKHOLDER’S EQUITY

The Company has 10,000,000 shares of preferred stock, par value $0.0001 authorized. 2,140,000 issued and outstanding as of September 30, 2014 and December 31, 2013 respectively.

On January 17, 2014, the Issuer issued to Andrew Fellner 7,500,000,000 shares in consideration of his foregoing all claims to $750,000 in salary which he could have demanded for his services as CEO if the Issuer from May, 2010 to January 1, 2014.

On January 31, 2014, the Issuer sold 750,000,000 shares to Continental Equities LLC at a price of $0.0001 per share for cash proceeds of $75,000.

On February 4, 2014, the Issuer sold 150,000,000 shares to DGI LLC at a price of $0.0001 per share for cash proceeds of $15,000.

On February 5, 2014, the Issuer sold 125,000,000 shares to INET Capital at a price of $0.0001 per share for cash proceeds of $12,500.

On February 5, 2014, the Issuer sold 125,000,000 to Liquid Management at a price of $0.0001 per share for cash proceeds of $12,500.

On February 7, 2014, the Issuer sold 440,000,000 shares to Caesar Capital Group at a price of $0.0001 per share in exchange for cash proceeds of $44,000.

On February 12, 2014, the Issuer sold 50,000,000 shares to Barry Sheerman at a price of $0.0001 per share in exchange for cash proceeds of $5,000.

On February 12, 2014, the Issuer sold 250,000,000 shares to Jason Sunstein at a price of $0.0001 per share in exchange for cash proceeds of $25,000.

On February 13, 2014, the Issuer sold 300,000,000 shares to DGI LLC at a price of $0.0001 for cash proceeds of $30,000.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On February 14, 2014, the Issuer sold 250,000,000 shares to Jason Sunstein Family Investments, LLC at a price of $0.0001 per share in exchange for cash proceeds of $25,000.

On February 14, 2014, the Issuer sold 200,00,000 shares to Global Partners Inc. at a price of $0.0001 per share in exchange for cash proceeds of $20,000.

On February 14, 2014, the Issuer sold 900,000,000 shares to Whitehead Financial LLC at a price of $0.0001 per share for cash proceeds of $90,000.

On February 18, 2014, the Issuer sold 600,000,000 shares to Eastmore Capital at a price of $0.0001 per share for cash proceeds of $60,000.

On February 18, 2014, the Issuer sold 100,000,000 shares to NF at a price of $0.0001 per share for cash proceeds of $10,000.

On February 19, 2014, the Issuer sold 200,000,000 shares to Daryl Tirico at a price of $0.0001 per share in exchange for cash proceeds of $20,000.

On February 19, 2014, the Issuer sold 1,100,000,000 shares to Whitehead Financial Group LLC at a price of $0.0001 per share in exchange for cash proceeds of $110,000.

On February 20, 2014, the Issuer sold 330,000,000 shares to Tide Pool Ventures Corporation at a price of $0.0001 per share in exchange for cash proceeds of $33,000.

On February 20, 2014, the Issuer sold 200,000,000 shares to Daryl Tirico at a price of $0.0001 per share for cash proceeds of $20,000.

On February 20, 2014, the Issuer sold LaJolla Side 600,000,000 shares at a price of $0.0001 per share for cash proceeds of $60,000.

On February 24, 2014, the Issuer sold 350,000,000 shares to Leland Martin at a price of $0.0001 per share in exchange for cash proceeds of $35,000.

On February 25, 2014, the Issuer sold 250,00,000 shares to Rock Center at a price of $0.0001 per share in exchange for cash proceeds of $25,000.

On February 27, 2014, the Issuer sold 6,750,000,000 shares to KnotFloat & Company/Redwood Management LLC at a price of $0.0001 per share in exchange for cash proceeds of $675,000.

On February 27, 2014, the Issuer sold 200,000,000 shares to International List Consultants at a price of $0.0001 per share in exchange for cash proceeds of $20,000.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On February 28, 2014, the Issuer sold 600,000,000 shares to Joseph Pittera at a price of $0.0001 per share in exchange for cash proceeds of $60,000.

On March 3, 2014, the Issuer sold 1,000,000 shares to International List Consultants at a price of $0.0001 per share for cash proceeds of $100.

On March 3, 2014, the Issuer sold 100,000,000 shares to Nancy Fisher at a price of $0.0001 per share for cash proceeds of $10,000.

On March 3, 2014, the Issuer sold 1,000,000 shares to Eric Lowrey at a price of $0.0001 per share for cash proceeds of $100.

On March 5, 2014, the Issuer sold 100,000,000 shares to Nancy Fisher at a price of $0.0001 per share in exchange for cash proceeds of $10,000.

On March 7, 2014, the Issuer sold 600,000,000 shares to Legal & Compliance LLC at a price of $0.0001 per share in exchange for cash proceeds of $60,000.

On March 11, 2014, the Issuer sold 300,000,000 shares to DGI LLC at a price of $0.0001 per share for cash proceeds of $30,000.

