UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Amendment
No. 1
to
FORM
10
GENERAL
FORM FOR REGISTRATION OF SECURITIES
Pursuant
to Section 12(b) or (g) of The Securities Exchange Act of 1934
GLOBAL
TECHNOLOGIES, LTD
(Exact
name of registrant as specified in its charter)
Delaware
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86-0970492
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(State
or other jurisdiction
of
incorporation)
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(IRS
Employer
Identification
No.)
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510
1st Ave N., Suite 901
St.
Petersburg, FL
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33701
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (727) 482-1505
A
Registered Agent, Inc.
8
The Green, Suite A
Dover,
DE 19901
(302)
288-0670
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Securities
to be registered pursuant to Section 12(g) of the Act:
Class
A Common Stock, $.0001 par value
(Title
of Class)
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [X]
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Smaller
reporting company [X]
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|
Emerging
growth company [ ]
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. [X] YES [ ] NO
As
of July 23, 2020, there were 12,189,293,609 shares of registrant’s Class A common stock outstanding.
TABLE
OF CONTENTS
EXPLANATORY
NOTE
Global
Technologies, Ltd. is filing this General Form for Registration of Securities on Form 10, which we refer to as the Registration
Statement, to register its Class A Common Stock, par value $0.0001 per share, pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. Once this registration statement is deemed effective, we will be subject to the
requirements of Regulation 13A under the Exchange Act, which will require us to file annual reports on Form 10-K, quarterly reports
on Form 10-Q, and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act
applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act. Unless otherwise mentioned
or unless the context requires otherwise, when used in this Registration Statement, the terms “Global Technologies,”
“Company,” “we,” “us,” and “our” refer to Global Technologies, Ltd.
FORWARD-LOOKING
STATEMENTS
This
Registration Statement contains forward-looking statements that involve substantial risks and uncertainties. All statements, other
than statements of historical fact, contained in this Registration Statement, including statements regarding our strategy, future
operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking
statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“may,” “plan,” “predict,” “project,” “target,” “potential,”
“will,” “would,” “could,” “should,” “continue,” and similar expressions
are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
We
may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements we make. We have included important cautionary statements in this
Registration Statement, particularly in the “Risk Factors” section, that we believe could cause actual results or
events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the
potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You
should read this Registration Statement and the documents that we have filed as exhibits to this Registration Statement with the
understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained
in this Registration Statement are made as of the date of this Registration Statement, and we do not assume any obligation to
update any forward-looking statements except as required by applicable law.
WHERE
YOU CAN FIND MORE INFORMATION ABOUT US
When
this Registration Statement becomes effective, we will begin to file reports, proxy statements, information statements and other
information with the United States Securities and Exchange Commission, or SEC. You may read and copy this information, for a copying
fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document
retrieval services, and at the website maintained by the SEC at http://www.sec.gov.
Our
Internet website address is http://www.globaltechnologiesltd.info. Information contained on the website does not constitute part
of this Registration Statement. We have included our website address in this Registration Statement solely as an inactive textual
reference. When this Registration Statement is effective, we will make available, through a link to the SEC’s website, electronic
copies of the materials we file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, the Section 16 reports filed by our executive officers, directors and 10% stockholders and amendments to those reports.
Item
1. Business.
Overview
Global
Technologies, Ltd is a publicly quoted shell company that was
incorporated under the laws of the State of Delaware on January 20, 1999 under the name of NEW IFT Corporation. On August 13,
1999, the Company filed an Amended and Restated Certificate of Incorporation with the State of Delaware to change the name of
the corporation to Global Technologies, Ltd. Our principal executive offices are located at 501 1st Ave N., Suite 901,
St. Petersburg, FL 33701 and our telephone number is (727) 482-1505. Our website address is www.globaltechnologiesltd.info. The
information contained on, or that can be accessed through, our website is not a part of this Registration Statement. We have included
our website address in this Registration Statement solely as an inactive textual reference.
COVID-19
COVID-19
has caused and continues to cause significant loss of life and disruption to the global economy, including the curtailment of
activities by businesses and consumers in much of the world as governments and others seek to limit the spread of the disease,
and through business and transportation shutdowns and restrictions on people’s movement and congregation.
As
a result of the pandemic, we have experienced, and continue to experience, weakened demand for our CBD products. Many of our customers
have been unable to sell our products in their stores due to government-mandated closures and have deferred or significantly reduced
orders for our products. We expect these trends to continue until such closures are significantly curtailed or lifted. In addition,
the pandemic has reduced foot traffic in the stores where our products are sold that remain open, and the global economic impact
of the pandemic has temporarily reduced consumer demand for our products as they focus on purchasing essential goods.
Given these factors, the Company anticipates that the greatest impact
from the COVID-19 pandemic will occur in the third and fourth quarters of fiscal 2020 and first quarter of fiscal 2021 and will
most likely result in a significant delay in the buildout of our Markets on Main operations.
In addition, certain
of our suppliers and the manufacturers of certain of our products were adversely impacted by COVID-19. As a result, we faced delays
or difficulty sourcing products, which negatively affected our business and financial results. Even if we are able to find alternate
sources for such products, they may cost more and cause delays in our supply chain, which could adversely impact our profitability
and financial condition.
We
have taken actions to protect our employees in response to the pandemic, including closing our corporate office and requiring
our office employee to work from home. At the manufacturing facility where our HMNRTH CBD products are produced, certain practices
have been taken into effect to safeguard workers, including a staggered work schedule, and shortening of the work week. If this
were to continue, it may significantly delay our ability to have product produced for delivery.
Prior
Operational History
From
inception until March 2011, Global Technologies was a technology portfolio company that acquired nascent technology and related
innovations, inventions and IP assets to enhance their growth and development. The Company built revenues and asset value through
a model of continuous growth, income from or sale of its portfolio holdings, and technology licensing or distribution agreements.
The
Company invested primarily in innovative and promising clean/renewable energy or bio-tech technologies that had reached the stage
in the critical Technology Development & Demonstration phase of the Innovative Cycle, which includes Prototype, Demonstration
and Market Analysis.
In
March 2011, the Company abandoned its operations. Mr. Jimmy Wayne Anderson, our sole officer and director, was appointed a director
of the Company in December 2017 and an officer in January 2018.
Current
Operations
Global
Technologies, Ltd (“Global”) is a holding corporation, which through its subsidiaries, has operations engaged in the
online sales of CBD and hemp related products, the acquisition of intellectual property in the safety and security space and as
a portal for entrepreneurs to provide immediate access to live shopping, e-commerce, product placement in brick and mortar retail
outlets and logistics.
On
November 30, 2019, the Company entered into a Purchase and Sale Agreement (the “Agreement”) for the purchase of TCBM
Holdings, LLC (“TCBM”). Under the terms of the Agreement, the Company issued a Convertible Promissory Note (the “Note”)
in the amount of $2,000,000 to Jetco Holdings, LLC for the purchase of all issued and outstanding membership units of TCBM and
its subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
On
March 11, 2020, the Company, through its two wholly owned subsidiaries, HMNRTH, LLC (the “Seller”) and TCBM Holdings,
LLC (the “Owner”) (together Seller and Owner the “Selling Parties”) entered into an Asset Purchase Agreement
(the “Agreement”) with Edison Nation, Inc. and its wholly owned subsidiary, Scalematix, LLC (together the “Buyer”),
for the sale of certain assets in the health and wellness industry and related consumer products industry. Under the terms of
the Agreement, Buyer was to remit $70,850 via wire transfer at Closing and issue to a representative of the Selling Parties Two
Hundred Thirty-Eight Thousand Seven Hundred and Fifty (238,750) shares of restricted common stock. In addition, the Selling Parties
shall have the right to additional earn out compensation based upon the following metrics: (i) at such time as the purchased assets
achieve cumulative revenue of $2,500,000, the Selling Parties shall earn One Hundred Twenty-Five Thousand (125,000) shares of
common stock; and (ii) at such time as the purchased assets achieve cumulative revenue of $5,000,000, the Selling Parties shall
earn One Hundred Twenty-Five Thousand (125,000) shares of common stock. The Closing of the transaction occurred on March 11, 2020.
As of the date of this filing, the Company has received the 238,750 shares of restricted common stock valued at $477,500 due under
the terms of the Agreement. The shares were subsequently transferred to the principal of Jetco Holdings, LLC as payment against
the November 30, 2019 convertible note. Please see NOTE F - NOTES PAYABLE, THIRD PARTIES for further information.
Our
wholly owned subsidiaries:
About
TCBM Holdings, LLC
TCBM
Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation,
which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About
HMNRTH, LLC
HMNRTH,
LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store
selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle
and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating
an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most
importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN. The Company’s
ecommerce website can be found at www.hmnrth.com.
In
order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through
the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar
CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have
the required capital to move forward with any of the options and there is no guarantee that we will be able to raise the required funds.
About
911 Help Now, LLC
911
Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company
of intellectual property in the safety and security space. At present, we own no intellectual
property within our 911 subsidiary. In order to generate future revenue within 911, we will need to identify and either acquire
or license intellectual property. In the event of an acquisition, we will then need to either develop products utilizing our intellectual
property or license out our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition
or licensing of any intellectual property.
About
Markets on Main, LLC
Markets
on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is A full service, sales
and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus is on bringing
small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services to its clients:
inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer service. MOM’s
website can be found at www.marketsonmain.com.
Consultants
On
January 2, 2020, the Company entered into a Consulting Agreement (the “Agreement”) with Timothy Cabrera (the “Consultant”).
Under the terms of the Agreement, the Consultant is to provide services to further the business plan of the Company’s subsidiaries,
seek and advise the Company on the acquisition of potential products, seek acquisition candidates and on the sale of any inventory.
The Agreement has a term of one (1) year and the Consultant is to be compensated Two Hundred Fifty Thousand and NO/100 Dollars
($250,000).
On January 2, 2020, the Company entered
into a Consulting Agreement (the “Agreement”) with Brian McFadden (the “Consultant”). Under the terms
of the Agreement, the Consultant is to provide services to manage the Company’s HMNRTH subsidiary, manage the process of
new CBD formulas from development to sale, seek and advise the Company on the acquisition of potential products and on the sale
of any inventory. The Agreement has a term of one (1) year and the Consultant is to be compensated Two Hundred Fifty Thousand
and NO/100 Dollars ($250,000).
On August 22, 2019, the Company entered
into a Consulting Agreement (the “Agreement”) with Sylios Corp (the “Consultant”), an entity controlled
by the Company’s President, Jimmy Wayne Anderson. Under the terms of the Agreement, the Consultant is to provide services
related to acquisitions, mergers and certain day to day tasks of managing a public company. As compensation, the Company shall
pay Consultant $50,000 through the issuance of ten (10) shares of the Company’s Series L Preferred Stock. The Company issued
the shares of Series L Preferred Stock on September 2, 2019. The Agreement has a term of six (6) months or until the Consultant
completes the services requested.
REVENUE
For the nine months ended March 31, 2020 and years ended June 30,
2019 and 2018, we had $548,350, $0 and $0 in revenue. Our revenue for the nine months ended March 31, 2020 was comprised of the
sale of inventory through our subsidiary, HMNRTH, LLC.
RESEARCH
AND DEVELOPMENT
For
the twelve months ended June 30, 2019 and 2018 and nine months ended March 31, 2020, we had $0, $0 and $0 research
and development costs, respectively.
Employees
Currently,
Global Technologies has one part-time employee who devotes approximately 10-15 hours per week to the Company’s operations.
We intend on retaining additional officers, ancillary staff and consultants during the calendar year 2020
as our operational subsidiaries further their business plans.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Form 10 contains forward-looking statements that may be affected by matters outside our control that could cause materially different
results.
These
statements express, or are based on, our expectations about future events. Forward-looking statements give our current expectations
or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology,
such as, “may”, “will”, “expect”, “intend”, “project”, “estimate”,
“anticipate”, “believe” or “continue” or the negative thereof or similar terminology. They
include statements regarding our:
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amount,
nature and timing of capital expenditures,
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cash
flow and anticipated liquidity,
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future
operations of unknown nature costs,
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acquisition
and development of other technology,
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future
demand for any products and services acquired,
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operating
costs and other expenses.
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Although
we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give
no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks
and uncertainties. Factors that could cause actual results to differ materially from expected results are described under “Risk
Factors” and include:
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general
economic conditions,
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our
cost of operations,
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our
ability to generate sufficient cash flows to operate,
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availability
of capital,
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the
strength and financial resources of our competitors,
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our
ability to find and retain skilled personnel,
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the
lack of liquidity of our common stock,
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Various
risks related to health epidemics, pandemics and similar outbreaks, such as the coronavirus disease 2019 (“COVID-19”)
pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows,
and
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Our
ability to take advantage of opportunities under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act,
and the potential impact of the CARES Act on our business, results of operations, financial condition or liquidity.
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Any
of the factors listed above and other factors contained in this Form 10 could cause our actual results to differ materially from
the results implied by these or any other forward-looking statements made by us or on our behalf. We cannot assure you that our
future results will meet our expectations. When you consider these forward-looking statements, you should keep in mind these risk
factors and the other cautionary statements in this Form 10. Our forward-looking statements speak only as of the date made.
Our
Business Plan
Our
business plan is to operate through our wholly owned subsidiaries for the foreseeable future, while seeking potential acquisition,
joint venture and merger candidates.
Our
wholly owned subsidiaries:
About
TCBM Holdings, LLC
TCBM
Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation,
which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About
HMNRTH, LLC
HMNRTH,
LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store
selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle
and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating
an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most
importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN. The Company’s
ecommerce website can be found at www.hmnrth.com.
In order for the Company to generate revenue
through HMNRTH, we will need to: (i) produce additional inventory for retail sales through the Company’s ecommerce site
or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar CBD retail outlets, or (iv) generate
additional CBD formulas to be utilized in new products At present, the Company does not have the required capital to initiate
any of the options and there is no guarantee that we will be able to raise the required funds.
About
911 Help Now, LLC
911
Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company
of intellectual property in the safety and security space. At present, we own no intellectual property within our 911 subsidiary.
In order to generate future revenue within 911, we will need to identify and either acquire or license intellectual property.
In the event of an acquisition, we will then need to either develop products utilizing our intellectual property or license out
our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition or licensing
of any intellectual property.
About
Markets on Main, LLC
Markets
on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is A full service,
sales and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus
is on bringing small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services
to its clients: inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer
service. MOM’s website can be found at www.marketsonmain.com.
Potential
Future Acquisitions
In
implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another company or entity. We may also acquire stock or assets of an existing business.
Upon consummation of a transaction, it is probable that our present management and stockholders will no longer be in control of
us. In addition, our sole director may, as part of the terms of the acquisition transaction, resign and be replaced by new directors
without a vote of our stockholders, or sell his stock in us. Any such sale will only be made in compliance with the securities
laws of the United States and any applicable state.
It
is anticipated that any securities issued in any such acquisition would be issued in reliance upon exemption from registration
under application federal and state securities laws. In some circumstances, as a negotiated element of the transaction, we may
agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter.
If such registration occurs, it will be undertaken by the surviving entity after it has successfully consummated a merger or acquisition
and is no longer considered an inactive company.
The
issuance of substantial additional securities and their potential sale into any trading market which may develop in our securities
may have a depressive effect on the value of our securities in the future. There is no assurance that such a trading market will
develop.
While
the actual terms of a transaction cannot be predicted, it is expected that the parties to any business transaction will find it
desirable to avoid the creation of a taxable event and thereby structure the business transaction in a so-called “tax-free”
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code (the “Code”). In order to obtain tax-free
treatment under the Code, it may be necessary for the owner of the acquired business to own 80% or more of the voting stock of
the surviving entity. In such event, our stockholders would retain less than 20% of the issued and outstanding shares of the surviving
entity. This would result in significant dilution in the equity of our stockholders.
As
part of our investigation, we expect to meet personally with management and key personnel, visit and inspect material facilities,
obtain independent analysis of verification of certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of our limited financial resources and management expertise. The
manner in which we participate in an opportunity will depend on the nature of the opportunity, the respective needs and desires
of both parties, and the management of the opportunity.
With
respect to any merger or acquisition, and depending upon, among other things, the target company’s assets and liabilities,
our stockholders will in all likelihood hold a substantially lesser percentage ownership interest in us following any merger or
acquisition. The percentage ownership may be subject to significant reduction in the event we acquire a target company with assets
and expectations of growth. Any merger or acquisition can be expected to have a significant dilutive effect on the percentage
of shares held by our stockholders.
We
will participate in a business opportunity only after the negotiation and execution of appropriate written business agreements.
Although the terms of such agreements cannot be predicted, generally we anticipate that such agreements will (i) require specific
representations and warranties by all of the parties; (ii) specify certain events of default; (iii) detail the terms of closing
and the conditions which must be satisfied by each of the parties prior to and after such closing; (iv) outline the manner of
bearing costs, including costs associated with the Company’s attorneys and accountants; (v) set forth remedies on defaults;
and (vi) include miscellaneous other terms.
As
stated above, we will not acquire or merge with any entity which cannot provide independent audited financial statements within
a reasonable period of time after closing of the proposed transaction. If such audited financial statements are not available
at closing, or within time parameters necessary to insure our compliance within the requirements of the 1934 Act, or if the audited
financial statements provided do not conform to the representations made by that business to be acquired, the definitive closing
documents will provide that the proposed transaction will be voidable, at the discretion of our present management. If such transaction
is voided, the definitive closing documents will also contain a provision providing for reimbursement for our costs associated
with the proposed transaction.
There
are no guarantees that we will be successful in Closing any additional acquisitions or mergers.
Competition
We
believe we are an insignificant participant among the firms, which engage in the acquisition of business opportunities. There
are many established venture capital and financial concerns that have significantly greater financial and personnel resources
and technical expertise than we have. In view of our limited financial resources and limited management availability, we will
continue to be at a significant competitive disadvantage compared to our competitors.
In
reference to our subsidiary 911 Help Now (“911”), the Personal Emergency
Response marketplace is a large and fragmented market, which has many competitors with larger financial resources than
us. Our differentiating factor in this space is our no monthly fee sales model. At present, we own no intellectual property
within our 911 subsidiary. In order to generate future revenue within 911, we will need to identify and either acquire or license
intellectual property. In the event of an acquisition, we will then need to either develop products utilizing our intellectual
property or license out our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition
or licensing of any intellectual property.
In
reference to our subsidiary HMNRTH (“HMNRTH”), the
market for the sale of CBD-based products is fragmented and intensely competitive. Currently, in the United States, we do not
believe that there are any businesses that can demonstrate or claim a dominant market share of the growing CBD products
market. Our competitors in the retail location sales of CBD-based products include Green Roads, PlusCBD, and Select
CBD, and in the digital space include Diamond CBD, CBDistillery, and Lazarus Natural. We expect that the quantity and composition
of the competitive environment will continue to evolve as the industry matures and new customers enter the marketplace. In
order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through
the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar
CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have
the required capital to move forward with any of the options and there is no guarantee that we will be able to raise the required funds.
In
reference to our newly formed business operation through our subsidiary Markets on Main (“MOM”), the Company’s
goal is to become a leader in sales and distribution of entrepreneur driven products, in a highly competitive industry. We compete
with companies from all industries, some of which have substantially more resources, stronger name recognition, and longer operating
histories than us, and which benefit from greater economies of scale.
We
target products that leverage some sort of intellectual property that we may own or license from the entrepreneurs. Under
the Company’s business plan, we anticipate that certain of our licensors will have reserved the right
to manufacture, distribute and sell similar or identical products. Some of these products could directly compete with our products
and could be sold to our customers or directly to consumers at lower prices than those at which our products are sold. Our competitors
for MOM include Funko, Inc. and Edison Nation, Inc. to name a few. We anticipate generating revenue through MOM during
the current fiscal quarter through our fulfillment relationships with QVC and TBD Safety.
Investment
Company Act 1940
Although
we will be subject to regulation under the Securities Act of 1933, as amended, and the 1934 Act, we believe we will not be subject
to regulation under the Investment Company Act of 1940 (the “1940 Act”) insofar as we will not be engaged in the business
of investing or trading in securities. In the event we engage in business combinations that result in us holding passive investment
interests in a number of entities, we could be subject to regulation under the 1940 Act. In such event, we would be required to
register as an investment company and incur significant registration and compliance costs. We have obtained no formal determination
from the SEC as to our status under the 1940 Act and, consequently, any violation of the 1940 Act would subject us to material
adverse consequences. We believe that, currently, we are exempt under Regulation 3a-2 of the 1940 Act.
Intellectual
Property
We
own no intellectual property.
Factors
Effecting Future Performance
Rather
than an operating business, our goal is to obtain debt and/or equity financing to meet our ongoing operating expenses and attempt
to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock
to create value for our shareholders.
Although
there is no assurance that this series of events will be successfully completed, we believe we can successfully complete an acquisition
or merger which will enable us to continue as a going concern. Any acquisition or merger will most likely be dilutive to our existing
stockholders.
The
factors affecting our future performance are listed and explained below under the section “Risk Factors” below:
Item
1A. Risk Factors.
You
should carefully consider the risks described below and other information in this prospectus, including the financial statements
and related notes that appear at the end of this prospectus, before deciding to invest in our securities. These risks should be
considered in conjunction with any other information included herein, including in conjunction with forward-looking statements
made herein. If any of the following risks actually occur, they could materially adversely affect our business, financial condition,
operating results or prospects. Additional risks and uncertainties that we do not presently know or that we currently deem immaterial
may also impair our business, financial condition, operating results and prospects.
Risks
Relating to Our Company
We
have incurred significant losses and anticipate future losses.
As
of March 31, 2020, we had an accumulated deficit of $161,170,512 and a stockholders’ deficit of approximately
$1,742,161.
Future
losses are likely to occur as, until we are able to merge with another entity with experienced management and opportunities for
growth in return for shares of our common stock to create value for our shareholders as we have no sources of income to meet our
operating expenses. As a result of these, among other factors, we received from our registered independent public accountants
in their report for the financial statements for the years ended June 30, 2019 and 2018, an explanatory paragraph stating that
there is substantial doubt about our ability to continue as a going concern.
Our
existing financial resources are insufficient to meet our ongoing operating expenses.
We
have no sources of income at this time and no existing cash balances to meet our ongoing operating expenses. In the short term,
unless we are able to raise additional debt and/or equity we shall be unable to meet our ongoing operating expenses. On a longer-term
basis, we intend to raise the debt and/or equity to meet our ongoing operating expenses and merge with another entity with experienced
management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can
be no assurance that this series of events will be successfully completed.
Scarcity
of, and competition for, business opportunities and combinations.
We
believe we are an insignificant participant among the firms which engage in the acquisition of business opportunities. There are
many established venture capital and financial concerns that have significantly greater financial and personnel resources and
technical expertise than we have. Nearly all such entities have significantly greater financial resources, technical expertise
and managerial capabilities than us and, consequently, we will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination. Moreover, we will also compete in seeking merger or acquisition
candidates with numerous other small public companies. In view of our limited financial resources and limited management availability,
we will continue to be at a significant competitive disadvantage compared to our competitors.
We
may be negatively affected by adverse general economic conditions.
Current
conditions in domestic and global economies are extremely uncertain. Adverse changes may occur as a result of softening global
economies, wavering consumer confidence caused by the threat of terrorism and war, and other factors capable of affecting economic
conditions. Such changes could have a material adverse effect on our business, financial condition, and results of operations.
Because
our principal shareholder controls our activities, he may cause us to act in a manner that is most beneficial to himself and not
to other shareholders which could cause us not to take actions that outside investors might view favorably.
Our
principal shareholder, our sole officer and director, has voting authority for ninety six percent (96%) of our outstanding common
stock. As a result, he effectively controls all matters requiring stockholder approval, including the election of directors, the
approval of significant corporate transactions, such as mergers and related party transaction. These insiders also have the ability
to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership
could have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably.
Our
director may have conflicts of interest which may not be resolved favorably to us.
Certain
conflicts of interest may exist between our sole director and us. Our sole Director has other business interests to which he devotes
his attention and may be expected to continue to do so although management time should be devoted to our business. As a result,
conflicts of interest may arise that can be resolved only through exercise of such judgment as is consistent with fiduciary duties
to us. See “Directors and Executive Officers” (page 30 below), and “Conflicts of Interest.” (page 30 below).
We
may depend upon outside advisors; who may not be available on reasonable terms and as needed.
To
supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts,
appraisers, attorneys, or other consultants or advisors. Our Board without any input from stockholders will make the selection
of any such advisors. Furthermore, it is anticipated that such persons may be engaged on an “as needed” basis without
a continuing fiduciary or other obligation to us. In the event we consider it necessary to hire outside advisors, we may elect
to hire persons who are affiliates, if they are able to provide the required services.