On March 12, 2014, the Issuer sold 250,000,000 shares to Nine Twenty Capital at a price of $0.0001 per share for cash proceeds of $25,000.

On March 13, 2014, the Issuer sold 700,000,000 shares to DGI LLC at a price of $0.0001 per share in exchange for cash proceeds of $70,000.

On March 17, 2014, the Issuer sold 500,000,000 shares to Madison Park Advisors at a price of $0.0001 per share in exchange for cash proceeds of $50,000.

On March 21, 2014, the Issuer sold 3,670,000,000 shares to Beaufort Capital at a price of $0.0001 per share in exchange for cash proceeds of $367,000.

On March 24, 2014, the Issuer sold 3,254,000,000 shares to AGS Capital at a price of $0.0001 per share in exchange for cash proceeds of $325,400.

On March 27, 2014, the Issuer sold 600,000,000 shares to Gina Stagnitto at a price of $0.0001 per share in exchange for cash proceeds of $60,000.

On March 28, 2014, the Issuer sold 600,000,000 shares to Global Partners at a price of $0.0001 per share in exchange for cash proceeds of $60,000.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On April 1, 2014, the Issuer sold 100,000,000 shares to Barry Sheerman at a price of $0.0001 per share for cash proceeds of $10,000.

On April 3, 2014, the Issuer sold 400,000,000 shares to Gina Stagnitto at a price of $0.0001 per share for cash proceeds of $40,000.

On April 3, 2014, the Issuer sold 50,000,000 shares to Mike Sherman at a price of $0.0001 per share for cash proceeds of $5,000.

On April 7, 2014, the Issuer sold 100,000,000 shares to Chuck Bastyr at price of $0.0001 per share for cash proceeds of $10,000.

On April 14, 2014, the Issuer sold 2,500,000,000 shares to AGS Capital at a price of $0.0001 per share in exchange for cash proceeds of $250,000.

On May 6, 2014, the Issuer sold 200,000,000 shares to Global Capital at a price of $0.0001 per share in exchange for cash proceeds of $20,000.

On May 6, 2014, the Issuer sold 700,000,000 shares to DGI at a price of $0.0001 per share in exchange for cash proceeds of $70,000.

On July 10, 2014, the Issuer sold 100,000,000 shares to Angel/Franklin at a price of $0.0001 per share in exchange for cash proceeds of $10,000.

On July 30, 2014, the Issuer sold 3,250,000 shares to David Greenberg in consideration of the cancellation of a $50,000 loan from Mr. Greenberg to the Company.

On July 7, 2014, the Issuer sold 100,000,000 shares to Mike Sherman at a price of $0.0001 per share in exchange for cash proceeds of $10,000.

On July 29, 2014, the Issuer sold 100,000,000 shares to Nancy Fisher at a price of $0.0001 per share in exchange for cash proceeds of $5,000.

On July 29, 2014, the Issuer sold 50,000,000 shares to Eric Lowery at a price of $0.0001 per share in exchange for cash proceeds of $5,000.

On July 29, 2014, the Issuer sold 1,250,000,000 shares to DGI at a price of $0.0001 per share in exchange for consulting services valued at of $125,000.

On August 11, 2014, the Issuer sold 1,300,000,000 shares to Whitehead Financial at a price of $0.0001 per share in exchange for cash proceeds of $130,000.

On September 2, 2014, the Issuer sold 100,000,000 shares to Lourell Roberts at a price of $0.0001 per share in exchange for consulting services valued at of $10,000.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On September 18, 2014, the Issuer sold 205,000,000 shares to Platinum Magazine at a price of $0.0001 per share in exchange for cash proceeds of $20,500.

The Company received approximately $2.9 million cash proceeds from the sell of stock year to date for 2014, after expenses and approximately $150,000 in 2013.

At December 31, 2014 and December 31, 2013, the Company had 39,800,341,754 and 200,341,754 shares issued and outstanding respectively.

NOTE 5 - INCOME TAXES

The Company adopted ASC Topic 740, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

For income tax reporting purposes, the Company’s aggregate unused net operating losses approximate $2,900,000, which expire in various years through 2030, subject to limitations of Section 382 of the Internal Revenue Code, as amended. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management based upon the earning history of the Company, it is more likely than not that the benefits will not be realized.

Under the Tax Reform Act of 1986, the benefits from net operating losses carried forward may be impaired or limited on certain circumstances. Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, cumulative ownership changes of more than 50% over a three-year period. The impact of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined.

The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:

 

     December 31, 2014     December 31, 2013  

Statutory federal income tax rate

     34.00     34.00

State income taxes and other

     5.50     5.50
  

 

 

   

 

 

 

Valuation allowance

  (39.50 ) %    (39.50 ) %

Effective tax rate

  -0-   -0-
  

 

 

   

 

 

 

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:

NOTE 6 – DEBT

In addition the CEO of the Company loaned the Company approximately $357,044 for working capital purposes in 2011. The CEO converted $357,044 of the debt to preferred stock in March 2013 and January 2014. In December, 2014, the CEO sold his preferred stock back to the Company in exchange for an increase of $107,000 in the amount of the debt. For 2013-2014 the Company accrued salary and expenses due to the CEO. These costs were recorded as Due to related party during the year. Total expenses accrued during this time was $468,000. The outstanding balance as of December 31, 2014 is $249,000.