We
are not a reporting company at this time, but will become one due to the filing of this Registration Statement on Form 10-12G.
Upon
the successful filing of this Form 10-12G, we will be subject to the reporting requirements under the Securities and Exchange
Act of 1934. As a result, shareholders will have access to the information required to be reported by publicly held companies
under the Exchange Act and the regulations thereunder. We intend to provide our shareholders with quarterly unaudited reports
and annual reports containing financial information prepared in accordance with generally accepted accounting principles audited
by independent certified public accountants and intend to register under the Securities Exchange Act, Section12(g). There can
be no assurance that we shall be able to file this Form 10–12G successfully or that we shall become a reporting company.
We
may not be able to meet the filing and internal control reporting requirements imposed by the Securities and Exchange Commission,
which may result in a decline in the price of our common shares and an inability to obtain future financing.
As
directed by Section 404 of the Sarbanes-Oxley Act, as amended by SEC Release No. 33-8934 on June 26, 2008, the SEC adopted rules
requiring each public company to include a report of management on the company’s internal controls over financial reporting
in its annual reports. In addition, the independent registered public accounting firm auditing a company’s financial statements
may have to also attest to and report on management’s assessment of the effectiveness of the company’s internal controls
over financial reporting. We may be required to include a report of management on its internal control over financial reporting.
The internal control report must include a statement
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Of
management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;
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Of
management’s assessment of the effectiveness of its internal control over financial reporting as of year-end; and
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Of
the framework used by management to evaluate the effectiveness of our internal control over financial reporting.
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Furthermore,
our independent registered public accounting firm may be required to file its attestation on whether it believes that we have
maintained, in all material respects, effective internal control over financial reporting.
While
we expect to expend significant resources in developing the necessary documentation and testing procedures required by Section
404 of the Sarbanes-Oxley Act, there is a risk that we may not be able to comply timely with all of the requirements imposed by
this rule. In the event that we are unable to receive a positive attestation from our independent registered public accounting
firm with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements
and our stock price and ability to obtain equity or debt financing as needed could suffer.
In
addition, in the event that our independent registered public accounting firm is unable to rely on our internal controls in connection
with its audit of our financial statements, and in the further event that it is unable to devise alternative procedures in order
to satisfy itself as to the material accuracy of our financial statements and related disclosures, it is possible that we would
be unable to file our Annual Report on Form 10-K with the SEC, which could also adversely affect the market price of our common
stock and our ability to secure additional financing as needed.
Reporting
requirements under the Exchange Act and compliance with the Sarbanes-Oxley Act of 2002, including establishing and maintaining
acceptable internal controls over financial reporting, are costly and may increase substantially.
The
rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will
require that the Company engage legal, accounting, auditing and other professional services. The engagement of such services is
costly. Additionally, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that
we design, implement and maintain adequate internal controls and procedures over financial reporting. The costs of complying with
the Sarbanes-Oxley Act and the limited technically qualified personnel we have may make it difficult for us to design, implement
and maintain adequate internal controls over financial reporting. In the event that we fail to maintain an effective system of
internal controls or discover material weaknesses in our internal controls, we may not be able to produce reliable financial reports
or report fraud, which may harm our overall financial condition and result in loss of investor confidence and a decline in our
share price.
As
a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank
Act of 2010 and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance
with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more
difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things,
that we file annual, quarterly, and current reports with respect to our business and operating results.
We
are working with our legal, accounting and financial advisors to identify those areas in which changes should be made to our financial
and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance,
corporate control, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue
to make, changes in these and other areas. However, we anticipate that the expenses that will be required in order to adequately
prepare for being a public company could be material. We estimate that the aggregate cost of increased legal services; accounting
and audit functions; personnel, such as a chief financial officer familiar with the obligations of public company reporting; consultants
to design and implement internal controls; and financial printing alone will be a few hundred thousand dollars per year and could
be several hundred thousand dollars per year. In addition, if and when we retain independent directors and/or additional members
of senior management, we may incur additional expenses related to director compensation and/or premiums for directors’ and
officers’ liability insurance, the costs of which we cannot estimate at this time. We may also incur additional expenses
associated with investor relations and similar functions, the cost of which we also cannot estimate at this time. However, these
additional expenses individually, or in the aggregate, may also be material.
In
addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including
directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or
incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult
for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
The
increased costs associated with operating as a public company may decrease our net income or increase our net loss and may cause
us to reduce costs in other areas of our business or increase the prices of our products or services to offset the effect of such
increased costs. Additionally, if these requirements divert our management’s attention from other business concerns, they
could have a material adverse effect on our business, financial condition and results of operations.
The
Jobs Act allows us to delay the adoption of new or revised accounting standards that have different effective dates for public
and private companies.
Since,
we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1)
of the JOBS Act, this election allows us to delay the adoption of new or revised accounting standards that have different effective
dates for public and private companies until those standards apply to private companies. As a result of this election, our financial
statements may not be comparable to companies that comply with public company effective dates.
We
have material weakness in our controls and procedures.
We
have conducted an evaluation of our internal control over financial reporting based on the framework in “Internal Control
Integrated Framework” issued by the Committee of Sponsoring Organizations for the Treadway Commission (“COSO”)
and published in 2013, and subsequent guidance prepared by COSO specifically for smaller public companies. Based on that evaluation,
management concluded that our internal control over financial reporting was not sufficient as of June 30, 2019 and 2018, and March
31, 2020 for the reasons discussed below:
A
significant deficiency is a deficiency, or combination of deficiencies in internal control over financial reporting, that adversely
affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance
with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s
financial statements that is more than inconsequential will not be prevented or detected by the entity’s internal control.
A
material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such
that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements
will not be prevented or detected on a timely basis.
Management
identified the following material weakness and significant deficiencies in its assessment of the effectiveness of internal control
over financial reporting as of June 30, 2019 and March 31, 2020:
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The
Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked personnel
with accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements.
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Material
Weakness – Inadequate segregation of duties.
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The
management of the Company believes that these material weaknesses will remain until such time that the Company has the resources
to increase the number of personnel committed to the performance of its financial duties that such weaknesses can be specifically
addressed. This will include, but not limited to, the following:
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Hiring
of additional personnel to adequately segregate financial reporting duties.
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The
retention of outside consultants to review our controls and procedures
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General
Business Risks
Conflicts
of interest may arise from other business activities of our directors and officers.
Our
sole officer and director, Jimmy Wayne Anderson, currently serves in the role as President and Chairman of another publicly traded
entity, Sylios Corp (a fully-reporting company “UNGS” on the OTC Markets “PINK”). Mr. Anderson also serves
as the President and Chairman of AMDAQ Corp, a spin-off of Sylios Corp. As such, Mr. Anderson may not be able to dedicate
the required time to the Company to further its operations.
We
are highly dependent on the services of key executives, the loss of whom could materially harm our business and our strategic
direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other
personnel or experience increases in our compensation costs, our business may materially suffer.
We
are highly dependent on our management team, specifically Jimmy Wayne Anderson, who we currently anticipate will be
able to devote 10-15 hours per week to the Company’s operations. If we lose key employees, our business may suffer.
Furthermore, our future success will also depend in part on the continued service of our management personnel and our ability
to identify, hire, and retain additional key personnel. We do not carry “key-man” life insurance on the lives of any
of our executives, employees or advisors. We experience intense competition for qualified personnel and may be unable to attract
and retain the personnel necessary for the development of our business. Because of this competition, our compensation costs may
increase significantly.
We
will need to raise additional capital to continue operations over the coming year.
We
anticipate the need to raise approximately $1,000,000 in capital to fund our operations through December 31, 2020. We expect to
use these cash proceeds, primarily to identify new business opportunities and possible acquisitions. We cannot guarantee that
we will be able to raise these required funds or generate sufficient revenue to remain operational.
We
may be unable to manage growth, which may impact our potential profitability.
Successful
implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management
and financial resources. To manage growth effectively, we will need to:
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Establish
definitive business strategies, goals and objectives;
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Maintain
a system of management controls; and
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Attract
and retain qualified personnel, as well as, develop, train and manage management-level and other employees.
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If
we fail to manage our growth effectively, our business, financial condition or operating results could be materially harmed, and
our stock price may decline.
Our
lack of adequate D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and
officers.
We
may in the future be subject to additional litigation, including potential class action and stockholder derivative actions. Risks
associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for
significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance.
While neither Delaware law nor our Articles of Incorporation or bylaws require us to indemnify or advance expenses to our
officers and directors involved in such a legal action, we have entered into an indemnification agreement with our President and
intend to enter into similar agreements with other officers and directors in the future. Without adequate D&O insurance, the
amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to
the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore,
our lack of adequate D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers,
which could adversely affect our business.
If
we are unable to maintain effective internal control over our financial reporting, the reputational effects could materially adversely
affect our business.
Under
the provisions of Section 404(a) of the Sarbanes-Oxley Act of 2002, as amended by the Dodd Frank Wall Street Reform and Consumer
Protection Act of 2010, the SEC adopted rules requiring public companies to perform an evaluation of Internal Control over Financial
Reporting (Internal Controls) and to report on our evaluation in our Annual Report on Form 10-K. Our Internal Controls constitute
a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements in accordance with GAAP. In the event we discover material weakness in our internal controls and our remediation of
such reported material weakness is ineffective, or if in the future we are unable to maintain effective Internal Controls, additional
resulting material restatements could occur, regulatory actions could be taken, and a resulting loss of investor confidence in
the reliability of our financial statements could occur.
We
expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate
financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to
manage our expenses.
We
estimate that it will cost approximately $50,000 annually to maintain the proper management and financial controls for our filings
required as a public reporting company. In addition, if we do not maintain adequate financial and management personnel, processes
and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline
in our stock price and adversely affect our ability to raise capital.
If
the registration of our common stock is revoked in the future, our business opportunities will cease to exist.
In
the event our securities registration was to be revoked, we would not have the ability to raise money through the issuance of
shares and would lose the ability to continue the business plan set out in this filing. Common stock issued and outstanding at
that time would no longer be tradable.
Our
business operations have been and may continue to be materially and adversely affected by the outbreak of the novel respiratory
illness coronavirus (“COVID-19”).
On
March 11, 2020, the World Health Organization declared the outbreak of the novel respiratory illness COVID-19 a pandemic. The
new strain of COVID-19 is considered to be highly contagious and poses a serious public health threat.
Any
outbreak of such epidemic illness or other adverse public health developments may materially and adversely affect the global economy,
our markets and our business.
We
cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can we predict the severity and duration of
its impact. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition
may be materially and adversely affected as a result of the deteriorating market outlook for retail and online sales, the
slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors
that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall
business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that
we cannot predict and materially and adversely impact our business, financial condition and results of operations.”
Our
ability to use our net operating loss carry-forwards and certain other tax attributes may be limited.
We
have incurred substantial losses during our history. To the extent that we continue to generate taxable losses, unused losses
will carry forward to offset future taxable income, if any, until such unused losses expire. Under Sections 382 and 383 of the
Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as
a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use
its pre-change net operating loss carry-forwards, or NOLs, and other pre-change tax attributes (such as research tax credits)
to offset its post-change income may be limited. We may experience ownership changes in the future as a result of subsequent shifts
in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carry-forwards
to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability
to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which
could accelerate or permanently increase state taxes owed.
Risks
Associated with Our Subsidiary, HMNRTH, LLC
All strains of cannabis other than
hemp remain illegal under Federal law.
Despite the development of a legal cannabis
industry under the laws of certain states and the legalization of hemp under the Agriculture Improvement Act of 2018, the state
laws legalizing medical and adult cannabis use are in conflict with the Federal Controlled Substances Act, which classifies cannabis
as a “Schedule-I” controlled substance and makes cannabis use and possession illegal on a national level. The United
States Supreme Court has ruled that the Federal government has the right to regulate and criminalize cannabis, even for medical
purposes, and thus Federal law criminalizing the use of cannabis preempts state laws that legalize its use. However, the Obama
Administration determined that it is not an efficient use of resources to direct Federal law enforcement agencies to prosecute
those lawfully abiding by state laws allowing the use and distribution of medical and recreational cannabis. There is no guarantee
that the Trump Administration will not change the Federal government’s stated policy regarding the low-priority enforcement
of Federal laws in states where cannabis has been legalized. Any such change in the Federal government’s enforcement of
Federal laws could cause significant financial damage to us and our shareholders.
Laws and regulations affecting the
medical marijuana industry are constantly changing, which could detrimentally affect our proposed operations.
Local, state and federal medical marijuana
laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs
associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations,
could disrupt our business and result in a material adverse effect on our operations. In addition, it is possible that regulations
may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future
laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative
policies and procedures, when and if promulgated, could have on our business.
Until
we have developed and launched our products at commercial levels, there is uncertainty of market acceptance and the efficacy of
the commercialization strategy.
While
we have launched the sale of our CBD products on our ecommerce website, natural, hemp-based consumer products are new to
the marketplace and it is not yet determined whether such products will gain consumer acceptance. Until we have consistent, proven
sales, there is uncertainty of product acceptance in the intended markets and our ability to commercialize our products. As with
any transformational product, there will be a time before customers embrace the product and recognize its full value. If there
are no, or only low levels of, product acceptance and sales, we may have to alter our business plan. As is typical of any new
business concept, demand and market acceptance for newly introduced products and services is subject to great uncertainty. Achieving
market acceptance will require us to undertake substantial marketing efforts and to make significant expenditures to create awareness
of and demand for our products. We have limited marketing experience and limited financial, personnel and other resources to undertake
extensive marketing activities. Our efforts will be subject to all of the risks associated with the commercialization of new products,
including unanticipated delays, expenses and the evolution of industry standards. There can be no assurance that markets for our
products will not be limited, or that our strategies will result in successful product commercialization or in initial or continued
market acceptance for our products.
Due
to controversy over the cannabis plant within the United States, we face challenges getting our products into stores.
Some
of our products are intended for ingestion purposes. There are potential significant health benefits to consuming hemp-based products,
however, all products derived from the cannabis plant are controversial. Our products contain only trace amounts of THC and are
below the legal limit for ingestion within the U.S. However, we anticipate that we may face scrutiny and experience resistance
in getting our products into stores due to hesitation by food chains to carry any product even affiliated with the cannabis plant.
There
is limited availability of clinical studies.
Although
industrial hemp has a long history of human consumption, and the Company believes all of its products to be safe when taken as
directed by the Company, there is little long-term experience with human consumption of certain of these innovative product ingredients
or combinations thereof in concentrated form. Although the Company performs research and/or tests the formulation and production
of its products, there is limited clinical data regarding the safety and benefits of ingesting industrial hemp-based products.
Any instance of illness or negative side effects of ingesting industrial hemp-based products would have a material adverse effect
on our business and operations.
We
face substantial risk of product liability claims and potential adverse product publicity.
Like
any other retailer, distributor or manufacturer of products that are designed to be ingested, we face an inherent risk of exposure
to product liability claims in the event that the use of our products results in injury. In the event we do not have adequate
insurance or contractual indemnification, product liability claims could have a material adverse effect on the Company. The Company
is not currently a named defendant in any product liability lawsuit; however, other manufacturers and distributors of nutritional
supplements currently are or have been named as defendants in such lawsuits. The successful assertion or settlement of any uninsured
claim, a significant number of insured claims, or a claim exceeding the Company’s insurance coverage could have a material
adverse effect on the Company.
Government
regulation of cannabis and hemp is constantly evolving, and unfavorable developments could have an adverse effect on our operating
results.
Any
changes in laws or regulations relating to cannabis and hemp could adversely affect our business, results of operations and our
business prospects.
Risks
Associated with Our Subsidiary, Markets on Main, LLC
An
inability to develop and introduce products in a timely and cost-effective manner may damage our business.
Our
sales and profitability depend on our ability to bring products to market to meet customer demands and before consumers begin
to lose interest in a given property. There is no guarantee that we will be able to manufacture, source and ship new or continuing
products in a timely manner and on a cost-effective basis to meet constantly changing consumer demands. This risk is heightened
by our customers’ increasingly compressed shipping schedules and the seasonality of our business. Moreover, unforeseen delays
or difficulties in the development process, significant increases in the planned cost of development, manufacturing delays or
changes in anticipated consumer demand for our products and new brands may cause the introduction date for products to be later
than anticipated, may reduce or eliminate the profitability of such products or, in some situations, may cause a product or new
brand introduction to be discontinued.
Our
success will depend on the reliability and performance of third-party distributors, manufacturers and suppliers.
We
compete with other companies for the production capacity of third-party suppliers for components. Certain of these competing companies
have substantially greater financial and other resources than we have, and we may be at a competitive disadvantage in seeking
to procure production capacity. Our inability to contract with third-party manufacturers and suppliers to provide a sufficient
supply of our products on acceptable terms and on a timely basis could negatively impact our relationships with existing customers
and cause us to lose revenue-generating opportunities with potential customers. We also rely on operators and distributors to
market and distribute our products. If our operators or distributors are unsuccessful, we may miss revenue-generating opportunities
that might otherwise have been recognized.
We
are increasingly dependent on information technology, and potential cyberattacks, security problems or other disruption and expanding
social media vehicles present new risks.
We
rely on information technology networks and systems, including the internet, to process, transmit and store electronic information,
and to manage or support a variety of business processes, including financial transactions and records, billing and operating
data. We may purchase some of our information technology from vendors, on whom our systems will depend, and we rely on commercially
available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential
operator and other customer information. We depend upon the secure transmission of this information over public networks. Our
networks and storage applications could be subject to unauthorized access by hackers or others through cyberattacks, which are
rapidly evolving and becoming increasingly sophisticated, or by other means, or may be breached due to operator error, malfeasance
or other system disruptions. In some cases, it will be difficult to anticipate or immediately detect such incidents and the damage
they cause. Any significant breakdown, invasion, destruction, interruption or leakage of information from our systems could harm
our reputation and business.
In
addition, the use of social media could cause us to suffer brand damage or information leakage. Negative posts or comments about
us on any social networking website could damage our or our brands’ reputations. Employees or others might disclose non-public
sensitive information relating to our business through external media channels, including through the use of social media. The
continuing evolution of social media will present us with new challenges and risks.
Defects
in products we develop internally or for clients could reduce our revenue, increase our costs, burden our engineering and marketing
resources, involve us in litigation and adversely affect us.
Our
success will depend on our ability to avoid, detect and correct defects in our products. We may not be able to maintain products
that are free from defects. Although we have taken steps to prevent defects, our products could suffer such defects. The occurrence
of such defects or malfunctions could result in physical harm to the patrons of our customers and the subsequent termination of
agreements, cancellation of orders, product returns and diversion of our resources. Even if our customers do not suffer financial
losses, customers may replace our products if they do not perform according to expectations. Any of these occurrences could also
result in the loss of or delay in market acceptance of our products and/or loss of sales. In addition, the occurrence of defects
in our products may give rise to claims for lost revenues and related litigation by our customers and may subject us to investigation
or other disciplinary action by regulatory authorities that could include suspension or revocation of our ability to do business
in certain jurisdictions.
Our
success depends, in part, on our ability to successfully manage our future inventories.
We
must maintain sufficient inventory levels to operate our business successfully, but we must also avoid accumulating excess inventory,
which increases working capital needs and lowers gross margin. We must typically order our CBD products well in advance of the
time these products will be offered for sale to our customers. As a result, it may be difficult to respond to changes in consumer
preferences and market conditions, which, for pop culture products, can change rapidly. If we do not accurately anticipate the
popularity of certain products, then we may not have sufficient inventory to meet demand. Alternatively, if demand or future sales
do not reach forecasted levels, we could have excess inventory that we may need to hold for a long period of time, write down,
sell at prices lower than expected or discard. If we are not successful in managing our inventory, our business, financial condition
and results of operations could be adversely affected.
We
may also be negatively affected by changes in retailers’ inventory policies and practices. As a result of the desire of
retailers to more closely manage inventory levels, there is a growing trend to make purchases on a “just-in-time”
basis. This requires us to more closely anticipate demand and could require us to carry additional inventory. Policies and practices
of individual retailers may adversely affect us as well, including those relating to access to and time on shelf space, price
demands, payment terms and favoring the products of our competitors. Our retail customers make no binding long-term commitments
to us regarding purchase volumes and make all purchases by delivering purchase orders. Any retailer can therefore freely reduce
its overall purchase of our products, including the number and variety of our products that it carries, and reduce the shelf space
allotted for our products. If demand or future sales do not reach forecasted levels, we could have excess inventory that we may
need to hold for a long period of time, write down, sell at prices lower than expected or discard. If we are not successful in
managing our inventory, our business, financial condition and results of operations could be adversely affected.
An
inability to develop and introduce products in a timely and cost-effective manner may damage our business.
Our
sales and profitability for our CBD products depend on our ability to bring products to market to meet customer demands
before consumers begin to lose interest in a given property. There is no guarantee that we will be able to source our manufacturing
and ship new or continuing products in a timely manner or on a cost-effective basis to meet constantly changing consumer demands.
This risk is heightened by our customers’ increasingly compressed shipping schedules and the seasonality of our business.
These time constraints may lead our customers to reduce their demand for these products in order to minimize their inventory risk.
Moreover, unforeseen delays or difficulties in the development process, significant increases in the planned cost of development,
manufacturing or distribution delays or changes in anticipated consumer demand for our products and new brands, or the related
third party content, may cause the introduction date for new CBD products to be later than anticipated, may reduce or eliminate
the profitability of such products or, in some situations, may cause a product or new brand introduction to be discontinued.
Risk
to Our Common Stock
If
we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the
ability of broker-dealers to sell our securities in the secondary market.
Companies
trading on the Over the Counter Bulletin Board must be reporting issuers under Section 12 of the Securities Exchange Act of 1934,
as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC
Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability
of broker-dealers to sell our securities and the ability of stockholders
to sell their securities in the secondary market. In addition, we may be unable to get relisted on the OTC Bulletin Board, which
may have an adverse material effect on the Company.
Restrictions
on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule
144 is not available for the resale of securities initially issued by shell companies (other than business combination related
shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important
exception to this prohibition if the following conditions are met:
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the
issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the
issuer of the securities has filed all Exchange Act reports and materials required to be filed, as applicable, during the
preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than
Current Reports on Form 8-K; and
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at
least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its
status as an entity that is not a shell company.
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At
the present time, the Company is classified as a “shell company” under Rule 405 of the Securities Act. As such, all
restricted securities presently held by the founders of the Company may not be resold in reliance on Rule 144 until: (i) the Company
files Form 10 information with the SEC when it ceases to be a “shell company”; (ii) the Company has filed all reports
as required by Section 13 and 15(d) of the Securities Act for 12 consecutive months; and (iii) one (1) year has elapsed from the
time the Company files the current Form 10 type information with the SEC reflecting its status as an entity that is not a shell
company.
As
a result, our initial stockholders will be able to sell their founder shares and private placement warrants, as applicable, pursuant
to Rule 144 without registration one year after we have completed our initial business combination.
We
do not expect to pay dividends in the future; any return on investment may be limited to the value of our common stock.
We
do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will
depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors
may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital
base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare
and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole
discretion of our board of directors. If we do not pay dividends, our common stock may be less valuable because a return on your
investment will only occur if its stock price appreciates.
Authorization
of preferred stock.
Our
Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and
preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without
stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely
affect the voting power or other rights of the holders of the common stock. On July 16, 2019, the Company’s Board of Directors
approved the designation of two new series of preferred stock, Series K Super Voting Preferred Stock and Series L Preferred Stock.
On August 2, 2019, the Company issued three (3) shares of its Series K Super Voting Preferred Stock to its sole officer and director,
Jimmy Wayne Anderson.
On
September 2, 2019, the Company issued ten (10) shares of its Series L Preferred Stock to Sylios Corp, an entity controlled by
the Company’s sole officer and director. In the event of issuance of additional shares, the preferred stock could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. At present,
we have authorized 5,000,000 shares of Preferred Stock with 13, 0 and 0 shares outstanding at March 31, 2020, June 30,
2019 and 2018, respectively. Please see NOTE I - CAPITAL STOCK for further information.
The
market price for our common stock may be particularly volatile given our status as a relatively unknown company, with a limited
operating history and lack of profits which could lead to wide fluctuations in our share price. You may be unable to sell your
common stock at or above your purchase price, which may result in substantial losses to you.
Our
stock price may be particularly volatile when compared to the shares of larger, more established companies that trade on a national
securities exchange and have large public floats. The volatility in our share price will be attributable to a number of factors.
First, our common stock will be compared to the shares of such larger, more established companies, sporadically and thinly traded.