NOTE 7 – INVESTMENT PROPERTY

The Company purchased a property from foreclosure with a total to-date investment of $195,066, inclusive of a $15,000 deposit for needed repairs. This property was sold in the first quarter of 2011 for a net gain of $100,983.

NOTE 8 – REVERSE ACQUISITION

On June 1, 2010, the Company issued 55,000,000 shares of its common stock, par value $0.001 per share (“Common Stock”), to effect the acquisition of 99% of the issued and outstanding equity shares of Punta Perfecta S.A. de C.V, a Mexican corporation (“Punta”) which owns the Punta Perfecta project in Baja, Mexico that had an appraised value of approximately $5,000,000. The company has valued the asset at $450,000 based on the value of the property at the time of acquisition. The Company has reviewed the value as of December 31, 2011 and has determined no impairment is necessary. The Company Punta financials consists of only the land acquired and two buildings located on the land. There is no other assets or liabilities associated with this acquisition. The financials for Punta are included in the presented financial statements for the Company.

As part of the Punta acquisition the Company owns approximately 10 acres of land in the Los Cabos area of Baja, Mexico and has a contract to purchase an additional approximately 48 acres of land in La Paz, Mexico. In early 2010, the Company developed a plan to develop this land using its real estate development subsidiary with the idea of building and marketing small luxury resort homes, called Small Luxury Villas (“SLV”), on a fractional (sometimes called time share or time interval) ownership basis. This division, Punta Perfecta S.A. de C.V., is a Mexican corporation, which owns the Los Cabos area land and has the contract to purchase the additional land. When that unit or units are completed, the Company will be obligated to pay the contractor for its cost of construction plus 15%, which amount is currently estimated to total approximately $520,000 to $575,000. No liability for the amount due to contractor has been accrued as it is not due until the project is finished.

 

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STRATEGIC GLOBAL INVESTMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – ACQUISITIONS

On January 1, 2011, the Company acquired Wazzuu, Inc., a then newly formed corporation which owned certain intellectual property, including a social media networking website. The cost of the acquisition was 240,000 shares of common stock valued at approximately $54,101 and cash paid for the Company including acquisition costs. The Company subsequently stopped using the Wazzuu.com web site and started a new web site called WaZillo.com. The entire acquisition price was written off as impairment to goodwill.

On February 21, 2011, the Company purchased certain intangible assets, including several well followed websites in the North Central US, of 3D Live, Inc., a Minnesota corporation, for 750,000 shares of Common Stock valued at $37,500. In addition the Company incurred additional $33,300 of acquisition costs related to the purchase. Costs included legal and professional fees and other miscellaneous related costs. The entire purchase price was written off as impairment to goodwill.

On March 18, 2013 the Company acquired the assets of Tuvozonline. The assets included computer equipment, customer lists, existing contracts, advertising material and Gateways to various countries in Europe and Asia. The assets were acquired in exchange for 5 million shares valued at $200,000.

In February 2014, the Company purchased bearpotinc Inc., a Colorado corporation, which proposed to grow and sell marijuana in the state of Colorado for $50,000 in cash.

The Company has discontinued these operations and is no longer operating the bearpotinc, Inc. business.

NOTE 10 – GOODWILL IMPAIRMENT AND OTHER INTANGIBLE ASSETS

The Company adopted Statement of Financial Accounting Standard (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 Goodwill and Other Intangible Assets, effective July 1, 2002. In accordance with (“ASC Topic 350”) “Goodwill and Other Intangible Assets,” goodwill, which represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value.

NOTE 11- NOTES RECEIVABLE

The Company current has two notes receivable outstanding totaling $1,419,600 as of December 31, 2014. The first note dated October 2014 was for an initial amount of $180,000 and is secured with land and building on a golf course. Note is due July 2015. The note carries an interest rate of 8% and has a balance of $150,000 as of the filing date.

The second note was for an initial amount of $1,150,000 and additional $50,000 loaned later for a total initial advance of $1,200,000. Note is payable on demand with 10 days notice and carries an interest rate of national prime rate plus 1%. As of the filing date the current balance is $825,000.

 

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EXHIBITS

 

Exhibit

Number

    
2.1    Restated Certificate of Incorporation*
2.1.1    Amendment to Restated Certificate of Incorporation**
2.1.2    Amendment to Restated Certificate of Incorporation
2.2    Bylaws*
3.1    Exhibit 2.1, in its entirely, is incorporated herein by reference
4.1    Form of Subscription Agreement
12    Opinion of Counsel

 

* Previously filed with the Issuer’s Offering Statement on Form 1-A filed with the Commission on December 10, 2012 and incorporated herein by reference.
** Previously filed with the Issuer’s Offering Statement on Form 1-A filed with the Commission on November 5, 2013 and incorporated herein by reference.