As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately
influence the price of those shares in either direction. The price for our shares could decline precipitously in the event that
a large number of shares of our common stock are sold on the market without commensurate demand. Second, we are a speculative
or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future
market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the
fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their
shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established
company that trades on a national securities exchange and has a large public float. Many of these factors are beyond our control
and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions
or projections as to what the prevailing market price for our common stock will be at any time. Moreover, the OTC Bulletin Board
is not a liquid market in contrast to the major stock exchanges. We cannot assure you as to the liquidity or the future market
prices of our common stock if a market does develop. If an active market for our common stock does not develop, the fair market
value of our common stock could be materially adversely affected.
Existing
stockholders will experience significant dilution from our sale of shares under potential Securities Purchase Agreements.
The
sale of shares pursuant to any Securities Purchase Agreements executed by the Company in the future will have a dilutive impact
on our stockholders. As a result, the market price of our common stock could decline significantly, as we sell shares pursuant
to the Securities Purchase Agreement. In addition, for any particular advance, we will need to issue a greater number of shares
of common stock under the Securities Purchase Agreement as our stock price declines. If our stock price is lower, then our existing
stockholders would experience greater dilution.
The
Company May Issue Shares of Preferred Stock with Greater Rights than Common Stock.
The
Company’s charter authorizes the Board of Directors to issue one or more series of preferred stock and set the terms of
the preferred stock without seeking any further approval from holders of the Company’s common stock. Any preferred stock
that is issued may rank ahead of the Company’s common stock in terms of dividends, priority and liquidation premiums and
may have greater voting rights than the Company’s common stock.
Being
a Public Company Significantly Increases the Company’s Administrative Costs.
The
Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and listing requirements subsequently adopted
by the NYSE Amex in response to Sarbanes-Oxley, have required changes in corporate governance practices, internal control policies
and audit committee practices of public companies. Although the Company is a relatively small public company, these rules, regulations,
and requirements for the most part apply to the same extent as they apply to all major publicly traded companies. As a result,
they have significantly increased the Company’s legal, financial, compliance and administrative costs, and have made certain
other activities more time consuming and costly, as well as requiring substantial time and attention of our senior management.
The Company expects its continued compliance with these and future rules and regulations to continue to require significant resources.
These rules and regulations also may make it more difficult and more expensive for the Company to obtain director and officer
liability insurance in the future and could make it more difficult for it to attract and retain qualified members for the Company’s
Board of Directors, particularly to serve on its audit committee.
Our
shares are subject to the U.S. “Penny Stock” Rules and investors who purchase our shares may have difficulty re-selling
their shares as the liquidity of the market for our shares may be adversely affected by the impact of the “Penny Stock”
Rules.
Our
stock is subject to U.S. “Penny Stock” rules, which may make the stock more difficult to trade on the open market.
Our common shares are not currently traded on the OTC Bulletin Board, but it is the Company’s plan that the common shares
be quoted on the OTC Bulletin Board. A “penny stock” is generally defined by regulations of the U.S. Securities and
Exchange Commission (“SEC”) as an equity security with a market price of less than US$5.00 per share. However, an
equity security with a market price under US $5.00 will not be considered a penny stock if it fits within any of the following
exceptions:
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(i)
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the
equity security is listed on NASDAQ or a national securities exchange;
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(ii)
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the
issuer of the equity security has been in continuous operation for less than three years, and either has (a) net tangible
assets of at least US $5,000,000, or (b) average annual revenue of at least US $6,000,000; or
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(iii)
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the
issuer of the equity security has been in continuous operation for more than three years and has net tangible assets of at
least US $2,000,000.
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Our
common stock does not currently fit into any of the above exceptions.
If
an investor buys or sells a penny stock, SEC regulations require that the investor receive, prior to the transaction, a disclosure
explaining the penny stock market and associated risks. Furthermore, trading in our common stock will be subject to Rule 15g-9
of the Exchange Act, which relates to non-NASDAQ and non-exchange listed securities. Under this rule, broker/dealers who recommend
our securities to persons other than established customers and accredited investors must make a special written suitability determination
for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. Securities are exempt from
this rule if their market price is at least $5.00 per share. Since our common stock is currently deemed penny stock regulations,
it may tend to reduce market liquidity of our common stock, because they limit the broker/dealers’ ability to trade, and
a purchaser’s ability to sell, the stock in the secondary market.
The
low price of our common stock has a negative effect on the amount and percentage of transaction costs paid by individual shareholders.
The low price of our common stock also limits our ability to raise additional capital by issuing additional shares. There are
several reasons for these effects. First, the internal policies of certain institutional investors prohibit the purchase of low-priced
stocks. Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased
on margin. Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced
stocks. Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than
commissions on higher priced stocks. As a result, the Company’s shareholders may pay transaction costs that are a higher
percentage of their total share value than if our share price were substantially higher.
Because
we can issue additional shares of common stock, purchasers of our common stock may incur immediate dilution and experience further
dilution.
We
are authorized to issue up to 14,991,000,000 shares of common stock, of which 12,189,293,609 shares of common stock are issued
and outstanding as of March 31, 2020 and June 30, 2019. Our Board of Directors has the authority to cause us to issue additional
shares of common stock and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders.
Consequently, the stockholders may experience more dilution in their ownership of our stock in the future. Please see NOTE-I
CAPITAL STOCK for further information.
A
reverse stock split may decrease the liquidity of the shares of our common stock.
The
liquidity of the shares of our common stock may be affected adversely by a reverse stock split given the reduced number of shares
that will be outstanding following a reverse stock split, especially if the market price of our common stock does not increase
as a result of the reverse stock split.
Following
a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors,
and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may
not improve.
Although
we believe that a higher market price of our common stock may help generate greater or broader investor interest, we cannot assure
you that a reverse stock split will result in a share price that will attract new investors.
You
may be diluted by conversions of the Company’s convertible notes and future conversions of the Company’s Series L
Preferred Stock.
As
of March 31, 2020, we had (i) outstanding Convertible Promissory Notes in an aggregate principal amount of $1,434,373,
which are convertible for up to 25,142,587,619 shares of our Class A Common Stock based on a closing stock price
of $0.0001 and inherit conversion features; (iii) 10 shares of Series L Preferred Stock outstanding, which are convertible
into 714,285,714 shares of our Class A Common Stock based on a closing stock price of $0.0001 and the inherit conversion
feature.
The
conversion of the Convertible Promissory Notes and Series L Preferred Stock will result in further dilution of your investment.
In addition, you may experience additional dilution if we issue common stock in the future. As a result of this dilution, you
may receive significantly less in net tangible book value than the full purchase price you paid for the shares in the event of
liquidation. As of the date of this filing, the Company does not have a sufficient number of authorized but unissued shares
to issue in the event our noteholders and the holder of our Series L Preferred stock were to elect to convert into shares of our
Class A Common Stock. The Company may be required to file an Amendment to its Articles of Incorporation to increase the number
of authorized shares of Class A Common Stock or to effect a reverse stock split to satisfy the requested conversions.
Issuances
of shares of common stock or securities convertible into or exercisable for shares of common stock following this offering, will
dilute your ownership interests and may adversely affect the future market price of our common stock.
The
issuance of additional shares of our common stock or securities convertible into or exchangeable for our common stock could be
dilutive to stockholders if they do not invest in future offerings. We may seek additional capital through a combination of private
and public offerings in the future.
The
Company’s shares of common stock are quoted on the OTC Pink Sheet market, which limits the liquidity and price of the Company’s
common stock.
The
Company’s shares of Common Stock are traded on the OTC Pink Sheet market under the symbol “GTLL.” Quotation
of the Company’s securities on the OTC Pink Sheet market limits the liquidity and price of the Company’s Common Stock
more than if the Company’s shares of Common Stock were listed on The Nasdaq Stock Market or a national exchange. There is
currently no active trading market in the Company’s Common Stock. There can be no assurance that there will be an active
trading market for the Company’s Common Stock following a business combination. In the event that an active trading market
commences, there can be no assurance as to the market price of the Company’s shares of Common Stock, whether any trading
market will provide liquidity to investors, or whether any trading market will be sustained.
FINRA
sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
The
Financial Industry Regulatory Authority, Inc. (“FINRA”) has adopted rules requiring that, in recommending an investment
to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior
to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable
efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.
Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced
securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities,
they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which
may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for
and price of our common stock.
We
are classified as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable
to smaller reporting companies will make our common stock less attractive to investors.
We
are a “smaller reporting company.” Specifically, “smaller reporting companies” are able to provide simplified
executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act
requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control
over financial reporting; and have certain other decreased disclosure obligations in their SEC filings.
Because
directors and officers currently and for the foreseeable future will continue to control Global Technologies, it is not likely
that you will be able to elect directors or have any say in the policies of the Company
Our
shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring
shareholder approval will be decided by majority vote. The directors, officers and affiliates of Global Technologies beneficially
own approximately 30% of our outstanding common stock either through direct ownership or through another class of capital stock
that may be convertible into shares of our common stock. Due to such significant ownership position held by our insiders, new
investors may not be able to effect a change in our business or management, and therefore, shareholders would have no recourse
as a result of decisions made by management. Our President, Jimmy Wayne Anderson, owns 900,000,000 shares of the Company’s
Class A Common Stock and 3 shares of Series K Super Voting Preferred stock. Sylios Corp, an entity controlled by Mr. Anderson,
owns 10 shares of Series L Preferred stock convertible into 714,285,714 at a stock price of $0.0001. Our President is also
the control person for one of the entities, Around the Clock Partners, LP (“ATC”), that holds a Convertible
Promissory Note issued by the Company. If the entire Note, in the amount of $124,800, were converted into shares of the
Company’s Class A Common Stock, the Company would be required to issue 3,120,000,000 shares. As of the date of this filing,
our President would have voting rights equal to 98,414,348,976 shares (900,000,000 shares of common, 48,757,174,488 votes through
the issuance of the Company’s Series L Preferred Stock and 48,757,174,488 votes through the issuance of the Company’s
Series K Preferred Stock for a total of 98,414,348,976 votes) out of a total of 109,703,642,585 votes available to vote on matters
brought before shareholders, or 89.70%. This total excludes shares issuable upon the conversion of the Note held by ATC.
Cautionary Note
We have sought to identify what we believe
to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized
nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such
risk factors before making an investment decision with respect to our common stock.
Item
2. Financial Information.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
This
registration statement on Form 10-12G and other reports filed by us from time to time with the SEC (collectively, the “Filings”)
contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available
to, our management as well as estimates and assumptions made by our management. Readers are cautioned not to place undue reliance
on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings,
the words “anticipate,” “believe,” “estimate,” “expect,” “future,”
“intend,” “plan,” or the negative of these terms and similar expressions as they relate to us or our management
identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to
risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations
and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions
prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United
States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our
financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments
and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments
and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities
as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented.
Our financial statements would be affected to the extent there are material differences between these estimates and actual results.
In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s
judgment in its application. There are also areas in which management’s judgment in selecting any available alternative
would not produce a materially different result. The following discussion should be read in conjunction with our financial statements
and notes thereto appearing elsewhere in this report.
The
following discussion of our financial condition and results of operations should be read in conjunction with our financial statements
and the notes to those statements included elsewhere in this prospectus. In addition to the historical financial information,
the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors,
including those set forth under “Risk Factors” and elsewhere in this prospectus.
Overview
Global
Technologies, Ltd is a publicly quoted shell company that was incorporated under the laws of the State of Delaware on January
20, 1999 under the name of NEW IFT Corporation. On August 13, 1999, the Company filed an Amended and Restated Certificate of Incorporation
with the State of Delaware to change the name of the corporation to Global Technologies, Ltd. Our principal executive offices
are located at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and our telephone number is (727) 482-1505. Our
website address is www.globaltechnologiesltd.info. The information contained on, or that can be accessed through, our website
is not a part of this Registration Statement. We have included our website address in this Registration Statement solely as an
inactive textual reference.
Prior
Operational History
From
inception until March 2011, Global Technologies was a technology portfolio company that acquired nascent technology and related
innovations, inventions and IP assets to enhance their growth and development. The Company built revenues and asset value through
a model of continuous growth, income from or sale of its portfolio holdings, and technology licensing or distribution agreements.
The
Company invested primarily in innovative and promising clean/renewable energy or bio-tech technologies that had reached the stage
in the critical Technology Development & Demonstration phase of the Innovative Cycle, which includes Prototype, Demonstration
and Market Analysis.
In
March 2011, the Company abandoned its operations. Mr. Jimmy Wayne Anderson, our sole officer and director, was appointed a director
of the Company in December 2017 and an officer in January 2018.
Current
Operations
Global
Technologies, Ltd (“Global”) is a holding corporation, which through its subsidiaries, has operations engaged in the
online sales of CBD and hemp related products, the acquisition of intellectual property in the safety and security space and as
a portal for entrepreneurs to provide immediate access to live shopping, e-commerce and product placement in brick and mortar
retail outlets.
On
November 30, 2019, the Company entered into a Purchase and Sale Agreement (the “Agreement”) for the purchase of TCBM
Holdings, LLC (“TCBM”). Under the terms of the Agreement, the Company issued a Convertible Promissory Note (the “Note”)
in the amount of $2,000,000 to Jetco Holdings, LLC for the purchase of all issued and outstanding membership units of TCBM and
its subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
On
March 11, 2020, the Company, through its two wholly owned subsidiaries, HMNRTH, LLC (the “Seller”) and TCBM Holdings,
LLC (the “Owner”) (together Seller and Owner the “Selling Parties”) entered into an Asset Purchase Agreement
(the “Agreement”) with Edison Nation, Inc. and its wholly owned subsidiary, Scalematix, LLC (together the “Buyer”),
for the sale of certain assets in the health and wellness industry and related consumer products industry. Under the terms of
the Agreement, Buyer was to remit $70,850 via wire transfer at Closing and issue to a representative of the Selling Parties Two
Hundred Thirty-Eight Thousand Seven Hundred and Fifty (238,750) shares of restricted common stock. In addition, the Selling Parties
shall have the right to additional earn out compensation based upon the following metrics: (i) at such time as the purchased assets
achieve cumulative revenue of $2,500,000, the Selling Parties shall earn One Hundred Twenty-Five Thousand (125,000) shares of
common stock; and (ii) at such time as the purchased assets achieve cumulative revenue of $5,000,000, the Selling Parties shall
earn One Hundred Twenty-Five Thousand (125,000) shares of common stock. The Closing of the transaction occurred on March 11, 2020.
As of the date of this filing, the Company has received the initial shares of restricted common stock due under the terms of the
Agreement.
Our
wholly owned subsidiaries:
About
TCBM Holdings, LLC
TCBM
Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation,
which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About
HMNRTH, LLC
HMNRTH,
LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store
selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle
and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating
an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most
importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN. The Company’s
ecommerce website can be found at www.hmnrth.com.
In
order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through
the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar
CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have
the required capital to initiate any of the options and there is no guarantee that we will be able to raise the required funds.
About
911 Help Now, LLC
911
Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company
of intellectual property in the safety and security space. At present, we own no intellectual
property within our 911 subsidiary. In order to generate future revenue within 911, we will need to identify and either acquire
or license intellectual property. In the event of an acquisition, we will then need to either develop products utilizing our intellectual
property or license out our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition
or licensing of any intellectual property.
About
Markets on Main, LLC
Markets
on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is A full service, sales
and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus is on bringing
small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services to its clients:
inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer service. MOM’s
website can be found at www.marketsonmain.com.
Plan
of Operation
Our
plan of operations is to raise capital through the issuance of debt and/or equity to meet our ongoing operating expenses and attempt
to identify acquisition candidates to create value for our shareholders. There can be no assurance that we will successfully complete
any additional acquisitions. Any merger or acquisition completed by us can be expected to have a significant dilutive effect on
the percentage of shares held by our current stockholders.
12
MONTH MILESTONES TO IMPLEMENT BUSINESS OPERATIONS
The
Milestones encompass what management believes the Company needs to accomplish to be successful. The Milestones are broken down
by quarters and projected costs.
Quarterly
Milestones:
A.
0-3 Months
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Fund
the “going fully reporting” event for Global Technologies, Ltd inclusive of; accounting, audit, legal and regulatory
fees through unsecured promissory notes
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Identify
additional acquisition candidate(s); prepare them for the acquisition audit process
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Establish
vendor relations with well established DRTV companies to further Markets on Main’s
business plan
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Create
an online portal for small businesses and entrepreneurs at a cost of $30,000
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Complete
accounting including audit review for quarter end and file 10-Q at a cost of $5,000
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B.
4-6 Months
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Expand
the operations of Market on Main to include logistics at a cost of $200,000
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Hire
ancillary staff to support the Company’s operations at an estimated cost of $45,000/quarter
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Establish
working relationships with Direct Response TV partners
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Identify
intellectual property catering to the identity theft and personal emergency response sectors
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Retain
consultant for SEO (Search Engine Optimization) web services for the Company’s corporate website and that of its subsidiaries
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Complete
accounting including audit review for quarter end and file 10-Q at an estimated cost of $5,000
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|
|
|
|
○
|
Appoint
1 additional Board member
|
|
|
|
|
○
|
We
anticipate generating revenue during this quarter as a result of our acquisition of TCBM Holdings, LLC and the formation of
Markets on Main, LLC
|
|
|
|
|
○
|
Identify
and complete due diligence on additional acquisition candidate(s); prepare them for the acquisition and audit process
|
C.
7-9 Months
|
○
|
Hire
interns and part-time experts to develop the Company’s supply chain and logistics infrastructure that will drive new
business and revenues at an estimated cost of $30,000/quarter
|
|
|
|
|
○
|
Focus
the Company’s sales and marketing efforts to help accelerate growth and drive increased
sales and revenues
|
|
|
|
|
○
|
Complete
accounting including audit for year end and file 10-K at an estimated cost of $20,000
|
|
|
|
|
○
|
Thorough
evaluation of the Company’s business plan to date with a focus on profitability and sustainability
|
|
|
|
|
○
|
Perform
website maintenance and upgrades at a projected cost of $5,000 for the quarter
|
|
|
|
|
○
|
We
anticipate continued and increased revenue during this quarter from the operations of our subsidiary
|
D.
10-12 Months
|
○
|
Complete
second acquisition in the DRTV and logistics industry at an estimated cost of $250,000 through a mix of cash and stock
|
|
|
|
|
○
|
Review
SEO plan and make changes as needed
|
|
|
|
|
○
|
Complete
accounting including audit review for quarter end and file 10-Q at a cost of $5,000
|
|
|
|
|
○
|
Develop
business plan for years two and three
|
|
|
|
|
○
|
We
anticipate continued and increased revenue during this quarter from the operations of our subsidiaries
|
|
|
|
|
○
|
Employee
evaluations and changes if needed
|
Financing
Needs
In
order to fund our operations, we rely upon direct investments, partnerships and joint ventures with accredited investors. Once
the Company becomes profitable, we intend to fund our operations from free cash flow.
At
present, the Company only has sufficient funds to conduct its operations for two to three months. There can be no assurance
that additional financing will be available in amounts or on terms acceptable to the Company, if at all.
If
we are not successful in generating sufficient liquidity from Company operations or in raising sufficient capital resources, on
terms acceptable to us, this could have a material adverse effect on the Company’s business, results of operations liquidity
and financial condition.
The
Company presently does not have any available credit, bank financing or other external sources of liquidity. Due to its brief
history under its current business model and historical operating losses, the Company’s operations have not been a source
of liquidity. The Company will need to obtain additional capital in order to expand operations and become profitable. In order
to obtain capital, the Company may need to sell additional shares of its common stock or borrow funds from private lenders. There
can be no assurance that the Company will be successful in obtaining additional funding.
The
Company will need additional investments in order to continue operations. Additional investments are being sought, but the Company
cannot guarantee that it will be able to obtain such investments. Financing transactions may include the issuance of equity or
debt securities, obtaining credit facilities, or other financing mechanisms. In the event there is a downturn in the U.S. stock
and debt markets, this could make it more difficult to obtain financing through the issuance of equity or debt securities. Even
if the Company is able to raise the funds required, it is possible that it could incur unexpected costs and expenses, fail to
collect significant amounts owed to it, or experience unexpected cash requirements that would force it to seek alternative financing.
Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new
equity securities may have rights, preferences or privileges senior to those of existing holders.
Results
from Operations – For the nine months ended March 31, 2020 and 2019 and years ended June 30, 2019 and
June 30, 2018.
Our
results of operations for the nine months ended March 31, 2020 and 2019 and years ended June 30, 2019 and
2018 are summarized below:
|
|
March
31, 2020
|
|
|
March
31, 2019
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
Gross
revenues
|
|
$
|
548,350
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total
Operating expenses
|
|
|
209,856
|
|
|
|
186,287
|
|
|
|
207,644
|
|
|
|
358,834
|
|
Income
(loss) from Operations
|
|
|
267,644
|
|
|
|
186,287
|
|
|
|
(207,644
|
)
|
|
|
(358,834
|
)
|
Other
(Expense)
|
|
|
(1,051,736
|
)
|
|
|
(535,781
|
)
|
|
|
(562,441
|
)
|
|
|
(159,350
|
)
|
Net
Loss
|
|
|
(784,092
|
)
|
|
|
(722,068
|
)
|
|
|
(770,085
|
)
|
|
|
(518,184
|
)
|
Net
loss per share- basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
Revenues
Since
our inception on January 20, 1999, we have generated minimal revenue from our operations. We cannot guarantee we will be successful
in our business operations. We are a “shell” company and, therefore, have limited financial resources and limited
operations until such time that we are able to begin to generate revenue from our own operations. Our business is subject
to risks inherent in the establishment of a new business plan through the acquisition of TCBM Holdings, LLC and the formation
of Markets on Main, LLC, including the financial risks associated with the limited capital resources currently available to us
and risks associated with the implementation of our business strategies.
For
the nine months ended March 31, 2020 and 2019 and years ended June 30, 2019 and 2018, we generated $548,350, $0,
$0 and $0 in revenue, respectively. For the nine months ended March 31, 2020 and 2019 and years ended June 30, 2019 and
2018, our cost of goods sold was $70,850, $0, $0 and $0, respectively. Our revenue for the nine months ended March 31, 2020
was comprised of the sale of inventory through our subsidiary. HMNRTH, LLC.
Operating
Expenses
Our
operating expenses were $209,856, $186,287, $207,644 and $358,834 for the nine months ended March 31, 2020
and 2019 and years ended June 30, 2019 and 2018, respectively.
We
incurred $0, $0, $0 and $0 in advertising expenses for the nine months ended March 31, 2020 and 2019 and years ended
June 30, 2019 and 2018, respectively.
We
incurred $80,000, $60,000, $80,000 and $130,000 in officer and director related expenses for the nine months ended
March 31, 2020 and 2019 and years ended June 30, 2019 and 2018, respectively. The Company anticipates that these
expenses will increase during fiscal 2020 due to the acquisition of TCBM, LLC as
the Company will need to expand its management and ancillary staff.
Loss
from Operations
The
Company’s loss from operations decreased to $207,644 for fiscal year 2019 from $358,834 in 2018, a decrease
of $151,190, due to a decrease in consulting services expense. The Company’s income from operations increased to $267,644
from a loss of $186,287 for the nine months ended March 31, 2020 from 2019, an increase of $453,931, due to an increase in revenue
generated by the sale of the inventory by the Company’s subsidiary, HMNRTH.
Other
Income (Expenses)
Other
Income (Expenses) included interest expense, derivative liability loss and amortization of debt discounts in the amount of $(562,441)
during fiscal year 2019 as compared to $(159,350) during fiscal year 2018. The increase in other income (expenses) in fiscal year
2019 is attributed to the Company’s calculation of its derivative liability expense and amortization of debt discounts.
Other
Income (Expenses) included interest expense, interest income, derivative liability gain (loss) and amortization of debt
discounts in the amount of $(1,051,736) for the nine months ended March 31, 2020 as compared to $(535,781)
for the nine months ended March 31, 2019. The increase in other income (expenses) in fiscal year 2020
is attributed to the Company’s calculation of its interest expense and amortization of debt discount expenses.
Net
Income (Loss)
For
the fiscal year ended 2019, our net loss increased to $(770,085), as compared to a net loss of $(518,184) for the fiscal year
ended 2018, an increase of $251,901. The increase in net loss is attributed to the Company’s calculation of its derivative
liability expense.
For
the nine months ended March 31, 2020, our net loss increased to $(784,092), as compared to a net loss of
$(722,068) for the nine months ended March 31, 2019, an increase of $62,024. The increase in net loss
is attributed to the Company’s calculation of its amortization of debt discount expenses.