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SIGNATURES

Pursuant to the requirement of Regulation A, the issuer certifies that has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California on the 22 day of July, 2015.

 

STRATEGIC GLOBAL INVESTMENTS, INC.
By:

/s/ Andrew T. Fellner

Andrew T. Fellner
Title: CEO

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

 

/s/ Andrew T. Fellner

Andrew T. Fellner
CEO, Chief Financial Officer and Sole Director
July 22, 2015


Exhibit 2.1.2

 

State of Delaware
Secretary of State
Division of Corporations
Delivered 10:30 AM 06/01/2015
FILED 10:30 AM 06/01/2015
SRV 150874867 - 4577956 FILE

CERTIFICATE OF AMENDMENT OF THE

RESTATED CERTIFICATE OF INCORPORATION OF

STRATEGIC GLOBAL INVESTMENTS, INC.

STRATEGIC GLOBAL INVESTMENTS, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), hereby certifies that:

FIRST: The name of the Corporation is STRATEGIC GLOBAL INVESTMENTS, INC.

SECOND: The Corporation was originally incorporated under the name American Consolidated Laboratories, Inc., and the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 22, 2008.

THIRD: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions to amend its Sixth Amended and Restated Certificate of Incorporation as follows:

1. Article VI shall be amended and restated to read in its entirety as follows:

“The total number of shares of stock which the Corporation shall have authority to issue is 110,000,000; 100.000,000 shares shall be designated common stock, par value $.00001 per share and 10,000,000 shares shall be designated as preferred stock, par value $.001 per share.

Preferred Stock:

The Board of Directors of the Corporation is vested with the authority to determine and state the designations and preferences, limitation, relative rights and voting rights, if any, of each series by the adoption and filing in accordance with the Delaware General Corporation Law, before the issuance of any shares of such series, of a designation of those preferences, rights and voting rights which need not be approved by the stockholders or the holders of any class or series of shares except as provided by law. All shares of preferred stock of the same series shall be identical.

No share shall be issued without consideration being exchanged, and it shall thereafter be non-assessable.

The following is a description of each class of stock of the Corporation with the preferences, conversion and other rights, restrictions, voting powers, limitations as to distributions, qualifications, and terms and condition of redemption of each class:

FIRST: The Common Stock shall have voting rights such that each share of Common Stock duly authorized, issued and outstanding shall entitle its holder to one vote.

SECOND: Notwithstanding any provision of this Certificate of Incorporation to the contrary, the affirmative vote of a majority of all the votes entitled to be cast on the matter shall be sufficient, valid and effective, after due authorization, approval or advice of such action by the Board of Directors, as required by law, to approve and authorize the following acts of the Corporation:

(i) any amendment of this Certificate of Incorporation;

 

1


(ii) the merger of the Corporation into another corporation or the merger of one or more other corporations into the Corporation;

(iii) the sale, lease, exchange or other transfer of all, or substantially all, of the property and assets of the Corporation including its goodwill and franchises;

(iv) the participation by the Corporation in a share exchange (as defined in Delaware General Corporation Law); and

(v) the voluntary or involuntary liquidation, dissolution or winding-up of or the revocation of any such proceedings relating to the Corporation.

Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment of the Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 10,000 shares of Common Stock, par value $0.00001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock, par value $0.00001 per share; provided, however, that the Corporation shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share one share of common stock.”

FOURTH: Thereafter pursuant to a resolution of the Board of Directors, this Certificate of Amendment was submitted to the stockholders of the Corporation for their approval, and was duly adopted at the Annual Meeting of Stockholders held on April 24, 2015 in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its Chief Executive Officer this 19 day of May, 2015.

 

STRATEGIC GLOBAL INVESTMENTS, INC.
By

/s/ Andrew T. Fellner

Andrew T. Fellner, Chief Executive Officer

 

2



Exhibit 4.1

SUBSCRIPTION AGREEMENT

SUBSCRIPTION AGREEMENT (the “Subscription Agreement”) made as of this      day of             , 2015, by and between Strategic Global Investments, Inc., a Delaware corporation (the “Issuer”), with offices at 8451 Miralani Drive, Suite D, San Diego, CA 92126, and the undersigned (the “Subscriber”).

WHEREAS, pursuant to an Offering Circular dated             , 2015 (the “Offering Circular”), the Issuer is offering in a Regulation A offering (the “Offering”) to accredited investors up to 95,000,000 shares (“Shares”) of the Issuer’s common stock, par value $0.00001 per share, (“Common Stock”) at a purchase price of $         per Share for a maximum aggregate purchase price of $         (the “Maximum Offering”).