Liquidity
and Capital Resources
Cash
on Hand
Our
cash on hand as of March 31, 2020, March 31, 2019, June 30, 2019 and June 30, 2018 was $10,199, $0, $0 and $0, respectively.
We
currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements
that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
We
are dependent on the sale of our securities or issuance of debt to fund our operations and will remain so until we generate sufficient
revenues to pay for our operating costs. Our officers and directors have made no written commitments with respect to providing
a source of liquidity in the form of cash advances, loans and/or financial guarantees.
If
we are unable to raise the funds, we will seek alternative financing through means such as borrowings from institutions or private
individuals. There can be no assurance that we will be able to raise the capital we need for our operations from the sale of our
securities. We have not located any sources for these funds and may not be able to do so in the future. We expect that we will
seek additional financing in the future. However, we may not be able to obtain additional capital or generate sufficient revenues
to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may
be forced to cease operations. If we fail to raise funds, we expect that we will be required to seek protection from creditors
under applicable bankruptcy laws.
Our
independent registered public accounting firm has expressed doubt about our ability to continue as a going concern and believes
that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. Please see
NOTE L- GOING CONCERN UNCERTAINTY for further information.
Notes
payable, third parties
Our
Notes payable, third parties was $1,309,573, $140,650 and $140,650 at March 31, 2020, June 30, 2019 and June 30,
2018, respectively. Please see NOTE F – NOTES PAYABLE, THIRD PARTIES for a full schedule of all notes payable to
third parties, including issue date, maturity date and interest rate.
Notes
payable, related parties
Our
Notes payable, related parties was $124,800, $124,800 and $0 at March 31, 2020, June 30, 2019 and June 30, 2018,
respectively. Please see NOTE G – NOTES PAYABLE, RELATED PARTIES for a full schedule of all notes payable to related
parties, including issue date, maturity date and interest rate.
Use
of Cash
We
had net cash provided (used) in operating activities for the nine months ended March 31, 2020 and for the year ended
June 30, 2019 and June 30, 2018 of $227,785, $- and $(23,950), respectively.
We
had net cash provided (used) in investing activities for the nine months ended March 31, 2020 and for the year ended
June 30, 2019 and June 30, 2018 of $(1,383,009), $- and $-, respectively.
We
had net cash provided (used) from financing activities for the nine months ended March 31, 2020 and for the year
ended June 30, 2019 and June 30, 2018 of $1,168,923, $- and $23,750, respectively.
Our
cash flows for the nine months ended March 31, 2020 and 2019 and years ended June 30, 2019 and 2018 are summarized
below:
|
|
March
31, 2020
|
|
|
Year
Ended
June
30,
2019
|
|
|
Year
Ended
June
30,
2018
|
|
Net
cash provided (used) in operating activities
|
|
$
|
227,785
|
|
|
$
|
-
|
|
|
$
|
(23,950
|
)
|
Net
cash provided (used) by investing activities
|
|
$
|
(1,383,009
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
Net
cash provided from financing activities
|
|
$
|
1,168,923
|
|
|
$
|
-
|
|
|
$
|
23,750
|
|
Net
Change in Cash
|
|
$
|
13,699
|
|
|
$
|
-
|
|
|
$
|
(200
|
)
|
Cash at beginning
of period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
200
|
|
Cash at end
of period
|
|
$
|
13,699
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Critical
Accounting Policies
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Notes to the Consolidated Financial Statements describes the significant accounting policies and
methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, contingencies
and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted
significantly by judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements.
Loss
Contingencies
The
Company is subject to various loss contingencies arising in the ordinary course of business. The Company considers the likelihood
of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of
loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable
that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company
regularly evaluates current information available to us to determine whether such accruals should be adjusted.
Accounting
for Acquisitions
In
accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination,
which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted
for by applying the acquisition method. If the assets acquired are not a business, we account for the transaction or other event
as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill
or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions and immediately
expense acquisition-related costs and fees associated with business combinations.
Income
Taxes
The
Company recognizes deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary
differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities
represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable
when the assets and liabilities are recovered or settled.
Recent
Issued Accounting Pronouncements
In
May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts
with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU
2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration
to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this
core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required
under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December
15, 2017 for public companies, and interim periods therein, using either of the following transition methods: (i) a full retrospective
approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical
expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date
of adoption (which includes additional footnote disclosures). ASU 2014-09 was adopted on July 1, 2019.
In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease
liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between
different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise
from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have
not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases.
However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating
leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under
previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods
within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure
leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach
includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the
identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced
before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to
purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for
leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees
are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on
the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company does
not expect ASU No. 2016-02 to have a significant effect on our Financial statements.
In
July 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among
other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when
determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified
as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and
then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance is effective
for annual periods beginning after December 15, 2018; early adoption is permitted. The Company has adopted ASU 2017-11. As a result,
we have not recognized the fair value of the warrants containing down round features as liabilities.
Management
has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have
a significant impact on our consolidated financial statements and related disclosures.
Off-Balance
Sheet Arrangements
We
are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely
to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.
Share-based
Compensation
In
accordance with ASC 718, Compensation – Stock Based Compensation, and ASC 505, Equity Based Payments
to Non-Employees, we account for share-based payment using the fair value method. Common shares issued to third parties for
non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common
stock on the measurement date, whichever is readily determinable.
CONTROLS
AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Our
management conducted an evaluation, with the participation of our Chief Executive Officer, who is our principal executive officer
and our principal financial and accounting officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end
of the period covered by this registration statement on Form 10. Based on that evaluation, we concluded that
because of the material weakness and significant deficiencies in our internal control over financial reporting described below,
our disclosure controls and procedures were not sufficient as of March 31, 2020, June 30, 2019 or 2018.
Management’s
Annual Report on Internal Control over Financial Reporting
Management
is responsible for the preparation of our financial statements and related information. Management uses its best judgment to ensure
that the financial statements present accurately, in material respects, our financial position and results of operations in fairness
and conformity with generally accepted accounting principles.
Management
is responsible for establishing and maintaining adequate internal control over financial reporting as defined in the Exchange
Act. These internal controls are designed to provide reasonable assurance that the reported financial information is presented
fairly, that disclosures are adequate, and that the assumptions and opinions in the preparation of financial statements are reasonable.
There are inherent limitations in the effectiveness of any system of internal controls, including the possibility of human error
and overriding of controls. Consequently, an ineffective internal control system can only provide reasonable, not absolute, assurance
with respect to reporting financial information.
Our
internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in reasonable
detail, accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary
for preparation of our financial statements in accordance with generally accepted accounting principles and that the
receipts and expenditures of company assets are made in accordance with our management’s and directors’
authorization; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition,
use, or disposition of assets that could have a material effect on our financial statements.
We
conducted an evaluation of the effectiveness of our internal control over financial reporting, based on the framework in “Internal
Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)
and published in 2013, and subsequent guidance prepared by COSO specifically for smaller public companies. Based on that evaluation,
management concluded that our internal control over financial reporting was not sufficient as of March 31, 2020, June 30,
2019 and June 30, 2018 for the reasons discussed below.
A
significant deficiency is a deficiency, or combination of deficiencies in internal control over financial reporting, that adversely
affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance
with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s
financial statements that is more than inconsequential will not be prevented or detected by the entity’s internal control.
A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such
that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements
will not be prevented or detected on a timely basis. Management identified the following material weakness and significant deficiencies in its
assessment of the effectiveness of internal control over financial reporting as of March 31, 2020, June 30, 2019 and June
30, 2018:
|
●
|
The
Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked personnel
with accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements.
|
|
●
|
Material
Weakness – Inadequate segregation of duties.
|
We
expect to be materially dependent on a third party that can provide us with accounting consulting services for the foreseeable
future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there
are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures and internal
control over financial reporting will not result in errors in our financial statements, which could lead to
a restatement of those financial statements. Our management does not expect that our disclosure controls and procedures or our
internal controls will prevent all error and all fraud. A control system, no matter how well conceived and maintained, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system
must account for resource constraints. In addition, the benefits of controls must be considered relative to their costs. Due to
the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, can and will be detected.
This
registration statement on Form 10 does not include an attestation report from our registered public accounting firm regarding
internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to rules of the Commission that permit us to provide only management’s report in this registration
statement on Form 10.
Changes
in Internal Controls over Financial Reporting
There
have been no changes in our internal control over financial reporting during the year ended June 30, 2019 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item
3. Properties.
Currently,
the Company shares office space with Sylios Corp at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and is not
required to reimburse Sylios Corp for monthly rent. The Company anticipates that this relationship will change as we expand on
our business plan and with the addition of key employees.
The
Company’s third-party manufacturing and warehouse facility for its HMNRTH product line is located in Coconut Creek, FL.
The Company was not required to enter into a lease for the warehouse facility.
Item
4. Security Ownership of Certain Beneficial Owners and Management.
As
of March 31, 2020 and June 30, 2019, the Company had authorized 14,991,000,000 shares of Class A Common Stock, 4,000,000
Class B Common Stock and 5,000,000 shares of Preferred Stock. There were 12,189,293,609 shares of Class A Common Stock, 0 shares
of Class B Common Stock and 13 shares of Preferred Stock issued and outstanding as of March 31, 2020.
The
following table sets forth certain information, as of July 23, 2020, with respect to any person (including any “group”,
as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
who is known to us to be the beneficial owner of more than five percent (5%) of any class of our voting securities, and as to
those shares of our equity securities beneficially owned by each of our directors and executive officers and all of our directors
and executive officers as a group.
The
number of shares of common stock beneficially owned by each person is determined under the rules of the Commission and the information
is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any
shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has
the right to acquire within sixty (60) days after the date hereof, through the exercise of any stock option, warrant or other
right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse)
with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does
not constitute an admission of beneficial ownership of those shares.
The
table below shows the number of shares beneficially owned as of July 23, 2020 by each of our individual directors and executive
officers, by other holders of 5% or more of the outstanding Class A common stock and by all our current directors and executive
officers as a group.
|
|
Class
A
Common Stock
|
|
|
|
|
|
|
Beneficially
|
|
|
Percentage
of
|
|
Name
of Beneficial Owner (1)
|
|
Owned
|
|
|
Common
Stock (3)
|
|
Jimmy
Wayne Anderson (3)(4)
|
|
|
4,734,285.714
|
|
|
|
29.55
|
%
|
Fortis
Holdings LTD (5)
|
|
|
2,026,000,000
|
|
|
|
12.64
|
%
|
|
|
|
|
|
|
|
|
|
Officers
and Directors as a Group
|
|
|
4,734,285,714
|
|
|
|
29.55
|
%
|
|
(1)
|
Beneficial
Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting
or investment power with respect to securities. Shares of common stock subject to options, warrants, or convertible debt currently
exercisable or convertible, or exercisable or convertible within 60 days of July 23, 2020 are deemed outstanding for
computing percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage
of any person. Percentages are based on a total of shares of Class A common stock outstanding on July 23, 2020, and
the shares issuable upon exercise of options, warrants exercisable, and debt convertible on or within 60 days of July 23,
2020.
|
|
|
|
|
(2)
|
The
number of common shares outstanding used in computing the percentages is 16,023,579,323.
|
|
|
|
|
(3)
|
Included
within Mr. Anderson’s beneficial ownership includes 900,000,000 shares of common stock issued to Mr. Anderson for services
rendered on behalf of the Company, 3,120,000,000 shares issuable upon the conversion of the Convertible Promissory Note
issued to Around the Clock Partners, LP and 714,285,714 shares issuable upon the conversion of the 10 shares of Series L Preferred
Stock issued to Sylios Corp. Mr. Anderson is the controlling entity for both Around the Clock Partners, LP and Sylios Corp.
|
|
|
|
|
(4)
|
The
address for Mr. Anderson, Sylios Corp and Around the Clock Partners, LP is 501 1st Ave N., Suite 901, St. Petersburg,
FL 33701.
|
|
|
|
|
(5)
|
The
address for Fortis Holdings LTD is Capital City Building, Suite 305, Victoria, Mahe, Seychelles. The last known principal
for Fortis was Anthony Welch up until his death in 2014.
|
|
|
Series
K
Preferred
Stock
|
|
|
Percentage
of
|
|
|
|
Beneficially
|
|
|
Series
K
|
|
Name
of Beneficial Owner
|
|
Owned
(3)(4)
|
|
|
Preferred
Stock
|
|
Jimmy
Wayne Anderson (5)
|
|
|
3
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
Officers
and Directors as a Group
|
|
|
3
|
|
|
|
100.00
|
%
|
|
|
Series
L
Preferred
Stock
|
|
|
Percentage
of
|
|
|
|
Beneficially
|
|
|
Series
L
|
|
Name
of Beneficial Owner
|
|
Owned
(1)(2)
|
|
|
Preferred
Stock
|
|
Sylios
Corp (6)(7)
|
|
|
10
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
10
|
|
|
|
100.00
|
%
|
|
(1)
|
Each
share of the Company’s Series L Preferred stock can be converted into shares of the Company’s Class A Common stock
based on the following formula: $5,000 divided by .70 times the lowest closing price of the Company’s Class A Common
Stock for the immediate five-day period prior to the receipt of the Notice of Conversion.
|
|
|
|
|
(2)
|
The
number of Series L Preferred shares outstanding used in computing the percentages is 10.
|
|
|
|
|
(3)
|
The
Company’s Series K Super Voting Preferred Stock has no conversion feature.
|
|
|
|
|
(4)
|
The
number of Series K Preferred shares outstanding used in computing the percentages is 3.
|
|
|
|
|
(5)
|
The
address for Mr. Anderson is 501 1st Ave N., Suite 901, St. Petersburg, FL 33701.
|
|
|
|
|
(6)
|
Sylios
Corp is a Florida corporation controlled by the Company’s President.
|
|
|
|
|
(7
|
The
address for Sylios Corp is 501 1st Ave N., Suite 901, St. Petersburg, FL 33701.
|
Please
see NOTE I – CAPITAL STOCK for further information.
Item
5. Directors and Executive Officers.
Directors
and Executive Officers
The
names and ages of our Directors and Executive Officers are set forth below. Our By-Laws provide for not less than one Director.
All Directors are elected annually by the stockholders to serve until the next annual meeting of the stockholders and until their
successors are duly elected and qualified. The officers are elected by our Board.
Name
|
|
Age
|
|
Position
and Term
|
Jimmy
Wayne Anderson
|
|
54
|
|
President,
Principal Financial Officer and Chairman of the Board (January 2018 to present)
|
|
|
|
|
|
Bill
Schaefer
|
|
58
|
|
Prior
President, Principal Financial Officer and Chairman of the Board (March 2013-January 2018)
|
Jimmy
Wayne Anderson, President, Principal Financial Officer, Director and Chairman of the Board – Mr. Anderson is the acting
President and Chairman of the Board of Global Technologies. Mr. Anderson was appointed to the Board in December 2017 and assumed
the role of President and Principal Financial Officer in January 2018. Mr. Anderson leverages nearly 15 years of business experience
inclusive of corporate filings, filings with the Securities and Exchange Commission and corporate action filings with the Financial
Industry Regulatory Authority (“FINRA”). Mr. Anderson completed his undergraduate education at the University of Georgia
and received his Doctorate degree from Temple University.
Prior
to joining the Company, Mr. Anderson held the following roles:
|
1.
|
From
inception in 2008 to the President, Mr. Anderson has served as the sole officer and director
of Sylios Corp, a publicly traded company listed on the OTC Markets “PINK”
under the symbol “UNGS.” Sylios Corp is a holding corporation with a market
capitalization of under $1 million that has operations
engaged in the exploration and development of oil and natural gas properties, purchase
of royalty and working interest units in producing properties (oil and natural gas) and
alternative land development projects. The Company maintains equity investments in our
two spin-offs (The Greater Cannabis Company, Inc. and AMDAQ Corp) catering to the medical
and recreational marijuana industry and blockchain technology. Sylios Corp is
a fully reporting entity with the SEC that is currently delinquent in its filings.
|
|
2.
|
From
2017 to the present (except for a 6 month period in 2018), Mr. Anderson has served as
the sole officer and director of AMDAQ Corp. AMDAQ Corp is a spin-off from Sylios Corp
that is currently in the process of filing a Registration Statement on Form S-1. AMDAQ’s
multi-faceted business model will allow the company to take advantage of the significant
emerging opportunities being developed utilizing blockchain technology. On March 8, 2019,
the Company expanded its presence within the blockchain sector by acquiring Arch Exchange
Transfer, LLC (“Arch”). Arch, a registered stock transfer agent, has been
formed as a decentralized transfer & exchange service. The Company’s technology
is being created on the Ethereum block chain with an associated token to help facilitate
transactions and payments. This application-based technology utilizes a cryptographically
stored ledger in an open source peer-to-peer environment. AMDAQ Corp’s current
assets are under $1 million.
|
|
3.
|
From
inception in 2014 through July 31, 2018, Mr. Anderson served as the sole officer and
director of The Greater Cannabis Company, Inc., a publicly traded company listed on the
OTC Markets “QB” under the symbol “GCAN.” The Greater Cannabis
Company, Inc. is a biopharmaceutical company that
is focused on the development and commercialization of cannabinoid delivery systems with
a market capitalization of under $1 million.
|
|
4.
|
From
April 10, 2018 through April 24, 2018, Mr. Anderson also served as the sole officer and
director of Soligen Technologies, Inc., a publicly traded company listed on the OTC Markets
“PINK” under the symbol “SGTN.” Mr. Anderson resigned as a director
of Soligen Technologies, Inc. on January 13, 2019.
|
Bill
Shaefer, Past President, Principal Financial Officer and Director – Mr. Shaefer served as the Company’s President,
Principal Financial Officer and Director from March 2103 until his resignation as an officer and director in January 2018.
The
Company anticipates that its management team will be replaced upon a successful acquisition or merger.
Family
Relationships
There
are no family relationships among the directors and executive officers.
Conflicts
of Interest- General
Our
directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or
partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among
other things, time, efforts and corporation opportunity, involved in participation with such other business entities. While our
sole officer and director of our business is engaged in business activities outside of our business, he devotes to our business
such time as he believes to be necessary.
Conflicts
of Interest- Corporate Opportunities
Presently
no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business
to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary
duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer
and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement
as an officer and director of another company. We have no intention of merging with or acquiring an affiliate, associate person
or business opportunity from any affiliate or any client of any such person.
Committees
to the Board of Directors
In
the ordinary course of business, the board of directors maintains a compensation committee and an audit committee.
The
primary function of the compensation committee is to review and make recommendations to the board of directors with respect to
the compensation, including bonuses, of our officers and to administer the grants under our stock option plan.
The
functions of the audit committee are to review the scope of the audit procedures employed by our independent auditors, to review
with the independent auditors our accounting practices and policies and recommend to whom reports should be submitted, to review
with the independent auditors their final audit reports, to review with our internal and independent auditors our overall accounting
and financial controls, to be available to the independent auditors during the year for consultation, to approve the audit fee
charged by the independent auditors, to report to the board of directors with respect to such matters and to recommend the selection
of the independent auditors.
In
the absence of a separate audit committee our board of directors’ functions as audit committee and performs some of the
same functions of an audit committee, such as recommending a firm of independent certified public accountants to audit the annual
financial statements; reviewing the independent auditor’s independence, the financial statements and their audit report;
and reviewing management’s administration of the system of internal accounting controls.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has, during the past ten years:
(1)
had a petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent
or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a
general partner at or within two years before the time of such filing, or any corporation or business association of which he
was an executive officer at or within two years before the time of such filing;
(2)
has been convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses);
(3)
has been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
(i)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;
(ii)
Engaging in any type of business practice; or
(iii)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation
of Federal or State securities laws or Federal commodities laws;
(4)
has been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State
authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described
in (3)(i) above, or to be associated with persons engaged in any such activity;
(5)
has been found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended,
or vacated;
(6)
has been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has
not been subsequently reversed, suspended or vacated;
(7)
has been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged violation of:
(i)
Any Federal or State securities or commodities law or regulation; or
(ii)
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal
or prohibition order; or
(iii)
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8)
has been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization
that has disciplinary authority over its members or persons associated with a member.
Item
6. Executive Compensation.
Summary
Compensation Table
Name
and Principal Position
|
|
Year
|
|
|
Salary-
Paid or accrued
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan Compensation
($)
|
|
|
Change
in Pension Value & Non-Qualified Deferred Compensation Earnings
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)(5)
|
|
|
|
|
|
|
|
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jimmy
Wayne Anderson,
President,
Treasurer, Secretary, Chairman (1)(2)
|
|
|
2020
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2019
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
|
2018
|
|
|
|
0
|
|
|
|
0
|
|
|
|
90,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
90,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bill
Schaefer
President, Treasurer, Secretary, Chairman (3)(4)
|
|
|
2018
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2017
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2016
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2015
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2014
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2013
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
(1)
|
On
December 15, 2017, Jimmy Wayne Anderson was appointed to the Company’s Board of Directors.
|
|
|
|
|
(2)
|
On
January 25, 2018, Mr. Anderson assumed the roles as the Company’s President, Treasurer and Secretary.
|
|
|
|
|
(3)
|
On
March 15, 2013, Bill Schaefer was appointed to the Company’s Board of Directors and assumed the roles as the Company’s
President, Treasurer and Secretary.
|
|
|
|
|
(4)
|
On
January 25, 2018, Mr. Schaefer resigned as an officer and director of the Company.
|
|
(a)
|
Accrued
salary and salary paid. Please see NOTE G - ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information.
|
|
|
|
|
(b)
|
Accrued
bonus to employee for execution of employment agreement.
|
|
|
|
|
(c)
|
Delivery
of common stock to officer for services rendered. Mr. Anderson received 900,000,000 shares of the Company’s
common stock.
|
|
|
|
|
(d)
|
Options
issued to employee for execution of employment agreement. More details on Options noted under Employment Agreements section
below.
|
|
|
|
|
(e)
|
Equity
compensation received as a Director of the Company.
|
Directors’
Compensation
On
January 26, 2018, the Company executed a new Board of Directors Service Agreement with Wayne Anderson. Under the terms of the
Agreement, commencing the first calendar quarter of 2018 the Company is to pay Mr. Anderson $10,000 per quarter for which Mr.
Anderson serves on the Board of Directors. In addition to cash compensation, the Company is to issue Mr. Anderson the equivalent
of $10,000 of the Company’s common stock on the last calendar day of each quarter. The calculation for the number of shares
to be issued to Mr. Anderson shall be as follows: $10,000/(Closing stock price on the last trading day of each quarter x .80).
The Agreement is in effect so long as Mr. Anderson serves on the Board.
The
following table sets forth with respect to the named director, compensation information inclusive of equity awards and payments
made through the year ended March 31, 2020:
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Nonqualified
Deferred Compensation Earnings
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jimmy
Wayne Anderson (2020)(1)
|
|
$
|
30,000
|
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
60,000
|
|
Jimmy
Wayne Anderson (2019)(1)
|
|
$
|
40,000
|
|
|
$
|
40,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
80,000
|
|
Jimmy
Wayne Anderson (2018)(1)
|
|
$
|
20,000
|
|
|
$
|
20,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
40,000
|
|
(1)
|
On
January 26, 2018, the Company executed a new Board of Directors Service Agreement with Wayne Anderson. Under the terms of
the Agreement, commencing the first calendar quarter of 2018 the Company is to pay Mr. Anderson $10,000 per quarter for which
Mr. Anderson serves on the Board of Directors. In addition to cash compensation, the Company is to issue Mr. Anderson the
equivalent of $10,000 of the Company’s common stock on the last calendar day of each quarter. The calculation for the
number of shares to be issued to Mr. Anderson shall be as follows: $10,000/(Closing stock price on the last trading day of
each quarter x .80). Please see NOTE G - ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information.
|
Employment
Agreements
The
Company does not have any written agreements with any of its executive officers.
Stock
Option Plan and other Employee Benefits Plans
The
Company does not maintain a Stock Option Plan or other Employee Benefit Plans.
Overview
of Compensation Program
We
currently do not maintain a Compensation Committee of the Board of Directors. Until a formal committee is established, our entire
Board of Directors has responsibility for establishing, implementing and continually monitoring adherence with the Company’s
compensation philosophy. The Board of Directors ensures that the total compensation paid to the executives is fair, reasonable,
and competitive.
Role
of Executive Officers in Compensation Decisions
The
Board of Directors makes all compensation decisions for, and approves recommendations regarding equity awards to, the executive
officers and directors of the Company.
Item
7. Certain Relationships and Related Transactions, and Director Independence.
Transactions
with Related Persons
On
September 2, 2019, the Company issued 10 shares of its Series L Preferred stock to Sylios Corp, an entity controlled by the Company’s
sole officer and director, Jimmy Wayne Anderson.
On
August 22, 2019, the Company entered into a Consulting Agreement (the “Agreement”) with Sylios Corp (the “Consultant”),
an entity controlled by the Company’s President, Jimmy Wayne Anderson. Under the terms of the Agreement, the Consultant
is to provide services related to acquisitions, mergers and certain day to day tasks of managing a public company. As compensation,
the Company shall pay Consultant $50,000 through the issuance of ten (10) shares of the Company’s Series L Preferred Stock.
The Company issued the shares of Series L Preferred Stock on September 2, 2019. The Agreement has a term of six (6) months or
until the Consultant completes the services requested.
On
August 2, 2019, the Company issued 3 shares of its Series K Super Voting Preferred stock to the Company’s sole officer and
director, Jimmy Wayne Anderson.
On July 27, 2018, the Company executed a Convertible
Note (the “Convertible Note”) payable to Around the Clock Partners, LP, and entity controlled by Mr. Anderson, in
the principal amount of $124,800. The Convertible Note was issued for compensation due for consulting services. The Convertible
Note is convertible, in whole or in part, at any time and from time to time before maturity (July 27, 2019) at the option of the
holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price of the Company’s
common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note
or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive Trading Days prior to the
Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually. As of March 31, 2020, $124,800
principal plus $10,471 interest were due.
During
the year ended June 30, 2018, the Company issued 900,000,000 shares of its Class A Common Stock to its sole officer and director,
Jimmy Wayne Anderson.
Promoters
and Certain Control Persons
None.
List
of Parents
None.
Director
Independence
The
Company has one director, Jimmy Wayne Anderson, who also serves as the Company’s sole officer. All current directors are
shareholders of the Company.
Item
8. Legal Proceedings.
Legal
Proceedings
We
know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us
or has a material interest adverse to us.
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●
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None
of our executive officers or directors have (i) been involved in any bankruptcy proceedings within the last five years, (ii)
been convicted in or has pending any criminal proceedings (other than traffic violations and other minor offenses), (iii)
been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type
of business, securities or banking activity or (iv) been found to have violated any Federal, state or provincial securities
or commodities law and such finding has not been reversed, suspended or vacated.
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Item
9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.
Market
Information
The
Company’s Class A Common Stock is currently trading on the OTC Markets “PINK” under the symbol “GTLL.”
The following information reflects the high and low bid prices of the Company’s common stock on the OTC Markets “PINK.”
Quarterly
period
|
|
Low
|
|
|
High
|
|
Fiscal
year ended June 30, 2020:
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
Second
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
Third
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
|
|
|
|
|
|
|
|
|
Fiscal
year ended June 30, 2019:
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
Second
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
Third
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
Fourth
Quarter
|
|
$
|
0.000001
|
|
|
$
|
0.0001
|
|
|
|
|
|
|
|
|
|
|
Fiscal
year ended June 30, 2018:
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
$
|
0.0001
|
|
|
$
|
0.0001
|
|
Second
Quarter
|
|
$
|
0.0001
|
|
|
$
|
0.0002
|
|
Third
Quarter
|
|
$
|
0.0001
|
|
|
$
|
0.0001
|
|
Fourth
Quarter
|
|
$
|
0.0001
|
|
|
$
|
0.0001
|
|
Holders
As
of March 31, 2020 and June 30, 2019, there were 12,189,293,609 shares of Class A Common Stock outstanding, which were held
by approximately 149 record holders.
Dividends
We
have never paid cash dividends on any of our capital stock and we currently intend to retain our future earnings, if any, to fund
the development and growth of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable
future.
Securities
Authorized for Issuance under Equity Compensation Plans
The
Company does not currently maintain any Equity Compensation Plans.
Penny
Stock
Penny
Stock Regulation Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain
penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price
of less than $5.00. Excluded from the penny stock designation are securities registered on certain national securities exchanges
or quoted on NASDAQ, provided that current price and volume information with respect to transactions in such securities is provided
by the exchange/system or sold to established customers or accredited investors.
The
penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in connection with the transaction, and the monthly account statements showing the market
value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior
to a transaction in a penny stock, the broker-dealer must 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.
These
disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that
becomes subject to the penny stock rules. As our securities have become subject to the penny stock rules, investors may find it
more difficult to sell their securities.
Item
10. Recent Sales of Unregistered Securities.
Set
forth below is information regarding shares of common stock and preferred stock issued, and warrants/options granted, by
us during the nine months ended March 31, 2020 and the last three fiscal years, that were not registered under the Securities
Act. Also included is the consideration, if any, received by us, for such shares and options and information relating to the Securities
Act, or rule of the SEC, under which exemption from registration was claimed. Each of the below transactions were exempt from
the registration requirements of the Securities Act in reliance upon Rule 701 promulgated under the Securities Act, Section 4(a)(2)
of the Securities Act or Regulation D promulgated under the Securities Act.
Common
Stock
For
the nine months ended March 31, 2020
None.
Fiscal
year ended June 30, 2019
None .
Fiscal
year ended June 30, 2018
On
February 20, 2018, Jimmy Wayne Anderson, the Company’s chief executive officer and sole officer and director of the Company,
returned 100,000,000 shares of the Company’s common stock to be retired.
On
February 14, 2018, the Company issued 500,000,000 shares of its common stock to Valvasone Trust as payment for services
rendered on behalf of the Company.
On
February 2, 2018, the Company issued 500,000,000 shares of its common stock to a Valvasone Trust affiliate as payment for services
rendered on behalf of the Company.
On
February 2, 2018, the Company issued 1,000,000,000 shares
of its common stock to Jimmy Wayne Anderson, the Company’s chief executive officer and sole officer and director
of the Company for services rendered on behalf of the Company.
Fiscal
year ended June 30, 2017
None .
Warrants
On
December 17, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Armada Capital
Partners, LLC (“Armada”) wherein the Company issued Armada a Convertible Promissory Note (the “Note”)
in the amount of $11,000 ($1,000 OID). The Note has a term of one (1) year (due on December 13, 2020) and bears interest at 8%
annually. As part and parcel of the foregoing transaction, Armada was issued a warrant granting the holder the right to purchase
up to 560,800 shares of the Company’s common stock at an exercise price of $0.024 for a term of 5-years. The transaction
closed on December 17, 2019.
Item
11. Description of Registrant’s Securities to be Registered.
We
are registering on this Registration Statement only our Class A Common Stock, the terms of which are described below.
As
of March 31, 2020 and June 30, 2019, we had 14,991,000,000 authorized shares of Class A Common Stock, par value $0.0001
per share, 4,000,000 authorized shares of Class B Common Stock, par value $0.0001 per share and 5,000,000 authorized shares of
Preferred Stock, par value $0.01 per share. Please see NOTE I – CAPITAL STOCK for further information.
Common
Stock- Class A and Class B
Identical
Rights. Except as otherwise expressly provided, ARTICLE FIVE of the Company’s Amended and Restated Articles of Incorporation
dated August 13, 1999, all Common Shares shall be identical and shall entitle the holders thereof to the same rights and privileges.
Stock
Splits. The Corporation shall not in any manner subdivide (by any stock split, reclassification, stock dividend, recapitalization,
or otherwise) or combine the outstanding shares of one class of Common Shares unless the outstanding shares of all classes of
Common Shares shall be proportionately subdivided or combined.
Liquidation
Rights. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation, after
payment shall have been made to holders of outstanding Preferred Shares, if any, of the full amount to which they are entitled
pursuant to the Certificate of Incorporation, the holders of Common Shares shall be entitled, to the exclusion of the holders
of the Preferred Shares, if any, to share ratably, in accordance with the number of Common Shares held by each such holder, in
all remaining assets of the Corporation available for distribution among the holders of Common Shares, whether such assets are
capital, surplus, or earnings. For the purposes of this paragraph, neither the consolidation or merger of the Corporation with
or into any other corporation or corporations in which the stockholders of the Corporation receive capital stock and/or securities
(including debt securities) of the acquiring corporation (or of the direct or indirect parent corporation of the acquiring corporation)
nor the sale, lease or transfer of the Corporation, shall be deemed to be a voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation as those terms are used in this paragraph.
Voting
Rights.
(a)
The holders of the Class A Shares and the Class B Shares shall vote as a single class on all matters submitted to a vote of the
stockholders, with each Class A Share being entitled to one (1) vote and each Class B Share being entitled to six (6) votes, except
as otherwise provided by law.
(b)
The holders of Class A Shares and Class B Shares are not entitled to cumulative votes in the election of any directors.
Preemptive
or Subscription Rights. No holder of Common Shares shall be entitled to preemptive or subscription rights.
Conversion
Rights.
(a)
Automatic Conversion. Each Class B Share shall (subject to receipt of any and all necessary approvals) convert automatically into
one fully paid and non-assessable Class A Share (i) upon its sale, gift, or other transfer to a party other than a Principal Stockholder
(as defined below) or an Affiliate of a Principal Stockholder (as defined below), (ii) upon the death of the Class B Stockholder
holding such Class B Share, unless the Class B Shares are transferred by operation of law to a Principal Stockholder or an Affiliate
of a Principal Stockholder, or (iii) in the event of a sale, gift, or other transfer of a Class B Share to an Affiliate of a Principal
Stockholder, upon the death of the transferor. Each of the foregoing automatic conversion events shall be referred to hereinafter
as an “Event of Automatic Conversion.” For purposes of this ARTICLE FIVE, “Principal Stockholder” includes
any of Donald H. Goldman, Steven M. Fieldman, Lance Fieldman, Yuri Itkis, Michall Itkis and Boris Itkis and an “Affiliate
of a Principal Stockholder” is a person that directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified. For purposes of this definition, “control,”
when used with respect to any specified person, means the power to direct or cause the direction of the management, and policies
of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Without
limitation, an Affiliate also includes the estate of such individual.
(b)
Voluntary Conversion. Each Class B Share shall be convertible at the option of the holder, for no additional consideration, into
one fully paid and non-assessable Class A Share at any time.
(c)
Conversion Procedure. Promptly upon the occurrence of an Event of Automatic Conversion such that Class B shares are converted
automatically into Class A Shares, or upon the voluntary conversion by the holder, the holder of such shares shall surrender the
certificate or certificates therefor, duly endorsed in blank or accompanied by proper instruments of transfer, at the office of
the Corporation or of any transfer agent for the Class A Shares, and shall give written notice to the Corporation at such office
(i) stating that the shares are being converted pursuant to an Event of Automatic Conversion into Class A Shares as provided in
subparagraph 5.6(a) hereof or a voluntary conversion as provided in subparagraph 5.6(b) hereof, (ii) specifying the Event of Automatic
Conversion (and, if the occurrence of such event is within the control of the transferor, stating the transferor’s intent
to effect an Event of Automatic Conversion) or whether such conversion is voluntary, (iii) identifying the number of Class B Shares
being converted, and (iv) setting out the name or names (with addresses) and denominations in which the certificate or certificates
for Class A Shares shall be issued and including instructions for delivery thereof. Delivery of such notice together with the
certificates representing the Class B Shares shall obligate the Corporation to issue such Class A Shares and the Corporation shall
be justified in relying upon the information and the certification contained in such notice and shall not be liable for the result
of any inaccuracy with respect thereto. Thereupon, the Corporation or its transfer agent shall promptly issue and deliver at such
stated address to such holder or to the transferee of Class B Shares a certificate or certificates for the number of Class A Shares
to which such holder or transferee is entitled, registered in the name of such holder, the designee of such holder or transferee,
as specified in such notice. To the extent permitted by law, conversion pursuant to (i) an Event of Automatic Conversion shall
be deemed to have been effected as of the date on which the Event of Automatic Conversion occurred or (ii) a voluntary conversion
shall be deemed to have been effected as of the date the Corporation receives the written notice pursuant to this subparagraph
(c) (each date being the “Conversion Date”). The person entitled to receive the Class A Shares issuable upon such
conversion shall be treated for all purposes as the record holder of such Class A Shares at and as of the Conversion Date, and
the right of such person as the holder of Class B Shares shall cease and terminate at and as of the Conversion Date, in each case
without regard to any failure by the holder to deliver the certificates or the notice by this subparagraph (c).
(d)
Unconverted Shares. In the event of the conversion of fewer than all of the Class B Shares evidenced by a certificate surrendered
to the Corporation in accordance with the procedures of this Paragraph 5.6, the Corporation shall execute and deliver to or upon
the written order of the holder of such certificate, without charge to such holder, a new certificate evidencing the number of
Class B Shares not converted.
(e)
Reissue of Shares. Class B Shares that are converted into Class A Shares as provided herein shall be retired and canceled and
shall not be reissued.
(f)
Reservation. The Corporation hereby reserves and shall at all times reserve and keep available, out of its authorized and unissued
Class A Shares, for the purpose of effecting conversions, such number of duly authorized Class
A Shares as shall from time to time be sufficient to effect the conversion of all outstanding Class B Shares. The Corporation
covenants that all the Class A Shares so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable,
and free from liens and charges with respect to the issue. The Corporation will take all such action as may be necessary to assure
that all such Class A Shares may be so issued without violation of any applicable law or regulation, or any of the requirements
of any national securities exchange upon which the Class A Shares may be listed. The Corporation will not take any action that
results in any adjustment of the conversion ratio if the total number of Class A Shares issued and issuable after such action
upon conversion of the Class B Shares would exceed the total number of Class A Shares then authorized by the Amended and Restated
Certificate of Incorporation, as amended.
Convertible
Instruments
The
following is a description of the material terms of the convertible instruments which remain outstanding as of July 23,
2020 (copies of such are incorporated by reference to the Exhibits hereto, all capitalized terms not otherwise defined shall have
that meaning set forth in the applicable agreement referenced):
On
March 20, 2020, the Company executed a Convertible Note (the “Convertible Note”) payable to Jetco Holdings, LLC in
the principal amount of $20,000. The Convertible Note was fully funded on March 20, 2020. The Convertible Note is convertible,
in whole or in part, at any time and from time to time before maturity (March 20, 2021) at the option of the holder. The conversion
price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market
Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion
Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during
the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices”
means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable
trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities
exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is
not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted
on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 3% annually. As of March 31, 2020,
$20,000 principal plus $18 interest were due.
On
December 17, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Armada Capital
Partners, LLC (“Armada”) wherein the Company issued Armada a Convertible Promissory Note (the “Note”)
in the amount of $11,000 ($1,000 OID). The Note has a term of one (1) year (due on December 17, 2020) and bears interest at 8%
annually. As part and parcel of the foregoing transaction, Armada was issued a warrant granting the holder the right to purchase
up to 560,800 shares of the Company’s common stock at an exercise price of $0.024 for a term of 5-years. The transaction
closed on December 17, 2019. In addition, 10,000,000 shares of the Company’s common stock have been reserved at Pacific
Stock Transfer Corporation, our transfer agent, for possible issuance upon the conversion of the Note into shares of our common
stock. As of March 31, 2020, $11,000 principal plus $253 interest were due.
On
November 30, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Jetco Holdings, LLC
in the principal amount of $2,000,000. The Convertible Note was Issued as part of the Purchase and Sale Agreement for the acquisition
of TCBM Holdings, LLC. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity
(March 20, 2021) at the option of the holder. The conversion price for the principal and interest in connection with voluntary
conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%),
subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1)
Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading
Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price
on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable
reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the
principal trading market for such security, on the principal securities exchange or trading market where such security is listed
or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest
intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one
(1) year and bears interest at 3% annually. As of March 31, 2020, $1,137,923 principal plus $19,038 interest were
due.
On
July 27, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Around the Clock Partners,
LP in the principal amount of $124,800. The Convertible Note was issued for compensation due for consulting services during
year calendar 2018, including but not limited to: consulting advice for public company documentation preparation, identification
and introduction of funding sources, introduction of reverse merger candidates, one on one meeting with merger candidates.
The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (July 27, 2019) at
the option of the holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price of
the Company’s common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert all
or part of the Note or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive Trading
Days prior to the Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually. As of
March 31, 2020, $124,800 principal plus $10,471 interest were due.
On
June 29, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Jody A. DellaDonna in the
principal amount of $25,000. The Convertible Note was issued for compensation due for consulting services during the calendar
year 2018 and first quarter of 2019, including but not limited to: valuation on potential acquisition companies, identify potential
acquisition targets, initiate dialogue with management of the candidate companies to understand their willingness to enter into
a transaction, preparation of pro forma projections on future revenue and earnings on candidate companies. The Convertible
Note is convertible, in whole or in part, at any time and from time to time before maturity (June 29, 2019) at the option of the
holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price of the Company’s
common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note
or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive Trading Days prior to the
Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually. As of March 31, 2020,
$25,000 principal plus $2,194 interest were due.
On
June 3, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Valvasone Trust in the principal
amount of $91.900. The Convertible Note was issued for compensation due for consulting services during the calendar years 2018
and 2019, including but not limited to: identifying outstanding debt obligations and capital structures of candidate companies,
acquire documentation on the production history of said acquisition targets, assist in preparation of financial statements, preparation
of corporate income tax returns, preparation of quarterly and annual financial reports and financial tables. The Convertible
Note is convertible, in whole or in part, at any time and from time to time before maturity (June 3, 2019) at the option of the
holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price of the Company’s
common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note
or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive Trading Days prior to the
Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually. As of March 31, 2020,
$91,900 principal plus $8,381 interest were due.
On
February 16, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Tri-Bridge Ventures,
LLC in the principal amount of $8,000. The Convertible Note was fully funded on February 16, 2018. The Convertible Note is convertible,
in whole or in part, at any time and from time to time before maturity (February 16, 2019) at the option of the holder at the
Variable Conversion Price, which shall be equal to the lesser of (i) the price of any public offering of the Maker’s Common
Stock or (ii) Fifty Percent (50%) of the lowest Trading Price (defined below) during the Twenty Trading Day period prior to the
day the Holder delivers the Conversion Notice, and the Conversion Amount shall be the amount of principal or interest electively
converted in the Conversion Notice. “Trading Price” means, for any security as of any date, any trading price on the
OTC Bulletin Board, or other applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting
Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market
for such security, the price of such security on the principal securities exchange or trading market where such security is listed
or traded. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCBB, or
on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Convertible
Note has a term of one (1) year and bears interest at 10% annually. As of March 31, 2020, $8,000 principal plus $1,694
interest were due.
On
January 24, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Tri-Bridge Ventures,
LLC in the principal amount of $15,750. The Promissory Note was fully funded on January 24, 2018. The Convertible Note is convertible,
in whole or in part, at any time and from time to time before maturity (January 24, 2019) at the option of the holder. The Conversion
Price shall be equal to Fifty Percent (50%) of the lowest Trading Price (defined below) during the Valuation Period (defined below),
and the Conversion Amount shall be the amount of principal or interest electively converted in the Conversion Notice. The total
number of shares due under any conversion notice (“Notice Shares”) will be equal to the Conversion Amount divided
by the Conversion Price. On the date that a Conversion Notice is delivered to Holder, the Company shall deliver an estimated number
of shares (“Estimated Shares”) to Holder’s brokerage account equal to the Conversion Amount divided by 50% of
the Market Price. “Market Price” shall mean the lowest of the daily Trading Price for the Common Stock during the
twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The “Valuation Period”
shall mean twenty (20) Trading Days, commencing on the first Trading Day following delivery and clearing of the Notice Shares
in Holder’s brokerage account, as reported by Holder (“Valuation Start Date”). If at any time, one or multiple
times, during the Valuation Period the number of Estimated Shares delivered to Holder is less than the Notice Shares, the company
must immediately deliver enough shares equal to the difference. A Conversion Amount will not be considered fully converted until
the end of the Valuation Period for that Conversion Amount. “Trading Price” means, for any security as of any date,
any trading price on the OTC Bulletin Board, or other applicable trading market (the “OTCBB”) as reported by a reliable
reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB
is not the principal trading market for such security, the price of such security on the principal securities exchange or trading
market where such security is listed or traded. “Trading Day” shall mean any day on which the Common Stock is tradable
for any period on the OTCBB, or on the principal securities The Convertible Note has a term of one (1) year and bears interest
at 10% annually. As of March 31, 2020, $15,750 principal plus $3,435 interest were due.
Item
12. Indemnification of Directors and Officers.
Indemnification
for Securities Act Liabilities
Our
Certificate of Incorporation provides to the fullest extent permitted by Delaware Law that our directors or officers shall not
be personally liable to us or our shareholders for damages for breach of such director’s or officer’s fiduciary duty.
The effect of this provision of our Articles of Incorporation is to eliminate our rights and our shareholders (through shareholders’
derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of
care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain
situations defined by statute. We believe that the indemnification provisions in our Articles of Incorporation, as amended, are
necessary to attract and retain qualified persons as directors and officers.
Our
By-Laws also provide that the Board of Directors may also authorize us to indemnify our employees or agents, and to advance the
reasonable expenses of such persons, to the same extent, following the same determinations and upon the same conditions as are
required for the indemnification of and advancement of expenses to our directors and officers. As of the date of this Registration
Statement, the Board of Directors has not extended indemnification rights to persons other than directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
The
Certificate of Incorporation of the Company provides that:
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●
|
The
Corporation shall indemnify a director or officer of the Corporation who was wholly successful, on the merits or otherwise,
in the defense of any proceeding to which the director or office was a party because the director or officer is or was a director
or officer of the Corporation against reasonable attorney fees and expenses incurred by the director or officer in connection
with the proceeding. The Corporation may indemnify an individual made a party to a proceeding because the individual is or
was a director, officer, employee or agent of the Corporation against liability if authorized in the specific case after determination,
in the manner required by the board of directors, that indemnification of the director, officer, employee or agent, as the
case may be, is permissible in the circumstances because the director, officer, employee or agent has met the standard of
conduct set forth by the board of directors. The indemnification and advancement of attorney fees and expenses for directors,
officers, employees and agents of the Corporation shall apply when such persons are serving at the Corporation’s request
while a director, officer, employee or agent of the Corporation, as the case may be, as a director, officer, partner, trustee,
employee or agent of another foreign or domestic Corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, whether or not for profit, as well as in their official capacity with the Corporation. The Corporation also
may pay for or reimburse the reasonable attorney fees and expenses incurred by a director, officer, employee or agent of the
Corporation who is a party to a proceeding in advance of final disposition of the proceeding. The Corporation also may purchase
and maintain insurance on behalf of an individual arising from the individual’s status as a director, officer, employee
or agent of the Corporation, whether or not the Corporation would have power to indemnify the individual against the same
liability under the law. All references in these Articles of Incorporation are deemed to include any amendment or successor
thereto. Nothing contained in these Articles of Incorporation shall limit or preclude the exercise of any right relating to
indemnification or advance of attorney fees and expenses to any person who is or was a director, officer, employee or agent
of the Corporation or the ability of the Corporation otherwise to indemnify or advance expenses to any such person by contract
or in any other manner. If any word, clause or sentence of the foregoing provisions regarding indemnification or advancement
of the attorney fees or expenses shall be held invalid as contrary to law or public policy, it shall be severable and the
provisions remaining shall not be otherwise affected. All references in these Articles of Incorporation to “director”,
“officer”, “employee”, and “agent” shall include the heirs, estates, executors, administrators
and personal representatives of such persons.
|
Explanatory
Note
Global
Technologies, Ltd. is filing this General Form for Registration of Securities on Form 10, which we refer to as the Registration
Statement, to register its Class A Common Stock, par value $0.0001 per share, pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. Once this registration statement is deemed effective, we will be subject to the
requirements of Regulation 13A under the Exchange Act, which will require us to file annual reports on Form 10-K, quarterly reports
on Form 10-Q, and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act
applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act. Unless otherwise mentioned
or unless the context requires otherwise, when used in this Registration Statement, the terms “Global Technologies,”
“Company,” “we,” “us,” and “our” refer to Global Technologies, Ltd.
Where
you can find more information about us
When
this Registration Statement becomes effective, we will begin to file reports, proxy statements, information statements and other
information with the United States Securities and Exchange Commission, or SEC. You may read and copy this information, for a copying
fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document
retrieval services, and at the website maintained by the SEC at http://www.sec.gov.
Our
Internet website address is http://www.globaltechnologiesltd.info. Information contained on the website does not constitute part
of this Registration Statement. We have included our website address in this Registration Statement solely as an inactive textual
reference. When this Registration Statement is effective, we will make available, through a link to the SEC’s website, electronic
copies of the materials we file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, the Section 16 reports filed by our executive officers, directors and 10% stockholders and amendments to those reports.