WHEREAS, the Subscriber desires to subscribe for the number of Shares set forth on the signature page hereof, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

  I. SUBSCRIPTION FOR AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER

1.1 Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Issuer the number of Shares set forth on the signature page hereof, at a price equal to $         per Share, and the Issuer agrees to sell such Shares to the Subscriber for said purchase price, subject to the Issuer’s right to sell to the Subscriber such lesser number of (or no) Shares as the Issuer may, in its sole discretion, deem necessary or desirable. The purchase price is payable by wire or by check payable to the Issuer.

1.2 The Subscriber has full power and authority to enter into and deliver this Subscription Agreement and to perform its/his/her obligations hereunder, and the execution, delivery and performance of this Subscription Agreement has been duly authorized, if applicable, and this Subscription Agreement constitutes a valid and legally binding obligation of the Subscriber.

1.3 The Subscriber acknowledges receipt of, and represents and warrants that the Subscriber and his, her or its attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, “Advisors”) prior to the execution of this Subscription Agreement has carefully reviewed and understands, the Offering Circular, all supplements to the Offering Circular, and all other documents furnished in connection with this transaction by the Issuer (collectively, the “Offering Documents”).

1.4 The Subscriber recognizes that the purchase of the Shares involves a high degree of risk in that (i) an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Shares; (ii) the Shares are being sold pursuant to an exemption under Regulation A issued by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended


(the “Act”), but they are not registered under the Act or any state securities law; (iii) there is only a limited trading market for the Shares, and there is no assurance that a more active one will ever develop, and thus, the Subscriber may not be able to liquidate his, her or its investment; and (iv) an investor could suffer the loss of his, her or its entire investment. The Subscriber has carefully read and considered the matters set forth in the Offering Circular and in particular the matters under the caption “Risk Factors” therein, and, in particular, acknowledges that the Issuer has a limited operating history.

1.5 The Subscriber is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated under the Act, and the Subscriber is able to bear the economic risk of an investment in the Shares.

1.6 The Subscriber is not relying on the Issuer or its affiliates or agents with respect to economic considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with, only his, her or its Advisors, if any. Each Advisor, if any, is capable of evaluating the merits and risks of an investment in the Shares as such are described in the Offering Circular, and each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Subscription Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the Issuer.

1.7 The Subscriber has prior investment experience (including investment in non-listed and non-registered securities), has (together with his, her or its Advisors, if any) such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Shares and has read and evaluated, or has employed the services of an investment advisor, attorney or accountant to read and evaluate, all of the documents furnished or made available by the Issuer to the Subscriber, including the Offering Circular, as well as the merits and risks of such an investment by the Subscriber. The Subscriber’s overall commitment to investments, which are not readily marketable, is not disproportionate to the Subscriber’s net worth, and the Subscriber’s investment in the Shares will not cause such overall commitment to become excessive. The Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Shares. The Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Shares for an indefinite period or a complete loss of this investment. If other than an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Shares.

1.8 The Subscriber acknowledges that any estimates or forward-looking statements or projections included in the Offering Circular were prepared by the management of the Issuer in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Issuer, its management or its affiliates and should not be relied upon.

1.9 The Subscriber acknowledges that the purchase of the Shares may involve tax consequences to the Subscriber and that the contents of the Offering Documents do not contain tax advice. The Subscriber acknowledges that the Subscriber must retain his, her or its own professional Advisors to evaluate the tax and other consequences to the Subscriber of an

 

2


investment in the Shares. The Subscriber acknowledges that it is the responsibility of the Subscriber to determine the appropriateness and the merits of a corporate entity to own the Subscriber’s Shares and the corporate structure of such entity.

1.10 The Subscriber acknowledges that the Offering Circular and this Offering have not been reviewed by the SEC or any state securities commission, and that no federal or state agency has made any finding or determination regarding the fairness or merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering Circular. Any representation to the contrary is a crime.

1.11 The Subscriber represents, warrants and agrees that the Shares are being purchased for his, her or its own beneficial account and not with a view toward distribution or resale to others. The Subscriber understands that the Issuer is under no obligation to register the Shares on his, her or its behalf or to assist them in complying with any exemption from registration under applicable state securities laws.

1.12 The Subscriber understands that the Shares have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his, her or its investment intention. The Subscriber realizes that, in the view of the SEC, a purchase with an intent to resell would represent a purchase with an intent inconsistent with his, her or its representation to the Issuer, and the SEC might regard such a sale or disposition as a deferred sale, for which such exemption is not available. The Subscriber does not have any such intentions.

1.13 The Subscriber agrees to indemnify and hold the Issuer, its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns harmless against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber herein or as a result of any sale or distribution by the Subscriber in violation of the Act (including, without limitation, the rules promulgated thereunder), any state securities laws, or the Issuer’s Restated Certificate of Incorporation and/or Bylaws, as amended from time to time.

1.14 The Subscriber understands that the Issuer will review and rely on this Subscription Agreement without making any independent investigation; and it is agreed that the Issuer reserves the unrestricted right to reject or limit any subscription and to withdraw the Offering at any time.