Legal
Proceedings
We
know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us
or has a material interest adverse to us.
|
●
|
None
of our executive officers or directors have (i) been involved in any bankruptcy proceedings within the last five years, (ii)
been convicted in or has pending any criminal proceedings (other than traffic violations and other minor offenses), (iii)
been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type
of business, securities or banking activity or (iv) been found to have violated any Federal, state or provincial securities
or commodities law and such finding has not been reversed, suspended or vacated.
|
Experts
The
financial statements for the years ended June 30, 2019 and 2018 for Global Technologies included in this prospectus and elsewhere
in the registration statement have been audited by Fruci & Associates, PLLC, as indicated in its report with respect thereto,
and are included herein in reliance upon the authority of said firm as experts in auditing and accounting in giving said reports.
Item
13. Financial Statements and Supplementary Data.
The
information required by this item may be found beginning on page F-1 of this Registration Statement and are incorporated herein
by reference.
Item
14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On
July 10, 2019, the Company engaged Fruci & Associates, PLLC as the Company’s independent registered public accounting
firm. We have had no disagreements with our independent auditors on accounting or financial disclosures.
Item
15. Financial Statements and Exhibits.
INDEX
TO FINANCIAL STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Shareholders of Global Technologies, Ltd.
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Global Technologies, Ltd. (“the Company”) as of June 30, 2019 and
2018, and the related statements of operations, stockholders’ deficiency, and cash flows for the two-year period ended June
30, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of June 30, 2019 and 2018, and the results
of its operations and its cash flows for the two-year period ended June 30, 2019, in conformity with accounting principles generally
accepted in the United States of America.
Going
Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note L to the financial statements, the Company has cumulative losses, and negative cash flows from operations. These factors
raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to
these matters are also described in Note L. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.
Fruci
& Associates II, PLLC
We
have served as the Company’s auditor since 2019.
Spokane,
Washington
June
8, 2020
GLOBAL
TECHNOLOGIES, LTD
CONSOLIDATED
BALANCE SHEETS
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
10,199
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Brokerage
account
|
|
|
3,500
|
|
|
|
-
|
|
|
|
-
|
|
Accounts
receivable
|
|
|
70,580
|
|
|
|
-
|
|
|
|
-
|
|
Loans
receivable
|
|
|
124,812
|
|
|
|
-
|
|
|
|
-
|
|
Receivable,
other
|
|
|
1,608
|
|
|
|
-
|
|
|
|
1,689
|
|
Total
current assets
|
|
|
210,699
|
|
|
|
-
|
|
|
|
1,689
|
|
Property
and equipment, less accumulated depreciation of $1,732
|
|
|
34,631
|
|
|
|
-
|
|
|
|
-
|
|
Goodwill
|
|
|
1,346,646
|
|
|
|
-
|
|
|
|
-
|
|
Total
other assets
|
|
|
1,381,277
|
|
|
|
-
|
|
|
|
-
|
|
TOTAL
ASSETS
|
|
$
|
1,591,976
|
|
|
$
|
-
|
|
|
$
|
1,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
15,578
|
|
|
$
|
2,028
|
|
|
$
|
676
|
|
Bank
overdrafts
|
|
|
8,997
|
|
|
|
8,997
|
|
|
|
8,997
|
|
Accrued
interest
|
|
|
45,485
|
|
|
|
15,331
|
|
|
|
1,320
|
|
Accrued
director’s compensation
|
|
|
99,803
|
|
|
|
39,803
|
|
|
|
-
|
|
Notes
payable-third parties
|
|
|
1,309,573
|
|
|
|
140,650
|
|
|
|
140,650
|
|
Note
payable-related party
|
|
|
124,800
|
|
|
|
124,800
|
|
|
|
-
|
|
Debt
discounts
|
|
|
(784,358
|
)
|
|
|
(8,890
|
)
|
|
|
(123,270
|
)
|
Derivative
liability
|
|
|
2,514,259
|
|
|
|
715,350
|
|
|
|
281,300
|
|
Total
current liabilities
|
|
|
3,334,137
|
|
|
|
1,038,069
|
|
|
|
309,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
$
|
3,334,137
|
|
|
$
|
1,038,069
|
|
|
$
|
309,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIENCY
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock; 5,000,000 shares authorized, $.01 par value:
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
K; 3 shares authorized, par value $0.01, as of March 31, 2020, June 30, 2019 and 2018, there are 3, 0 and 0, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Series
L; 500,000 shares authorized, par value $0.01, as of March 31, 2020, June 30, 2019 and 2018, there are 10, 0 and 0, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Common
stock; 14,991,000,000 shares authorized, $.0001 par value, as of March 31, 2020, June 30, 2019 and 2018, there are 12,189,293,609,
12,189,293,609 and 12,189,293,609 shares outstanding, respectively
|
|
|
1,218,929
|
|
|
|
1,218,929
|
|
|
|
1,218,929
|
|
Additional
paid- in capital Class A common stock
|
|
|
158,069,422
|
|
|
|
158,069,422
|
|
|
|
158,069,422
|
|
Additional
paid- in capital Class B common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Additional
paid- in capital preferred stock
|
|
|
60,000
|
|
|
|
-
|
|
|
|
-
|
|
Common
stock to be issued
|
|
|
80,000
|
|
|
|
60,000
|
|
|
|
20,000
|
|
Accumulated
deficit
|
|
|
(161,170,512
|
)
|
|
|
(160,386,420
|
)
|
|
|
(159,616,335
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders’ deficiency
|
|
|
(1,742,161
|
)
|
|
|
(1,038,069
|
)
|
|
|
(307,984
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
$
|
1,591,976
|
|
|
$
|
-
|
|
|
$
|
1,689
|
|
The
accompanying notes are an integral part of these consolidated financial statements.
GLOBAL
TECHNOLOGIES, LTD
STATEMENTS
OF OPERATIONS
For
the years ended June 30, 2019 and 2018
|
|
2019
|
|
|
2018
|
|
Revenue
earned
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Officer
and director compensation, including stock-based compensation of $40,000 and $110,000, respectively
|
|
|
80,000
|
|
|
|
130,000
|
|
Consulting
services
|
|
|
124,800
|
|
|
|
221,900
|
|
Professional
services
|
|
|
500
|
|
|
|
-
|
|
Selling,
general and administrative
|
|
|
2,344
|
|
|
|
6,934
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
207,644
|
|
|
|
358,834
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(207,644
|
)
|
|
|
(358,834
|
)
|
|
|
|
|
|
|
|
|
|
Other
expenses
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(14,011
|
)
|
|
|
(1,320
|
)
|
Loss
on issuance of convertible notes
|
|
|
(309,250
|
)
|
|
|
(140,650
|
)
|
Amortization
of debt discounts
|
|
|
(239,180
|
)
|
|
|
(17,380
|
)
|
|
|
|
|
|
|
|
|
|
Total
other expenses
|
|
|
(562,441
|
)
|
|
|
(159,350
|
)
|
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes
|
|
|
(770,085
|
)
|
|
|
(518,184
|
)
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(770,085
|
)
|
|
$
|
(518,184
|
)
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding – basic and diluted
|
|
|
12,189,293,609
|
|
|
|
12,110,960,276
|
|
The
accompanying notes are an integral part of these consolidated financial statements.
GLOBAL
TECHNOLOGIES, LTD
CONSOLIDATED
STATEMENTS OF OPERATIONS
For
the nine months ended March 31, 2020 and 2019 (Unaudited)
|
|
2020
|
|
|
2019
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Revenue
earned
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
548,350
|
|
|
$
|
-
|
|
Cost
of revenues
|
|
|
70,850
|
|
|
|
-
|
|
Gross
profit
|
|
|
477,500
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Officer
and director compensation, including stock-based compensation of $40,000 and $30,000, respectively
|
|
|
80,000
|
|
|
|
60,000
|
|
Salaries
|
|
|
30,000
|
|
|
|
-
|
|
Consulting
|
|
|
50,000
|
|
|
|
124,800
|
|
Professional
services
|
|
|
14,636
|
|
|
|
300
|
|
Depreciation
|
|
|
1,732
|
|
|
|
-
|
|
Selling,
general and administrative
|
|
|
33,488
|
|
|
|
1,187
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
209,856
|
|
|
|
186,287
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
|
|
267,644
|
|
|
|
(186,287
|
)
|
|
|
|
|
|
|
|
|
|
Other
income (expenses)
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1,859
|
|
|
|
-
|
|
Interest
expense
|
|
|
(30,154
|
)
|
|
|
(10,396
|
)
|
Derivative
liability gain
|
|
|
223,201
|
|
|
|
(439,600
|
)
|
Amortization
of debt discounts
|
|
|
(1,246,642
|
)
|
|
|
(85,785
|
)
|
|
|
|
|
|
|
|
|
|
Total
other income and (expenses)
|
|
|
(1,051,736
|
)
|
|
|
(535,781
|
)
|
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes
|
|
|
(784,092
|
)
|
|
|
(722,068
|
)
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(784,092
|
)
|
|
$
|
(722,068
|
)
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per common share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding – basic and diluted
|
|
|
12,189,293,609
|
|
|
|
12,189,293,609
|
|
The
accompanying notes are an integral part of these consolidated financial statements.
GLOBAL
TECHNOLOGIES, LTD
CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIENCY)
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 (Unaudited)
|
|
Series
K Preferred
|
|
|
Series
L Preferred
|
|
|
|
|
|
Common
Stock to
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
stock
|
|
|
stock
|
|
|
Common
Stock
|
|
|
be
|
|
|
Paid
in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Issued
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
at June 30, 2017 (Unaudited)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,289,293,609
|
|
|
$
|
1,028,929
|
|
|
|
-
|
|
|
$
|
158,069,422
|
|
|
$
|
159,098,151
|
)
|
|
$
|
200
|
|
Issuance
of common stock in satisfaction of officer’s compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
900,000,000
|
|
|
|
90,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
90,000
|
|
Issuance
of common stock to consultant in satisfaction of consulting fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000,000,000
|
|
|
|
100,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
100,000
|
|
Common
stock for services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,000
|
|
Net
loss for the year ended June 30, 2018
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
(518,184
|
)
|
|
|
(518,184
|
)
|
Balances
at June 30, 2018
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
12,189,293,609
|
|
|
$
|
1,218,929
|
|
|
|
20,000
|
|
|
$
|
158,069,422
|
|
|
$
|
(159,616,335
|
)
|
|
$
|
(307,984
|
)
|
Common
stock for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40,000
|
|
|
|
-
|
|
|
|
|
|
|
|
40,000
|
|
Net
loss for the year ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(770,085
|
)
|
|
|
(770,085
|
)
|
Balances
at June 30, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
12,189,293,609
|
|
|
$
|
1,218,929
|
|
|
|
60,000
|
|
|
$
|
158,069,422
|
|
|
$
|
(160,386,420
|
)
|
|
$
|
(1,038,069
|
)
|
Issuance
of Series L preferred stock in satisfaction of compensation due for consulting fees
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
-
|
|
|
|
50,000
|
|
Issuance
of Series K preferred stock in satisfaction of services rendered as an officer
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
10,000
|
|
Common
stock for services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,000
|
|
Net
loss for the nine months ended March 31, 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(784,092
|
)
|
|
|
(784,092
|
)
|
Balances
at March 31, 2020 (Unaudited)
|
|
|
3
|
|
|
$
|
-
|
|
|
|
10
|
|
|
$
|
-
|
|
|
|
12,189,293,609
|
|
|
$
|
1,218,929
|
|
|
|
80,000
|
|
|
$
|
158,129,422
|
|
|
$
|
(161,170,512
|
)
|
|
$
|
(1,742,161
|
)
|
The
accompanying notes are an integral part of these consolidated financial statements.
GLOBAL
TECHNOLOGIES, LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 (Unaudited)
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)
|
|
$
|
(784,092
|
)
|
|
$
|
(770,085
|
)
|
|
$
|
(518,184
|
)
|
Adjustment
to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for officer’s compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
90,000
|
|
Issuance
of common stock for services rendered on behalf of the Company
|
|
|
-
|
|
|
|
-
|
|
|
|
100,000
|
|
Issuance
of Series L Preferred stock for consulting services
|
|
|
50,000
|
|
|
|
-
|
|
|
|
-
|
|
Issuance
of Series K Preferred stock for consulting services
|
|
|
10,000
|
|
|
|
-
|
|
|
|
-
|
|
Issuance
of related party note for services rendered on behalf of the Company
|
|
|
-
|
|
|
|
124,800
|
|
|
|
-
|
|
Issuance
of third-party notes for services rendered on behalf of the Company
|
|
|
-
|
|
|
|
-
|
|
|
|
116,900
|
|
Common
stock to be issued
|
|
|
20,000
|
|
|
|
40,000
|
|
|
|
20,000
|
|
Derivative
liability loss (gain)
|
|
|
(223,201
|
)
|
|
|
309,250
|
|
|
|
140,650
|
|
Depreciation
|
|
|
1,732
|
|
|
|
-
|
|
|
|
-
|
|
Amortization
of debt discounts
|
|
|
1,246,642
|
|
|
|
239,180
|
|
|
|
17,380
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
receivable officer
|
|
|
-
|
|
|
|
1,689
|
|
|
|
(1,689
|
)
|
Accounts
and loans receivable
|
|
|
(197,000
|
)
|
|
|
-
|
|
|
|
-
|
|
Bank
overdrafts
|
|
|
-
|
|
|
|
-
|
|
|
|
8,997
|
|
Accounts
payable
|
|
|
13,550
|
|
|
|
1,352
|
|
|
|
676
|
|
Accrued
interest
|
|
|
30,154
|
|
|
|
14,011
|
|
|
|
1,320
|
|
Accrued
director’s compensation
|
|
|
60,000
|
|
|
|
39,803
|
|
|
|
-
|
|
Net
cash provided (used) by operating activities
|
|
|
227,785
|
|
|
|
-
|
|
|
|
(23,950
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
in subsidiaries
|
|
|
(1,346,646
|
)
|
|
|
-
|
|
|
|
-
|
|
Purchase
of equipment
|
|
|
(36,363
|
)
|
|
|
-
|
|
|
|
-
|
|
Net
cash provided (used) by investing activities
|
|
|
(1,383,009
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
on convertible notes
|
|
|
(862,077
|
)
|
|
|
-
|
|
|
|
-
|
|
Borrowings
from notes payable
|
|
|
31,000
|
|
|
|
-
|
|
|
|
-
|
|
Issuance
of convertible note for acquisition
|
|
|
2,000,000
|
|
|
|
-
|
|
|
|
23,750
|
|
Net
cash provided from financing activities
|
|
|
1,168,923
|
|
|
|
-
|
|
|
|
23,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
13,699
|
|
|
|
-
|
|
|
|
(200
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
-
|
|
|
|
-
|
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
13,699
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes
paid
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Interest
paid
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these consolidated financial statements
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
A – ORGANIZATION
Overview
Global
Technologies, Ltd. (hereinafter the “Company”, “Our”, “We”, or “Us”) is a publicly
quoted shell company that was incorporated under the laws of the State of Delaware on January 20, 1999 under the name of NEW IFT
Corporation. On August 13, 1999, the Company filed an Amended and Restated Certificate of Incorporation with the State of Delaware
to change the name of the corporation to Global Technologies, Ltd. Our principal executive offices are located at 501 1st
Ave N., Suite 901, St. Petersburg, FL 33701 and our telephone number is (727) 482-1505. Our website address is www.globaltechnologiesltd.info.
The information contained on, or that can be accessed through, our website is not a part of this Registration Statement. We have
included our website address in this Registration Statement solely as an inactive textual reference.
Prior
Operational History
From
inception until March 2011, Global Technologies was a technology portfolio company that acquired nascent technology and related
innovations, inventions and IP assets to enhance their growth and development. The Company built revenues and asset value through
a model of continuous growth, income from or sale of its portfolio holdings, and technology licensing or distribution agreements.
The
Company invested primarily in innovative and promising clean/renewable energy or bio-tech technologies that had reached the stage
in the critical Technology Development & Demonstration phase of the Innovative Cycle, which includes Prototype, Demonstration
and Market Analysis.
In
March 2011, the Company abandoned its operations. Mr. Jimmy Wayne Anderson, our sole officer and director, was appointed a director
of the Company in December 2017 and an officer in January 2018.
Current
Operations
Global
Technologies, Ltd (“Global”) is a holding corporation, which through its subsidiaries, has operations engaged in the
online sales of CBD and hemp related products, the acquisition of intellectual property in the safety and security space and as
a portal for entrepreneurs to provide immediate access to live shopping, e-commerce, product placement in brick and mortar retail
outlets and logistics.
On
November 30, 2019, the Company entered into a Purchase and Sale Agreement (the “Agreement”) for the purchase of TCBM
Holdings, LLC (“TCBM”). Under the terms of the Agreement, the Company issued a Convertible Promissory Note (the “Note”)
in the amount of $2,000,000 to Jetco Holdings, LLC for the purchase of all issued and outstanding membership units of TCBM and
its subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
On
March 11, 2020, the Company, through its two wholly owned subsidiaries, HMNRTH, LLC (the “Seller”) and TCBM Holdings,
LLC (the “Owner”) (together Seller and Owner the “Selling Parties”) entered into an Asset Purchase Agreement
(the “Agreement”) with Edison Nation, Inc. and its wholly owned subsidiary, Scalematix, LLC (together the “Buyer”),
for the sale of certain assets in the health and wellness industry and related consumer products industry. Under the terms of
the Agreement, Buyer was to remit $70,850 via wire transfer at Closing and issue to a representative of the Selling Parties Two
Hundred Thirty-Eight Thousand Seven Hundred and Fifty (238,750) shares of restricted common stock. In addition, the Selling Parties
shall have the right to additional earn out compensation based upon the following metrics: (i) at such time as the purchased assets
achieve cumulative revenue of $2,500,000, the Selling Parties shall earn One Hundred Twenty-Five Thousand (125,000) shares of
common stock; and (ii) at such time as the purchased assets achieve cumulative revenue of $5,000,000, the Selling Parties shall
earn One Hundred Twenty-Five Thousand (125,000) shares of common stock. The Closing of the transaction occurred on March 11, 2020.
As of the date of this filing, the Company has received the 238,750 shares of restricted common stock valued at $477,500 due under
the terms of the Agreement. The shares were subsequently transferred to the principal of Jetco Holdings, LLC as payment against
the November 30, 2019 Convertible Promissory Note issued by the Company. Please see NOTE F - NOTES PAYABLE, THIRD
PARTIES for further information.
Our
wholly owned subsidiaries:
About
TCBM Holdings, LLC
TCBM
Holdings, LLC (“TCBM”) was formed as a Delaware limited liability company on August 10, 2017. TCBM is a holding corporation,
which operated through its two wholly owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC.
About
HMNRTH, LLC
HMNRTH,
LLC (“HMN”) was formed as a Delaware limited liability company on July 30, 2019. HMNRTH operates as an online store
selling a variety of hemp and CBD related products. The Company’s business model is to bridge the gap between the lifestyle
and knowledge components within the cannabis industry. The Company’s goal is to educate every consumer while cultivating
an experience by providing quality products, branded cutting-edge content, and diversified product lines for any purpose. Most
importantly, we want our clients to discover their inner HMN, redefine their inner HMN and Empower their inner HMN. The Company’s
ecommerce website can be found at www.hmnrth.com.
In
order for the Company to generate revenue through HMNRTH, we will need to: (i) produce additional inventory for retail sales through
the Company’s ecommerce site or sales, or (ii) sales to third party distributors, or (iii) direct sales to brick and mortar
CBD retail outlets, or (iv) generate additional CBD formulas to be utilized in new products At present, the Company does not have
the required capital to initiate any of the options and there is no guarantee that we will be able to raise the required funds.
About
911 Help Now, LLC
911
Help Now, LLC (“911”) was formed as a Delaware limited liability company on February 2, 2018. 911 was a holding company
of intellectual property in the safety and security space. At present, we own no intellectual
property within our 911 subsidiary. In order to generate future revenue within 911, we will need to identify and either acquire
or license intellectual property. In the event of an acquisition, we will then need to either develop products utilizing our intellectual
property or license out our intellectual property to a third party. There is no guarantee that we will be successful with an acquisition
or licensing of any intellectual property.
About
Markets on Main, LLC
Markets
on Main, LLC (“MOM”) was formed as a Florida limited liability company on April 2, 2020. MOM is A full service, sales
and distribution, third-party logistics provider and portal to multi-channel sales opportunities. MOM’s focus is on bringing
small businesses and entrepreneurs to large opportunities and distribution. MOM will provide the following services to its clients:
inventory management, brand management, fulfillment and drop-ship capabilities, retail distribution and customer service. MOM’s
website can be found at www.marketsonmain.com.
Consultants
On
January 2, 2020, the Company entered into a Consulting Agreement (the “Agreement”) with Timothy Cabrera (the “Consultant”).
Under the terms of the Agreement, the Consultant is to provide services to further the business plan of the Company’s subsidiaries,
seek and advise the Company on the acquisition of potential products, seek acquisition candidates and on the sale of any inventory.
The Agreement has a term of one (1) year and the Consultant is to be compensated Two Hundred Fifty Thousand and NO/100 Dollars
($250,000).
On January 2, 2020, the Company entered into a Consulting Agreement
(the “Agreement”) with Brian McFadden (the “Consultant”). Under the terms of the Agreement, the Consultant
is to provide services to manage the Company’s HMNRTH subsidiary, manage the process of new CBD formulas from development
to sale, seek and advise the Company on the acquisition of potential products and on the sale of any inventory. The Agreement has
a term of one (1) year and the Consultant is to be compensated Two Hundred Fifty Thousand and NO/100 Dollars ($250,000).
On
August 22, 2019, the Company entered into a Consulting Agreement (the “Agreement”) with Sylios Corp (the “Consultant”),
an entity controlled by the Company’s President, Jimmy Wayne Anderson. Under the terms of the Agreement, the Consultant
is to provide services related to acquisitions, mergers and certain day to day tasks of managing a public company. As compensation,
the Company shall pay Consultant $50,000 through the issuance of ten (10) shares of the Company’s Series L Preferred Stock.
The Company issued the shares of Series L Preferred Stock on September 2, 2019. The Agreement has a term of six (6) months or
until the Consultant completes the services requested.
NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary
of Significant Accounting Policies
This
summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial
statements. The financial statements and notes are representations of the Company’s management, which is responsible for
their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States
and have been consistently applied in the preparation of the financial statements.
Principles
of Consolidation
The
consolidated financial statements include the accounts of Global Technologies. All inter-company balances and transactions have
been eliminated in consolidation.
Cash
Equivalents
Investments
having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For
the periods presented, the Company had no cash equivalents.
Income
Taxes
In
accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the
asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates
in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts
on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they
occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.
We
expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a
tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold,
the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax
authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of June 30, 2019, we
had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and
administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations
since our inception. To date, we have not incurred any interest or tax penalties.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Financial
Instruments and Fair Value of Financial Instruments
We
adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a
recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires
the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair
value measurements.
ASC
820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that
maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level
1:
|
Observable
inputs such as quoted market prices in active markets for identical assets or liabilities
|
Level
2:
|
Observable
market-based inputs or unobservable inputs that are corroborated by market data
|
Level
3:
|
Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
|
The
carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial
assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement
is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when
a significant event occurs. Except for the derivative liability, we had no financial assets or liabilities carried and measured
at fair value on a recurring or nonrecurring basis during the periods presented.
Derivative
Liabilities
We
evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded
components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40,
Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
The
result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument
and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as
a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion
or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value
is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification
under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.
Long-lived
Assets
Long-lived
assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses
on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset
may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an
asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired,
the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment
evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows
could be different from those estimated by management which could have a material effect on our reporting results and financial
positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market
values and third-party independent appraisals, as considered necessary.
Marketable
Equity Securities
Marketable
equity securities are stated at lower of cost or market value with unrealized gains and losses included in operations. The Company
has classified its marketable equity securities as trading securities.
Deferred
Financing Costs
Deferred
financing costs represent costs incurred in the connection with obtaining debt financing. These costs are amortized ratably and
charged to financing expenses over the term of the related debt.
Revenue
recognition
Generally,
the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process
outlined in the Accounting Standards Codification (“ASC”) 606:
Step
1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved
the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights
regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to
be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of
the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
Step
2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance
obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct
goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract
includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are
capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted
for as a combined performance obligation.
Step
3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize
as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to
determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration,
the Company would determine the amount of variable consideration that should be included in the transaction price based on expected
value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable
that a significant future reversal of cumulative revenue under the contract would not occur.
Step
4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate
the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the
entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction
price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.
Step
5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods
or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of
the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use
of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from
directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present
obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s).
Performance obligations can be satisfied at a point in time or over time.