1.15 The Subscriber hereby represents that the address of the Subscriber furnished at the end of this Subscription Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if it is a corporation or other entity.

1.16 The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, the Subscriber must give such firm the notice required by FINRA’s Conduct Rules, receipt of which must be acknowledged by such firm on the signature page hereof.

1.17 The Subscriber hereby acknowledges that neither the Issuer nor any persons associated with the Issuer who may provide assistance or advice in connection with the Offering are or are expected to be members or associated persons of members of FINRA or registered broker-dealers under any federal or state securities laws.

 

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1.18 The Subscriber hereby represents that, except as expressly set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by the Issuer or by any agent, sub-agent, officer, employee or affiliate of the Issuer and, in entering into this transaction, the Subscriber is not relying on any information other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.

1.19 No oral or written representations have been made, or oral or written information furnished, to the Subscriber or his, her or its Advisors, if any, in connection with the offering of the Shares which are in any way inconsistent with the information contained in the Offering Documents.

1.20 All information provided by the Subscriber in the Investor Questionnaire attached to this Subscription Agreement is true and accurate in all respects, and the Subscriber acknowledges that the Issuer will be relying on such information to its possible detriment in deciding whether the Issuer can sell these securities to the Subscriber without giving rise to the loss of the exemption from registration under applicable securities laws.

1.21 The Subscriber is unaware of, is in no way relying on, and did not become aware of the offering of the Shares through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet, in connection with the offering and sale of the Shares and is not subscribing for Shares and did not become aware of the offering of the Shares through or as a result of any seminar or meeting to which the Subscriber was invited by, or any solicitation of a subscription by, a person not previously known to the Subscriber in connection with investments in securities generally.

1.22 The Subscriber has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Subscription Agreement or the transactions contemplated hereby.

1.23 The Subscriber is not relying on the Issuer, or any of its employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Shares, and the Subscriber has relied on the advice of, or has consulted with, only his, her or its own Advisors, if any.

1.24 (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Issuer’s business objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Issuer is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Issuer; (b) is independent of the Issuer and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Issuer or any of its affiliates or its agents.

 

4


1.25 The foregoing representations, warranties and agreements shall survive the Closing.

 

  II. REPRESENTATIONS BY THE ISSUER

The Issuer represents and warrants to the Subscriber that as of the date of the closing of this Offering (the “Closing Date”):

2.1 The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, authorized to do business in the States of Delaware and California and has the corporate power to conduct the business which it conducts and proposes to conduct.

2.2 The execution, delivery and performance of this Subscription Agreement by the Issuer have been duly authorized by the Issuer and all other corporate action required to authorize and consummate the offer and sale of the Shares has been duly taken and approved. This Subscription Agreement is valid, binding and enforceable against the Issuer in accordance with its terms; except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws or by legal or equitable principles relating to or limiting creditors’ rights generally, the availability of equity remedies, or public policy as to the enforcement of certain provisions, such as indemnification provisions.

2.3 The Shares have been duly and validly authorized and issued.

2.4 The Issuer knows of no pending or threatened legal or governmental proceedings to which the Issuer is a party which would materially adversely affect the business, financial condition or operations of the Issuer.

 

  III. TERMS OF SUBSCRIPTION

3.1 Subject to Section 3.2 hereof, the subscription period will begin as of the date of the Offering Circular and will terminate at 11:59 PM Eastern Time, on the earlier of the date on which the Maximum Offering is sold or one (1) year from the commencement date or the date the Offering is terminated by the Issuer (the “Termination Date”).

3.2 The Subscriber has effected a wire transfer in the full amount of the purchase price for the Shares to the Issuer or has delivered a check in payment of the purchase price for the Shares.

3.3 The Subscriber hereby authorizes and directs the Issuer to deliver or cause the delivery of any certificates or other written instruments representing the Shares to be issued to such Subscriber pursuant to this Subscription Agreement to the address indicated on the signature page hereof.

 

5


3.4 If the Subscriber is not a United States person, such Subscriber shall immediately notify the Issuer, and the Subscriber hereby represents that the Subscriber is satisfied as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Shares. Such Subscriber’s subscription and payment for, and continued beneficial ownership of, the Shares will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.

 

  IV. NOTICE TO SUBSCRIBERS

4.1 THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

4.2 FOR CALIFORNIA RESIDENTS ONLY: THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS OFFERING HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF THE SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25000, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

4.4 FOR FLORIDA RESIDENTS ONLY: THE SHARES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER § 517.061 OF THE FLORIDA SECURITIES ACT. THE SHARES HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

4.5 FOR NON-U.S. RESIDENTS ONLY: NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES OF AMERICA THAT

 

6


WOULD PERMIT AN OFFERING OF THESE SECURITIES, OR POSSESSION OR DISTRIBUTION OF OFFERING MATERIAL IN CONNECTION WITH THE ISSUE OF THESE SECURITIES, IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. IT IS THE RESPONSIBILITY OF ANY PERSON WISHING TO PURCHASE THESE SECURITIES TO SATISFY HIMSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OUTSIDE THE UNTIED STATES OF AMERICA IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER APPLICABLE FORMALITIES.