Substantially
all of the Company’s revenues continue to be recognized when control of the goods is transferred to the customer, which
is upon shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable
components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically
these credits for defective merchandise have not been material. Based on the Company’s analysis of the new revenue standards,
revenue recognition from the sale of finished goods to customers, which represents substantially all of the Company’s revenues,
was not impacted by the adoption of the new revenue standards.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Equity
Instruments Issued to Non-Employees for Acquiring Goods or Services
Issuances
of our common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or
the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value
of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment
for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty
considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance
is complete.
Although
situations may arise in which counter performance may be required over a period of time, the equity award granted to the party
performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which
vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement
date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount
to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting
periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured
at the then-current fair values.
Stock-Based
Compensation
We
account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance,
stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense
over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to
non-employees are accounted for in accordance with ASC 505-50 “Equity”, wherein such awards are expensed over the
period in which the related services are rendered.
Related
Parties
A
party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is
controlled by, or is under common control with us. Related parties also include our principal owners, our management, members
of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or
operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly
influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate
interests, is also a related party.
Advertising
Costs
Advertising
costs are expensed as incurred. For the periods presented, we had no advertising costs.
Loss
per Share
We
compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements
for loss per share for entities with publicly held common stock.
Basic
loss per share amounts are computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted
net loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such
as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted
net loss per share are excluded from the calculation. For the years ended June 30, 2019 and 2018 and for the nine months
ended March 31, 2020 and 2019, the Company excluded 5,309,000,000 and 2,813,000,000, 25,142,587,619 and 7,209,000,000,
respectively, shares relating to convertible notes payable to third parties (Please see NOTE F - NOTES PAYABLE, THIRD
PARTIES for further information).
Recently
Enacted Accounting Standards
In
May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts
with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU
2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration
to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this
core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required
under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December
15, 2017 for public companies, and interim periods therein, using either of the following transition methods: (i) a full retrospective
approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical
expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date
of adoption (which includes additional footnote disclosures). ASU 2014-09 was adopted on July 1, 2019.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease
liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between
different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise
from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have
not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases.
However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating
leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under
previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods
within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure
leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach
includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the
identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced
before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to
purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for
leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees
are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on
the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company does
not expect ASU No. 2016-02 to have a significant effect on our Financial statements.
In
July 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among
other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when
determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified
as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and
then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance is effective
for annual periods beginning after December 15, 2018; early adoption is permitted. The Company has adopted ASU 2017-11. As a result,
we have not recognized the fair value of the warrants containing down round features as liabilities.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from those estimates.
Fair
Value of Financial Instruments
The
Company defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current
transaction between willing parties. Financial instruments included in the Company’s financial statements include cash,
accounts payable and accrued expenses, accrued interest payable, loans payable to related parties, notes payable to third parties,
notes payable to related parties and derivative liability. Unless otherwise disclosed in the notes to the financial statements,
the carrying value of financial instruments is considered to approximate fair value due to the short maturity and characteristics
of those instruments. The carrying value of debt approximates fair value as terms approximate those currently available for similar
debt instruments.
Goodwill
After
completing the purchase price allocation, any residual of cost over fair value of the net identifiable assets and liabilities
was assigned to the unidentifiable asset, goodwill. Formerly subject to mandatory amortization, this now is not permitted to be
amortized at all, by any allocation scheme and over any useful life. Impairment testing, using a methodology at variance with
that set forth in FAS 144 (which, however, continues in effect for all other types of long-lived assets and intangibles other
than goodwill), must be applied periodically, and any computed impairment will be presented as a separate line item in that period’s
income statement, as a component of income from continuing operations (unless associated with discontinued operations, in which
case, the impairment would, net of income tax effects, be combined with the remaining effects of the discontinued operations.
In accordance with Statement No. 142, “Goodwill and Other Intangible Assets,” the Company does not amortize goodwill,
but performs impairment tests of the carrying value at least periodically.
Intangible
Assets
Intangible
assets are stated at the lesser of cost or fair value less accumulated amortization.
NOTE
C – ACQUISITION OF TCBM HOLDINGS, LLC
On
November 30, 2019, the Company acquired 100% ownership of TCBM Holdings, LLC (“TCBM”) and TCBM’s two wholly
owned subsidiaries, HMNRTH, LLC and 911 Help Now, LLC. The combination has been accounted for in the accompanying consolidated
financial statements as an “acquisition” transaction. Accordingly, the financial position and results of operation
of the Company prior to November 30, 2019 has been excluded from the accompanying consolidated financial statements. The Company
acquired a 100% interest in exchange for a Convertible Promissory Note in the amount of $2,000,000.
Details
regarding the book values and fair values of the net assets acquired are as follows:
|
|
Book
Value
|
|
|
Fair
Value
|
|
|
Difference
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Cash
|
|
$
|
543,411
|
|
|
$
|
543,411
|
|
|
$
|
-
|
|
Inventory
|
|
|
70,580
|
|
|
|
70,580
|
|
|
|
-
|
|
Property
and Equipment
|
|
|
36,363
|
|
|
|
36,363
|
|
|
|
-
|
|
Total
|
|
$
|
650,354
|
|
|
$
|
650,354
|
|
|
$
|
-
|
|
NOTE
D - PROPERTY AND EQUIPMENT
|
|
03/31/2020
|
|
|
06/30/2019
|
|
|
06/30/2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Property
and Equipment
|
|
$
|
34,631
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total
|
|
$
|
34,631
|
|
|
$
|
-
|
|
|
$
|
-
|
|
NOTE
E – ACCRUED OFFICER AND DIRECTOR COMPENSATION
Accrued
officer and director compensation is due to Wayne Anderson, the sole officer and director of the Company, and consists of:
|
|
03/31/2020
|
|
|
06/30/2019
|
|
|
06/30/2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Pursuant
to January 26, 2018 Board of Directors Service Agreement
|
|
$
|
99,803
|
|
|
$
|
39,803
|
|
|
$
|
-
|
|
Total
|
|
$
|
99,803
|
|
|
$
|
39,803
|
|
|
$
|
-
|
|
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
E – ACCRUED OFFICER AND DIRECTOR COMPENSATION (cont’d)
For
the nine months ended March 31, 2020 and years ended June 30, 2019 and 2018, the balance of accrued officer and
director compensation changed as follows:
|
|
Pursuant
to
Employment
Agreements
|
|
|
Pursuant
to
Board of
Directors
Services
Agreements
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June
30, 2017
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Officer’s/director’s
compensation for the year ended June 30, 2018 (including stock-based compensation of $20,000)
|
|
|
-
|
|
|
|
40,000
|
|
|
|
40,000
|
|
Cash
compensation to director
|
|
|
-
|
|
|
|
(6,700
|
)
|
|
|
(6,700
|
)
|
Balance, June
30, 2018
|
|
|
-
|
|
|
|
33,300
|
|
|
|
33,300
|
|
Officer’s/director’s
compensation for year ended June 30, 2019 (including stock-based compensation of $40,000)
|
|
|
-
|
|
|
|
80,000
|
|
|
|
80,000
|
|
Balance June
30, 2019
|
|
|
-
|
|
|
|
113,300
|
|
|
|
113,300
|
|
Officer’s/director’s
compensation for the three months ended September 30, 2019 (including stock-based compensation of $10,000)
|
|
|
-
|
|
|
|
20,000
|
|
|
|
20,000
|
|
Balances at
September 30, 2019 (Unaudited)
|
|
|
-
|
|
|
|
133,300
|
|
|
|
133,300
|
|
Officer’s/director’s
compensation for the three months ended December 31, 2019 (including stock-based compensation of $10,000)
|
|
|
-
|
|
|
|
20,000
|
|
|
|
20,000
|
|
Balances at
December 31, 2019 (Unaudited)
|
|
|
-
|
|
|
|
153,300
|
|
|
|
153,300
|
|
Officer’s/director’s
compensation for the three months ended March 31, 2020 (including stock-based compensation of $10,000)
|
|
|
-
|
|
|
|
20,000
|
|
|
|
20,000
|
|
Balances
at March 31, 2020 (Unaudited)
|
|
$
|
-
|
|
|
$
|
173,300
|
|
|
$
|
173,300
|
|
NOTE
F - NOTES PAYABLE, THIRD PARTIES
Notes
payable to third parties consist of:
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Convertible
Promissory Note dated January 24, 2018 payable to Tri-Bridge Ventures, LLC (“Tri-Bridge”), interest at 10%, due
January 24, 2019-less unamortized debt discount of $0, $0 and $8,242 at March 31, 2020, June 30, 2019 and June 30,
2018, respectively (i)
|
|
$
|
15,750
|
|
|
$
|
15,750
|
|
|
$
|
7,508
|
|
Convertible
Promissory Note dated February 16, 2018 payable to Tri-Bridge Ventures, LLC (“Tri-Bridge”), interest at 10%, due
February 16, 2019-less unamortized debt discount of $0, $0 and $5,063 at March 31, 2020, June 30, 2019 and June 30,
2018, respectively (ii)
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
2,937
|
|
Convertible
Promissory Note dated June 3, 2018 payable to Valvasone Trust (“Valvasone”), interest at 5%, due June 3, 2019-less
unamortized debt discount of $0, $0 and $85,102 at March 31, 2020, June 30, 2019 and June 30, 2018, respectively (iii)
|
|
|
91,900
|
|
|
|
91,900
|
|
|
|
6,798
|
|
Convertible
Promissory Note dated June 29, 2018 payable to Jody A. DellaDonna (“JDD”), interest at 5%, due June 29, 2019-less
unamortized debt discount of $0, $0 and $24,863 at March 31, 2020, June 30, 2019 and June 30, 2018, respectively (iv)
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
137
|
|
Convertible
Promissory Note dated November 30, 2019 payable to Jetco Holdings, LLC (“Jetco”), interest at 3%, due November
30, 2020-less unamortized debt discount of $757,577, $0 and $0 at March 31, 2020, June 30, 2019 and June 30,
2018, respectively (v)
|
|
|
380,346
|
|
|
|
-
|
|
|
|
-
|
|
Convertible
Promissory Note dated December 17, 2019 payable to Armada Investment Fund, LLC (“Armada”), interest at 8%, due
December 17, 2020-less unamortized debt discount of $5,805, $0 and $0 at March 31, 2020, June 30, 2019 and June
30, 2018, respectively (vi)
|
|
|
3,195
|
|
|
|
-
|
|
|
|
-
|
|
Convertible
Promissory Note dated March 20, 2020 payable to Jetco Holdings, LLC (“Jetco”), interest at 3%, due March 20, 2021-less
unamortized debt discount of $19,397, $0 and $0 at March 31, 2020, June 30, 2019 and June 30, 2018, respectively (vii)
|
|
|
603
|
|
|
|
-
|
|
|
|
-
|
|
Totals
|
|
$
|
524,794
|
|
|
$
|
140,650
|
|
|
$
|
17,380
|
|
(i)
|
On
January 24, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Tri-Bridge Ventures,
LLC in the principal amount of $15,750. The Convertible Note was fully funded on January 24, 2018. The Convertible Note is
convertible, in whole or in part, at any time and from time to time before maturity (January 24, 2019) at the option of the
holder. The Conversion Price shall be equal to Fifty Percent (50%) of the lowest Trading Price (defined below) during the
Valuation Period (defined below), and the Conversion Amount shall be the amount of principal or interest electively converted
in the Conversion Notice. The total number of shares due under any conversion notice (“Notice Shares”) will be
equal to the Conversion Amount divided by the Conversion Price. On the date that a Conversion Notice is delivered to Holder,
the Company shall deliver an estimated number of shares (“Estimated Shares”) to Holder’s brokerage account
equal to the Conversion Amount divided by 50% of the Market Price. “Market Price” shall mean the lowest of the
daily Trading Price for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day
prior to the Conversion Date. The “Valuation Period” shall mean twenty (20) Trading Days, commencing on the first
Trading Day following delivery and clearing of the Notice Shares in Holder’s brokerage account, as reported by Holder
(“Valuation Start Date”). If at any time, one or multiple times, during the Valuation Period the number of Estimated
Shares delivered to Holder is less than the Notice Shares, the company must immediately deliver enough shares equal to the
difference. A Conversion Amount will not be considered fully converted until the end of the Valuation Period for that Conversion
Amount. “Trading Price” means, for any security as of any date, any trading price on the OTC Bulletin Board, or
other applicable trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”)
mutually acceptable to Maker and Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security,
the price of such security on the principal securities exchange or trading market where such security is listed or traded.
“Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCBB, or on the
principal securities The Convertible Note has a term of one (1) year and bears interest at 10% annually. As of March 31,
2020, $15,750 principal plus $3,435 interest were due.
|
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
(ii)
|
On
February 16, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Tri-Bridge Ventures,
LLC in the principal amount of $8,000. The Convertible Note was fully funded on February 16, 2018. The Convertible Note is
convertible, in whole or in part, at any time and from time to time before maturity (February 16, 2019) at the option of the
holder at the Variable Conversion Price, which shall be equal to the lesser of (i) the price of any public offering of the
Maker’s Common Stock or (ii) Fifty Percent (50%) of the lowest Trading Price (defined below) during the Twenty Trading
Day period prior to the day the Holder delivers the Conversion Notice, and the Conversion Amount shall be the amount of principal
or interest electively converted in the Conversion Notice. “Trading Price” means, for any security as of any date,
any trading price on the OTC Bulletin Board, or other applicable trading market (the “OTCBB”) as reported by a
reliable reporting service (“Reporting Service”) mutually acceptable to Maker and Holder (i.e. Bloomberg) or,
if the OTCBB is not the principal trading market for such security, the price of such security on the principal securities
exchange or trading market where such security is listed or traded. “Trading Day” shall mean any day on which
the Common Stock is tradable for any period on the OTCBB, or on the principal securities exchange or other securities market
on which the Common Stock is then being traded. The Convertible Note has a term of one (1) year and bears interest at 10%
annually. As of March 31, 2020, $8,000 principal plus $1,694 interest were due.
|
|
|
(iii)
|
On
June 3, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Valvasone Trust in the
principal amount of $91.900. The Convertible Note was issued for compensation due for consulting services. The Convertible
Note is convertible, in whole or in part, at any time and from time to time before maturity (June 3, 2019) at the option of
the holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price of the Company’s
common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the
Note or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive Trading Days prior
to the Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually. As of March 31,
2020, $91,900 principal plus $8,381 interest were due.
|
|
|
(iv)
|
On
June 29, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Jody A. DellaDonna
in the principal amount of $25,000. The Convertible Note was issued for compensation due for consulting services. The Convertible
Note is convertible, in whole or in part, at any time and from time to time before maturity (June 29, 2019) at the option
of the holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price of the Company’s
common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the
Note or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive Trading Days prior
to the Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually. As of March 31,
2020, $25,000 principal plus $2,194 interest were due.
|
|
|
(v)
|
On
November 30, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Jetco Holdings,
LLC in the principal amount of $2,000,000. The Convertible Note was Issued as part of the Purchase and Sale Agreement for
the acquisition of TCBM Holdings, LLC. The Convertible Note is convertible, in whole or in part, at any time and from time
to time before maturity (November 30, 2020) at the option of the holder. The conversion price for the principal and
interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing
a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price”
means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period
ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security
as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the
“OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder
(i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities
exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security
is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are
quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 3% annually. As of March
31, 2020, $1,137,923 principal plus $19,038 interest were due.
|
|
|
(vi)
|
On
December 17, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”)
with Armada Capital Partners, LLC (“Armada”) wherein the Company issued Armada
a Convertible Promissory Note (the “Convertible Note”) in the amount of $11,000
($1,000 OID). The Convertible Note has a term of one (1) year (due on December 17, 2020)
and bears interest at 8% annually. The Convertible Note is convertible, in whole or in
part, at any time and from time to time before maturity (March 20, 2021) at the option
of the holder. The conversion price for the principal and interest in connection with
voluntary conversions by the Holder shall be 60% multiplied by the Market Price (as defined
herein)(representing a discount rate of 40%), subject to adjustment as described herein
(“Conversion Price”). Market Price” means the lowest one (1)
Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading
Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading
Prices” means, for any security as of any date, the lowest traded price on the
Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”)
as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market
for such security, on the principal securities exchange or trading market where such
security is listed or traded or, if the lowest intraday trading price of such security
is not available in any of the foregoing manners, the lowest intraday price of any market
makers for such security that are quoted on the OTC Markets. As part and parcel of the
foregoing transaction, Armada was issued a warrant granting the holder the right to purchase
up to 560,800 shares of the Company’s common stock at an exercise price of $0.024
for a term of 5-years. The transaction closed on December 17, 2019. In addition, 10,000,000
shares of the Company’s common stock have been reserved at Pacific Stock Transfer
Corporation for possible issuance upon the conversion of the Note into shares of our
common stock. As of March 31, 2020, $11,000 principal plus $253 interest were due.
|
|
|
(vii)
|
On
March 20, 2020, the Company executed a Convertible Note (the “Convertible Note”) payable to Jetco Holdings, LLC
in the principal amount of $20,000. The Convertible Note is convertible, in whole or in part, at any time and from time to
time before maturity (March 20, 2021) at the option of the holder. The conversion price for the principal and interest in
connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing
a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price”
means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period
ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security
as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the
“OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder
(i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities
exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security
is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are
quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 3% annually. As of March
31, 2020, $20,000 principal plus $18 interest were due.
|
NOTE
G - NOTES PAYABLE, RELATED PARTIES
Notes
payable to related parties consist of:
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Unsecured
Convertible Promissory Notes dated July 27, 2018, payable to Around the Clock Partners, LP (entity controlled by Wayne Anderson),
interest at 5%, due July 27, 2019- less unamortized debt discount of $0, $8,890 and $0 at March 31, 2020, June 30,
2019 and June 30, 2018, respectively (i)
|
|
$
|
124,800
|
|
|
$
|
115,910
|
|
|
$
|
-
|
|
Total
|
|
$
|
124,800
|
|
|
$
|
115,910
|
|
|
$
|
-
|
|
(i)
|
On
July 27, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Around the Clock Partners,
LP in the principal amount of $124,800. The Convertible Note was issued for compensation due for consulting services. The
Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (July 27, 2019) at
the option of the holder at the conversion price which shall be equal to the lower of: (a) 50% of the lowest trading price
of the Company’s common stock during the 25 consecutive Trading Days prior to the date on which Holder elects to convert
all or part of the Note or (b) 50% of the lowest trading price of the Company’s common stock during the 25 consecutive
Trading Days prior to the Effective Date. The Convertible Note has a term of one (1) year and bears interest at 5% annually.
As of March 31, 2020, $124,800 principal plus $10,471 interest were due.
|
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
H - DERIVATIVE LIABILITY
The
derivative liability at March 31, 2020, June 30, 2019 and June 30, 2018 consisted of:
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Convertible
Promissory Notes payable to Tri-Bridge Ventures, LLC. Please see NOTE F – NOTES PAYABLE, THIRD PARTIES for further
information
|
|
$
|
237,500
|
|
|
$
|
173,500
|
|
|
$
|
47,500
|
|
Convertible
Promissory Note payable to Valvasone Trust. Please see NOTE F – NOTES PAYABLE, THIRD PARTIES for further information
|
|
|
229,750
|
|
|
|
229,750
|
|
|
|
183,800
|
|
Convertible
Promissory Notes payable to Jody A. DellaDonna. Please see NOTE F – NOTES PAYABLE, THIRD PARTIES for further
information
|
|
|
62,500
|
|
|
|
62,500
|
|
|
|
50,000
|
|
Convertible
Promissory Note payable to Around the Clock Partners, LP. Please see NOTE G – NOTES PAYABLE, RELATED PARTIES
for further information
|
|
|
312,000
|
|
|
|
249,600
|
|
|
|
-
|
|
Convertible
Promissory Notes payable to Jetco Holdings, LLC. Please see NOTE G – NOTES PAYABLE, RELATED PARTIES for
further information
|
|
|
1,654,175
|
|
|
|
-
|
|
|
|
-
|
|
Convertible
Promissory Note payable to Armada Investment Fund, LLC. Please see NOTE G – NOTES PAYABLE, RELATED PARTIES for
further information
|
|
|
18,333
|
|
|
|
-
|
|
|
|
-
|
|
Total
derivative liability
|
|
$
|
2,514,259
|
|
|
$
|
715,350
|
|
|
$
|
281,300
|
|
The
Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price
of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is
indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the
respective issuance dates of the notes and charged the applicable amounts to debt discounts (limited to the face value of the
respective notes) and the remainder to other expenses. The increase (decrease) in the fair value of the derivative liability from
the respective issue dates of the notes to the measurement dates is charged (credited) to other expense (income).
The
fair value of the derivative liability was measured at the respective issuance dates and at March 31, 2020, June 30, 2019
and June 30, 2018 using the Black Scholes option pricing model. Assumptions used for the calculation of the derivative liability
of the Notes at March 31, 2020 were (1) stock price of $0.0001 per share, (2) conversion prices ranging from $0.00001 to
$0.00004 per share, (3) term of 6 months to 1 year, (4) expected volatility of 2496.66%, and (5) risk free interest rate of 0.15%
to 0.17%. Assumptions used for the calculation of the derivative liability of the Notes at June 30, 2019 were (1) stock
price of $0.0001 per share, (2) conversion price of $0.00005 per share, (3) terms ranging from 1 month to 6 months, (4) expected
volatility of 1950.57%, and (5) risk free interest rates ranging from 2.09% to 2.18%. Assumptions used for the calculation of
the derivative liability of the Notes at June 30, 2018 were (1) stock price of $0.0001 per share, (2) conversion price of $0.00005
per share, (3) terms ranging from 208 days to 12 months, (4) expected volatility of 1725.52%, and (5) risk free interest rates
ranging from 2.07% to 2.33%.
NOTE
I - CAPITAL STOCK
Preferred
Stock
Filed
with the State of Delaware:
On
September 30, 1999, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated
Series A 8% Convertible Preferred Stock, par value $0.01. The designation of the new Series A 8% Convertible Preferred Stock was
approved by the Board of Directors on August 16, 1999. The Company is authorized to issue 3,000 shares of the Series A 8% Convertible
Preferred Stock. At March 31, 2020, June 30, 2019 and 2018, the Company had 0, 0 and 0 shares issued and outstanding, respectively.
On
September 30, 1999, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated
Series B 8% Convertible Preferred Stock, par value $0.01. The designation of the new Series B 8% Convertible Preferred Stock was
approved by the Board of Directors on August 16, 1999. The Company is authorized to issue 3,000 shares of the Series B 8% Convertible
Preferred Stock. At March 31, 2020, June 30, 2019 and 2018, the Company had 0, 0 and 0 shares issued and outstanding, respectively.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
On
February 15, 2000, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated
Series C 5% Convertible Preferred Stock, par value $0.01. The designation of the new Series C 5% Convertible Preferred Stock was
approved by the Board of Directors on February 14, 2000. The Company is authorized to issue 1,000 shares of the Series C 5% Convertible
Preferred Stock. At March 31, 2020, June 30, 2019 and 2018, the Company had 0, 0 and 0 shares issued and outstanding, respectively.
On
April 26, 2001, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
D Convertible Preferred Stock, par value $0.01. The designation of the new Series D Convertible Preferred Stock was approved by
the Board of Directors on April 26, 2001. The Company is authorized to issue 800 shares of the Series D Convertible Preferred
Stock. At March 31, 2020, June 30, 2019 and 2018, the Company had 0, 0 and 0 shares issued and outstanding, respectively.
On
June 28, 2001, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
E 8% Convertible Preferred Stock, par value $0.01. The designation of the new Series E 8% Convertible Preferred Stock was approved
by the Board of Directors on March 30, 2001. The Company is authorized to issue 250 shares of the Series E Convertible Preferred
Stock. At March 31, 2020, June 30, 2019 and 2018, the Company had 0, 0 and 0 shares issued and outstanding, respectively.
Series
K Super Voting Preferred Stock
On
July 31, 2019, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
K Super Voting Preferred Stock, par value $0.01. The designation of the new Series K Super Voting Preferred Stock was approved
by the Board of Directors on July 16, 2019. The Company is authorized to issue three (3) shares of the Series K Super Voting Preferred
Stock. At March 31, 2020, June 30, 2019 and 2018, the Company had 3, 0 and 0 shares issued and outstanding, respectively.
Dividends.
Initially, there will be no dividends due or payable on the Series K Super Voting Preferred Stock. Any future terms with respect
to dividends shall be determined by the Board consistent with the Corporation’s Certificate of Incorporation. Any and all
such future terms concerning dividends shall be reflected in an amendment to this Certificate, which the Board shall promptly
file or cause to be filed.