 

  V. MISCELLANEOUS

5.1 Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by reputable overnight courier, facsimile (with receipt of confirmation) or registered or certified mail, return receipt requested, addressed to the Issuer, at the address set forth in the first paragraph hereof, Attention: Chief Executive Officer, and to the Subscriber at the address or facsimile number indicated on the signature page hereof. Notices shall be deemed to have been given on the date when mailed or sent by facsimile transmission or overnight courier, except notices of change of address, which shall be deemed to have been given when received.

5.2 This Subscription Agreement shall not be changed, modified or amended except by a writing signed by the parties against whom such modification or amendment is to be charged, and this Subscription Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.

5.3 This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

5.4 Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of California. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Subscription Agreement shall be adjudicated only before a Federal court located in San Diego County, State of California, and they hereby submit to the exclusive jurisdiction of the federal courts located in San Diego County, State of California with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Subscription Agreement or any acts or omissions relating to the sale of the securities hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in care of the address set forth below or such other address as the Subscriber shall furnish in writing to the other. The parties further agree that in the event of any dispute, action, suit or other proceeding arising out of or in

 

7


connection with this Subscription Agreement, the Offering Circular or other matters related to this subscription brought by a Subscriber (or transferee), the Issuer (and each other defendant) shall recover all of such party’s attorneys’ fees and costs incurred in each and every action, suit or other proceeding, including any and all appeals or petitions therefrom. As used herein, attorney’s fees shall be deemed to mean the full and actual costs of any investigation and of legal services actually performed in connection with the matters involved, calculated on the basis of the usual fee charged by the attorneys performing such services.

5.5 This Subscription Agreement may be executed in counterparts. Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Shares as herein provided; subject, however, to the right hereby reserved by the Issuer to (i) enter into the same agreements with other subscribers, (ii) add and/or delete other persons as subscribers and (iii) reduce the amount of or reject any subscription.

5.6 The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.

5.7 It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.

5.8 The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further actions as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.

[Signature Pages Follow]

 

8


IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written above.

 

 

X $             for each Share = $            .
Number of Shares subscribed for Aggregate Purchase Price

Manner in which Title is to be held (Please Check One):

 

1.              Individual 7.             

Trust/Estate/Pension or Profit Sharing Plan

Date Opened:                    

2.              Joint Tenants with Right of Survivorship 8.              As a Custodian for

 

Under the Uniform Gift to Minors Act of the State of

 

3.              Community Property 9.              Married with Separate Property
4.              Tenants in Common 10.              Keogh
5.              Corporation/Partnership/ Limited Liability Company 11.              Tenants by the Entirety
6.              IRA 12.              Foundation described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN

INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE 10

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 11

 

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EXECUTION BY NATURAL PERSONS

 

 

Exact Name in Which Title is to be Held

 

Name (Please Print)

 

Name of Additional Subscriber

 

Residence: Number and Street

 

Address of Additional Subscriber

 

City, State and Zip Code

 

City, State and Zip Code

 

Social Security Number

 

Social Security Number

 

Telephone Number

 

Telephone Number

 

Fax Number (if available)

 

Fax Number (if available)

 

E-Mail (if available)

 

E-Mail (if available)

 

(Signature)

 

(Signature of Additional Subscriber)

 

ACCEPTED this      day of              2015, on behalf of Strategic Global Investments, Inc.
By:

 

Name:
Title:

 

10


EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY

(Corporation, Partnership, Trust, Etc.)

 

 

Name of Entity (Please Print)
Date of Incorporation or Organization:
State of Principal Office:
Federal Taxpayer Identification Number:

 

 

Office Address

 

City, State and Zip Code

 

Telephone Number

 

Fax Number (if available)

 

E-Mail (if available)

 

[seal]

 

By:

 

Attest:

 

Name:
(If Entity is a Corporation) Title:
* If Subscriber is a Registered Representative with a FINRA member firm, have the following acknowledgement signed by the appropriate party:
The undersigned FINRA member firm acknowledges receipt of the notice required by Rule 3050 of the FINRA Conduct Rules

 

ACCEPTED this      day of              2015, on behalf of Strategic Global Investments, Inc.
Name of FINRA Firm
By:

 

By:

 

Name: Name:
Title: Title:

 

11


INVESTOR QUESTIONNAIRE

Instructions: Check all boxes below which correctly describe you.

 

¨ You are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), (ii) a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity, (iii) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (iv) an insurance company as defined in Section 2(13) of the Securities Act, (v) an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”), (vi) a business development company as defined in Section 2(a)(48) of the Investment Company Act, (vii) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, (viii) a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, for the benefit of its employees and you have total assets in excess of $5,000,000, or (ix) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (1) the decision that you shall subscribe for and purchase Shares (the “Shares”) each consisting of 100 shares of the common stock, par value $0.00001 per share (the “Shares”) of Strategic Global Investments, Inc. is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe for and purchase the Shares is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act (“Regulation D”) or (3) you are a self-directed plan and the decision that you shall subscribe for and purchase the Shares is made solely by persons or entities that are accredited investors.

 

¨ You are a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.

 

¨ You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose of making an investment in the Shares and with total assets in excess of $5,000,000.

 

¨ You are a director or executive officer of Strategic Global Investments, Inc.

 

¨

You are a natural person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time of your subscription for and purchase of the Shares, excluding your primary residence as an asset and any indebtedness that is secured by your primary residence, up to the estimated fair market value of the primary residence at this time, as a liability (except that if the amount of the indebtedness secured by your primary residence at this time exceeds the amount of such indebtedness outstanding 60 days earlier, other than as a result of the purchase of the primary residence, the amount of the excess must be included as a


  liability) and any indebtedness that is secured by your primary residence which is more than the estimated fair market value of your primary residence at this time must also be included as a liability.

 

¨ You are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching the same income level in the current year.

 

¨ You are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose subscription for and purchase of the Shares is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D.

 

¨ You are an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs.


Check all boxes below which correctly describe you.

With respect to this investment in Shares of the Issuer, your:

 

Investment Objectives:            x  Aggressive Growth            x  Speculation
Risk Tolerance:            ¨  Low Risk            ¨  Moderate Risk            x  High Risk

Are you associated with a FINRA Member Firm?    ¨  Yes    ¨  No

Your initials (purchaser and co-purchaser, if applicable) are required for each item below:

 

                          I/We understand that this investment is not guaranteed.
                          I/We are aware that this investment is not liquid.
                          I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in this offering.
                          I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the inherent risks including lack of liquidity and lack of diversification. Success or failure of private placements such as this is dependent on the issuer of these securities and is outside the control of the investors. While potential loss is limited to the amount invested, such loss is possible.)

The Subscriber hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its execution of the Subscription Agreement pursuant to which it purchased Shares of the Issuer.

 

 

 

Name of Purchaser [please print] Name of Co-Purchaser [please print]

 

 

Signature of Purchaser (Entities please provide signature of Purchaser’s duly authorized signatory.) Signature of Co-Purchaser

 

Name of Signatory (Entities only)

 

Title of Signatory (Entities only)


Exhibit 12

July 21, 2015

Strategic Global Investments, Inc.

701 Palomar Airport Road, Suite 300

Carlsbad, CA 92011

 

Re: Offering Statement on Form 1-A

SEC File No. 024-

Gentlemen:

We are acting as special counsel to Strategic Global Investments, Inc., a Delaware corporation (the “Company”), in connection with the proposed sale by the company of up to 95,000,000 shares (“Shares”) of its Common Stock, par value $0.00001 per share, (“Common Stock”) for a purchase price of $         per Share, pursuant to an offering (the “Offering”) to be qualified with the Securities and Exchange Commission on Form 1-A under Regulation A issued under the Securities Act of 1933, as amended, (the “Act”).

In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion, including (i) the Form 1-A; (ii) the corporate and organizational documents of the Company, including the Certificate of Incorporation of the Company (the “Certificate”); (iii) minutes and records of the proceedings of the Company with respect to the issuance and sale of the Shares, and (iv) the Regulation A Offering Statement on Form 1-A (the “Offering Statement”) covering the sale of the Shares.

For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto other than the Company and the due authorization, execution and delivery of all documents by the parties thereto other than the Company. We have not independently established or verified any facts relevant to the opinions expressed herein, but have relied upon statements and representations of officers and other representatives of the Company and others.


Strategic Global Investments, Inc.

July 21, 2015

Page Two

Based upon and subject to the foregoing qualifications, assumptions and limitations and the further limitations set forth below, we are of the opinion that:

The sale of the Shares has been duly authorized, and, when (i) the Offering Statement becomes qualified under the Act, and (ii) the Shares have been issued and sold and the consideration therefor has been received therefore by the Company pursuant to the terms of the Offering, the Shares will be validly issued, fully paid and non-assessable.

Our opinion expressed above is subject to the qualification that we express no opinion as to the applicability of, compliance with, or effect of any laws except the General Corporation Law of the State of Delaware (including the statutory provisions, all applicable provisions of the Delaware constitution and reported judicial decisions interpreting the foregoing).

We do not find it necessary for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or “Blue Sky” laws of the various states to the issuance and sale of the Shares or their sale in groups of Units.

This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. This opinion speaks only as of the date that the Offering Statement becomes effective under the Act, and we assume no obligation to revise or supplement this opinion after the date of effectiveness should the General Corporation Law of the State of Delaware be changed by legislative action, judicial decision or otherwise after the date hereof.

Sincerely,

MORELLA & ASSOCIATES, A PROFESSIONAL CORPORATION

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