Liquidation
and Redemption Rights. Upon the occurrence of a Liquidation Event (as defined below), the holders of Series K Super Voting
Preferred Stock are entitled to receive net assets on a pro-rata basis. Each holder of Series K Super Voting Preferred Stock is
entitled to receive ratably any dividends declared by the Board, if any, out of funds legally available for the payment of dividends.
As used herein, “Liquidation Event” means (i) the liquidation, dissolution or winding-up, whether voluntary or involuntary,
of the Corporation, (ii) the purchase or redemption by the Corporation of shares of any class of stock or the merger or consolidation
of the Corporation with or into any other corporation or corporations, unless (a) the holders of the Series K Super Voting Preferred
Stock receive securities of the surviving Corporation having substantially similar rights as the Series K Super Voting Preferred
Stock and the stockholders of the Corporation immediately prior to such transaction are holders of at least a majority of the
voting securities of the successor Corporation immediately thereafter (the “Permitted Merger”), unless the holders
of the shares of Series K Super Voting Preferred Stock elect otherwise or (b) the sale, license or lease of all or substantially
all, or any material part of, the Corporation’s assets, unless the holders of Series K Super Voting Preferred Stock elect
otherwise.
Conversion.
No conversion of the Series K Super Voting Preferred Stock is permitted.
Rank.
All shares of the Series K Super Voting Preferred Stock shall rank (i) senior to the Corporation’s (A) Common Stock, par
value $0.0001 per share (“Common Stock”), and any other class or series of capital stock of the Corporation hereafter
created, except as otherwise provided in clauses (ii) and (iii) of this Section 4, (ii) pari passu with any class or series
of capital stock of the Corporation hereafter created and specifically ranking, by its terms, on par with the Series K Super Voting
Preferred-Stock and (iii) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking,
by its terms, senior to the Series K Preferred Stock, in each case as to distribution of assets upon liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary.
Voting
Rights.
A.
If at least one share of Series K Super Voting Preferred Stock is issued and outstanding, then the total aggregate issued shares
of Series K Super Voting Preferred Stock at any given time, regardless of their number, shall have voting rights equal to 20 times
the sum of: i) the total number of shares of Common stock which are issued and outstanding at the time of voting, plus ii) the
total number of shares of any and all Preferred stocks which are issued and outstanding at the time of voting.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
B.
Each individual share of Series K Super Voting Preferred Stock shall have the voting rights equal to:
[twenty
times the sum of: {all shares of Common stock issued and outstanding at the time of voting + all shares of any other Preferred
stocks issued and outstanding at the time of voting}]
Divided
by:
[the
number of shares of Series K Super Voting Preferred Stock issued and outstanding at the time of voting]
With
respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the
holders of the outstanding shares of Series K Super Voting Preferred Stock shall vote together with the holders of Common Stock
without regard to class, except as to those matters on which separate class voting is required by applicable law or the Certificate
of Incorporation or By-laws.
Series
L Preferred Stock
On
July 31, 2019, the Company filed a Certificate of Designations, Rights, Preferences and Limitations for a newly designated Series
L Preferred Stock, par value $0.01. The designation of the new Series L Preferred Stock was approved by the Board of Directors
on July 16, 2019. The Company is authorized to issue five hundred thousand (500,000) shares of the Series L Preferred Stock. At
March 31, 2020, June 30, 2019 and 2018, the Company had 10, 0 and 0 shares issued and outstanding, respectively.
Dividends.
The holders of Series L Preferred Stock shall be entitled to receive dividends when, as and if declared by the Board of Directors,
in its sole discretion.
Voting.
a.
If at least one share of Series L Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series
L Preferred Stock at any given time, regardless of their number, shall have voting rights equal to four times the sum of: i) the
total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares
of all series of Preferred Stock which are issued and outstanding at the time of voting.
b.
Each individual share of Series L Preferred Stock shall have the voting rights equal to:
[four
times the sum of: {all shares of Common Stock issued and outstanding at time of voting + the total number of shares of all series
of Preferred Stock issued and outstanding at time of voting}]
divided
by:
[the
number of shares of Series L Preferred Stock issued and outstanding at the time of voting]
Conversion
Rights.
a)
Outstanding. If at least one share of Series L Preferred Stock is issued and outstanding, then the total aggregate issued
shares of Series L Preferred Stock at any given time, regardless of their number, shall be convertible into the number of shares
of Common Stock defined by the formula set forth is section 4.b.
b)
Method of Conversion.
i.
Procedure- Before any holder of Series L Preferred Stock shall be entitled to convert the same into shares of common stock, such
holder shall surrender the certificate or certificates therefore, duly endorsed, at the office of the Company or of any transfer
agent for the Series L Preferred Stock, and shall give written notice 5 business days prior to date of conversion to the Company
at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of common stock are to be issued. The Company shall, within five business days, issue and
deliver at such office to such holder of Series L Preferred Stock, or to the nominee or nominees of such holder, a certificate
or certificates for the number of shares of common stock to which such holder shall be entitled as aforesaid. Conversion shall
be deemed to have been effected on the date when delivery of notice of an election to convert and certificates for shares is made,
and such date is referred to herein as the “Conversion Date.”
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
ii.
Issuance- Shares of Series L Preferred Stock may only be issued in exchange for the partial or full retirement of debt held by
Management, Employees, Consultants or as directed by a majority vote of the Board of Directors. The number of Shares of Series
L Preferred Stock to be issued to each qualified person (member of Management, Employee or Consultant) holding a Note shall be
determined by the following formula:
For
retirement of debt: One (1) share of Series L Preferred stock shall be issued for each Five Thousand Dollar ($5,000) tranche of
outstanding liability. As an example: If an officer has accrued wages due to him or her in the amount of $25,000, the officer
can elect to accept 5 shares of Series L Preferred stock to satisfy the outstanding obligation of the Company.
iii.
Calculation for conversion into Common Stock- Each individual share of Series L Preferred Stock shall be convertible into the
number of shares of Common Stock equal to:
[5000]
divided
by:
[.50
times the lowest closing price of the Company’s common stock for the immediate five-day period prior to the receipt of the
Notice of Conversion remitted to the Company by the Series L Preferred stockholder]
Common
Stock
Class
A and Class B:
Identical
Rights. Except as otherwise expressly provided in ARTICLE FIVE of the Company’s Amended and Restated Certificate of
Incorporation dated August 13, 1999, all Common Shares shall be identical and shall entitle the holders thereof to the same rights
and privileges.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
Stock
Splits. The Corporation shall not in any manner subdivide (by any stock split, reclassification, stock dividend, recapitalization,
or otherwise) or combine the outstanding shares of one class of Common Shares unless the outstanding shares of all classes of
Common Shares shall be proportionately subdivided or combined.
Liquidation
Rights. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation, after
payment shall have been made to holders of outstanding Preferred Shares, if any, of the full amount to which they are entitled
pursuant to the Certificate of Incorporation, the holders of Common Shares shall be entitled, to the exclusion of the holders
of the Preferred Shares, if any, to share ratably, in accordance with the number of Common Shares held by each such holder, in
all remaining assets of the Corporation available for distribution among the holders of Common Shares, whether such assets are
capital, surplus, or earnings. For the purposes of this paragraph, neither the consolidation or merger of the Corporation with
or into any other corporation or corporations in which the stockholders of the Corporation receive capital stock and/or securities
(including debt securities) of the acquiring corporation (or of the direct or indirect parent corporation of the acquiring corporation)
nor the sale, lease or transfer of the Corporation, shall be deemed to be a voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation as those terms are used in this paragraph.
Voting
Rights.
(a)
The holders of the Class A Shares and the Class B Shares shall vote as a single class on all matters submitted to a vote of the
stockholders, with each Class A Share being entitled to one (1) vote and each Class B Share being entitled to six (6) votes, except
as otherwise provided by law.
(b)
The holders of Class A Shares and Class B Shares are not entitled to cumulative votes in the election of any directors.
Preemptive
or Subscription Rights. No holder of Common Shares shall be entitled to preemptive or subscription rights.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
Conversion
Rights.
(a)
Automatic Conversion. Each Class B Share shall (subject to receipt of any and all necessary approvals) convert automatically into
one fully paid and non-assessable Class A Share (i) upon its sale, gift, or other transfer to a party other than a Principal Stockholder
(as defined below) or an Affiliate of a Principal Stockholder (as defined below), (ii) upon the death of the Class B Stockholder
holding such Class B Share, unless the Class B Shares are transferred by operation of law to a Principal Stockholder or an Affiliate
of a Principal Stockholder, or (iii) in the event of a sale, gift, or other transfer of a Class B Share to an Affiliate of a Principal
Stockholder, upon the death of the transferor. Each of the foregoing automatic conversion events shall be referred to hereinafter
as an “Event of Automatic Conversion.” For purposes of this ARTICLE FIVE, “Principal Stockholder” includes
any of Donald H. Goldman, Steven M. Fieldman, Lance Fieldman, Yuri Itkis, Michall Itkis and Boris Itkis and an “Affiliate
of a Principal Stockholder” is a person that directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified. For purposes of this definition, “control,”
when used with respect to any specified person, means the power to direct or cause the direction of the management, and policies
of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Without
limitation, an Affiliate also includes the estate of such individual.
(b)
Voluntary Conversion. Each Class B Share shall be convertible at the option of the holder, for no additional consideration, into
one fully paid and non-assessable Class A Share at any time.
(c)
Conversion Procedure. Promptly upon the occurrence of an Event of Automatic Conversion such that Class B shares are converted
automatically into Class A Shares, or upon the voluntary conversion by the holder, the holder of such shares shall surrender the
certificate or certificates therefor, duly endorsed in blank or accompanied by proper instruments of transfer, at the office of
the Corporation or of any transfer agent for the Class A Shares, and shall give written notice to the Corporation at such office
(i) stating that the shares are being converted pursuant to an Event of Automatic Conversion into Class A Shares as provided in
subparagraph 5.6(a) hereof or a voluntary conversion as provided in subparagraph 5.6(b) hereof, (ii) specifying the Event of Automatic
Conversion (and, if the occurrence of such event is within the control of the transferor, stating the transferor’s intent
to effect an Event of Automatic Conversion) or whether such conversion is voluntary, (iii) identifying the number of Class B Shares
being converted, and (iv) setting out the name or names (with addresses) and denominations in which the certificate or certificates
for Class A Shares shall be issued and including instructions for delivery thereof. Delivery of such notice together with the
certificates representing the Class B Shares shall obligate the Corporation to issue such Class A Shares and the Corporation shall
be justified in relying upon the information and the certification contained in such notice and shall not be liable for the result
of any inaccuracy with respect thereto. Thereupon, the Corporation or its transfer agent shall promptly issue and deliver at such
stated address to such holder or to the transferee of Class B Shares a certificate or certificates for the number of Class A Shares
to which such holder or transferee is entitled, registered in the name of such holder, the designee of such holder or transferee,
as specified in such notice. To the extent permitted by law, conversion pursuant to (i) an Event of Automatic Conversion shall
be deemed to have been effected as of the date on which the Event of Automatic Conversion occurred or (ii) a voluntary conversion
shall be deemed to have been effected as of the date the Corporation receives the written notice pursuant to this subparagraph
(c) (each date being the “Conversion Date”). The person entitled to receive the Class A Shares issuable upon such
conversion shall be treated for all purposes as the record holder of such Class A Shares at and as of the Conversion Date, and
the right of such person as the holder of Class B Shares shall cease and terminate at and as of the Conversion Date, in each case
without regard to any failure by the holder to deliver the certificates or the notice by this subparagraph (c).
(d)
Unconverted Shares. In the event of the conversion of fewer than all of the Class B Shares evidenced by a certificate surrendered
to the Corporation in accordance with the procedures of this Paragraph 5.6, the Corporation shall execute and deliver to or upon
the written order of the holder of such certificate, without charge to such holder, a new certificate evidencing the number of
Class B Shares not converted.
(e)
Reissue of Shares. Class B Shares that are converted into Class A Shares as provided herein shall be retired and canceled and
shall not be reissued.
(f)
Reservation. The Corporation hereby reserves and shall at all times reserve and keep available, out of its authorized and unissued
Class A Shares, for the purpose of effecting conversions, such number of duly authorized Class A Shares as shall from time to
time be sufficient to effect the conversion of all outstanding Class B Shares. The Corporation covenants that all the Class A
Shares so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable, and free from liens and charges
with respect to the issue. The Corporation will take all such action as may be necessary to assure that all such Class A Shares
may be so issued without violation of any applicable law or regulation, or any of the requirements of any national securities
exchange upon which the Class A Shares may be listed. The Corporation will not take any action that results in any adjustment
of the conversion ratio if the total number of Class A Shares issued and issuable after such action upon conversion of the Class
B Shares would exceed the total number of Class A Shares then authorized by the Amended and Restated Certificate of Incorporation,
as amended.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
I - CAPITAL STOCK (cont’d)
At
March 31, 2020, June 30, 2019 and 2018, the Company is authorized to issue 14,991,000,000, 14,991,000,000 and 14,991,000,000
shares of Class A Common Stock, respectively. At March 31, 2020, June 30, 2019 and 2018, the Company has 12,189,293,609,
12,189,293,609 and 12,189,293,609 shares issued and outstanding, respectively. At March 31, 2020, June 30, 2019 and 2018,
the Company is authorized to issue 4,000,000, 4,000,000 and 4,000,000 shares of Class B Common Stock, respectively. At March
31, 2020, June 30, 2019 and 2018, the Company has 0, 0 and 0 shares issued and outstanding, respectively.
Common
Stock, Preferred Stock and Warrant Issuances
For
the nine months ended March 31, 2020 and fiscal years ended on June 30, 2019 and 2018, the Company issued
and/or sold the following unregistered securities:
Common
Stock:
2020
None
2019
None
2018
On
February 20, 2018, Wayne Anderson returned 100,000,000 shares of the Company’s Class A Common Stock in order for the Company
to enter a financing transaction with Tri-Bridge Ventures, LLC. The Company agreed to issue Mr. Anderson 200,000,000 shares of
its Class A Common Stock when shares were available under its authorized shares or to issue Mr. Anderson the equivalent of 200,000,000
shares upon an effective reverse stock split.
On
February 14, 2019, the Company issued 500,000,000 shares of its Class A Common Stock to Jody A. DellaDonna as payment for services
rendered on behalf of the Company.
On
February 2, 2018, the Company issued 500,000,000 shares of its Class A Common Stock to a Valvasone Trust affiliate as payment
for services rendered on behalf of the Company.
On
February 2, 2018, the Company issued 1,000,000,000 shares of its Class A Common Stock to Wayne Anderson, the Company’s chief
executive officer and sole officer and director of the Company for services rendered on behalf of the Company.
Preferred
Stock:
On
August 2, 2019, the Company issued three (3) shares of its Series K Super Voting Preferred Stock to its sole officer and director,
Jimmy Wayne Anderson.
On
September 2, 2019, the Company issued ten (10) shares of its Series L Preferred Stock to Sylios Corp, an entity controlled by
the Company’s sole officer and director.
Warrants
and Options:
On
December 17, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Armada Capital
Partners, LLC (“Armada”) wherein the Company issued Armada a Convertible Promissory Note (the “Note”)
in the amount of $11,000 ($1,000 OID). The Note has a term of one (1) year (due on December 17, 2020) and bears interest at 8%
annually. As part and parcel of the foregoing transaction, Armada was issued a warrant granting the holder the right to purchase
up to 560,800 shares of the Company’s common stock at an exercise price of $0.024 for a term of 5-years. The transaction
closed on December 17, 2019. Please see NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES for further information.
NOTE
J - INCOME TAXES
The
Company accounts for income taxes using the asset and liability method described in SFAS No. 109, “Accounting For Income
Taxes”, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between
the financial reporting and the tax basis of the Company’s assets and liabilities at the enacted tax rates expected to be
in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it
is more likely than not that some portion or all of the deferred tax assets will not be realized. In recognition of the uncertainty
regarding the ultimate amount of income tax benefits to be derived, the Company has recorded a full valuation allowance at March
31, 2020, June 30, 2019 and 2018.
The
provision (benefit) for income taxes includes income taxes currently payable and those deferred because of temporary differences
between the financial statement and tax bases of assets and liabilities.
Significant
components of the Company’s deferred tax assets and liabilities are calculated at an estimated effective tax rate of 21%.
(35% for tax year 2017)
The
provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income
tax rate for the periods presented to income (loss) before income taxes. The income tax rate was 21% for the nine months ended
March 31, 2020 and year ended June 30, 2019 and 35% for the year ended June 30, 2018. The sources of the difference are as follows:
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
J - INCOME TAXES (cont’d)
|
|
Nine
Months Ended
|
|
|
Year
Ended
|
|
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
Expected
tax at 21%, 21% and 35%, respectively
|
|
$
|
(164,659
|
)
|
|
$
|
(161,718
|
)
|
|
$
|
(108,819
|
)
|
Non-deductible
stock-based compensation
|
|
|
8,400
|
|
|
|
8,400
|
|
|
|
73,500
|
|
Non-deductible
loss (nontaxable income) from derivative liability
|
|
|
(46,872
|
)
|
|
|
69,943
|
|
|
|
49,228
|
|
Non-deductible
amortization of debt discounts
|
|
|
261,795
|
|
|
|
50,228
|
|
|
|
6,083
|
|
Increase
(decrease) in Valuation allowance
|
|
|
(58,664
|
)
|
|
|
38,147
|
|
|
|
(19,992
|
)
|
Provision
for (benefit from) income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
(a)
|
As
a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, the United States corporate income tax rate is 21% effective
January 1, 2018.
|
All
tax years remain subject to examination by the Internal Revenue Service.
Significant
components of the Company’s deferred income tax are as follows:
|
|
March
31, 2020
|
|
|
June
30, 2019
|
|
|
June
30, 2018
|
|
Unpaid
accrued officer and director compensation
|
|
$
|
20,959
|
|
|
$
|
8,359
|
|
|
$
|
-
|
|
Net
operating loss carry-forwards
|
|
|
29,329,836
|
|
|
|
29,329,836
|
|
|
|
29,254,563
|
|
Valuation
allowance
|
|
|
(29,350,795
|
)
|
|
|
(29,338,195
|
)
|
|
|
(29,254,563
|
)
|
Net
non-current deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Based
on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax
asset of $29,350,795 attributable to the future utilization of the $20,959 timing difference relating to unpaid officer and director
compensation and the $29,329,836 net operating loss carryforward as of March 31, 2020 will be realized. Accordingly, the Company
has provided a 100% allowance against the deferred tax asset in the financial statements at March 31, 2020. The Company will continue
to review this valuation allowance and make adjustments as appropriate. $28,980,000 of the net operating loss carryforward expires
in the year 2022.
Current
tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership
occurs. Therefore, the amount available to offset future taxable income may be limited.
NOTE
K - COMMITMENTS AND CONTINGENCIES
Occupancy
Currently,
the Company shares office space with Sylios Corp at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701 and is not
required to reimburse Sylios Corp for monthly rent. The Company anticipates that this relationship will change with the additional
employees and it will be required to enter into a lease for a separate office space.
Employment
and Director Agreements
On
January 26, 2018, the Company executed a new Board of Directors Service Agreement with Jimmy Wayne Anderson. Under the terms of
the Agreement, commencing the first calendar quarter of 2018 the Company is to pay Mr. Anderson $10,000 per quarter for which
Mr. Anderson serves on the Board of Directors. In addition to cash compensation, the Company is to issue Mr. Anderson the equivalent
of $10,000 of the Company’s common stock on the last calendar day of each quarter. The calculation for the number of shares
to be issued to Mr. Anderson shall be as follows: $10,000/(Closing stock price on the last trading day of each quarter x .80).
Please see NOTE E – ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information.
NOTE
L - GOING CONCERN UNCERTAINTY
Under
ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability
to meet our future financial obligations as they become due within one year after the date that the financial statements are issued.
As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our
plans that have not been fully implemented as of the date the financial statements are issued.
In
performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability
to meet our financial obligations as they become due. We have a history of net losses: As of March 31, 2020 and June 30,
2019, we had an accumulated deficit of $161,170,512 and $160,386,420, respectively. For the nine months ended March
31, 2020 and for the year ended June 30, 2019, cash provided (used) from operating activities of $227,785 and $-,
respectively. We expect to continue to incur negative cash flows until such time as our operating segments generate sufficient
cash inflows to finance our operations and debt service requirements.
In
performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above
alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that
the financial statements are issued. Our future plans include securing additional funding sources that may include establishing
corporate partnerships, establishing licensing revenue agreements, issuing additional convertible debentures and issuing public
or private equity securities, including selling common stock through an at-the-market facility (ATM).
There
is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds
will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow
from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations
and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds,
if available, will be available on attractive terms or they will not have a significant dilutive effect on the Company’s
existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern
through September 2020.
GLOBAL
TECHNOLOGIES, LTD
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
For
the years ended June 30, 2019 and 2018 and nine months ended March 31, 2020 and 2019 (Unaudited)
NOTE
L - GOING CONCERN UNCERTAINTY (cont’d)
The
accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the
amounts and classification of liabilities that may result from our failure to continue as a going concern.
NOTE
M - SUBSEQUENT EVENTS
None.
EXHIBIT
INDEX
Exhibit
|
|
Description
|
|
|
|
3.1
|
|
Articles
of Incorporation of New IFT Corporation (previously filed with Form 10 on June 8, 2020)
|
3.2
|
|
Amended
and Restated Certificate of Incorporation of New IFT Corporation (previously filed with Form 10 on June 8, 2020)
|
3.3
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series A 8% Convertible Preferred Stock (previously filed with Form
10 on June 8, 2020)
|
3.4
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series B 8% Convertible Preferred Stock (previously filed with Form
10 on June 8, 2020)
|
3.5
|
|
Certificate
of Merger of Interactive Flight Technologies, Inc. into Global Technologies, Ltd (previously filed with Form 10 on June
8, 2020)
|
3.6
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series C Convertible Preferred Stock (previously filed with Form
10 on June 8, 2020)
|
3.7
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series D Convertible Preferred Stock (previously filed with Form
10 on June 8, 2020)
|
3.8
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series E 8% Convertible Preferred Stock (previously filed with Form
10 on June 8, 2020)
|
3.9
|
|
Certificate
of Amendment to the Company’s Amended and Restated Certificate of Incorporation (previously filed with Form 10 on
June 8, 2020)
|
3.10
|
|
Foreign
Profit Corporation Articles of Continuance filed with the State of Wyoming (previously filed with Form 10 on June 8, 2020)
|
3.11
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series K Super Voting Preferred Stock filed with the State of Wyoming
(previously filed with Form 10 on June 8, 2020)
|
3.12
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series L Preferred Stock filed with the State of Wyoming (previously
filed with Form 10 on June 8, 2020)
|
3.13*
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series K Super Voting Preferred Stock filed with the State of Delaware
(previously filed with Form 10 on June 8, 2020, revised Designation filed herewith)
|
3.14
|
|
Certificate
of Designation, Rights, Preferences and Limitations of Series L Preferred Stock filed with the State of Delaware (previously
filed with Form 10 on June 8, 2020)
|
4.1
|
|
Specimen
Certificate common stock (previously filed with Form 10 on June 8, 2020)
|
10.1
|
|
Board
of Directors Services Agreement with Jimmy Wayne Anderson dated January 26, 2018 (previously filed with Form 10 on June
8, 2020)
|
10.2
|
|
Convertible
Note between the Company and Tri-Bridge Ventures, LLC dated January 24, 2018 (previously filed with Form 10 on June 8,
2020)
|
10.3
|
|
Convertible
Note between the Company and Tri-Bridge Ventures, LLC dated February 16, 2018 (previously filed with Form 10 on June 8,
2020)
|
10.4
|
|
Convertible
Note between the Company and Valvasone Trust dated June 3 2018 (previously filed with Form 10 on June 8, 2020)
|
10.5
|
|
Convertible
Note between the Company and Jody A. DellaDonna dated June 29, 2018 (previously filed with Form 10 on June 8, 2020)
|
10.6
|
|
Convertible
Note between the Company and Around the Clock Partners, LP dated July 27, 2018 (previously filed with Form 10 on June 8,
2020)
|
10.7
|
|
Indemnification
Agreement between the Company and Jimmy Wayne Anderson dated January 25, 2018 (previously filed with Form 10 on June 8,
2020)
|
10.8
|
|
Consulting
Agreement between Global Technologies, Ltd and Sylios Corp dated August 22, 2019 (previously filed with Form 10 on June
8, 2020)
|
10.9
|
|
Securities
Purchase Agreement between Global Technologies, Ltd and Armada Capital Partners, LLC dated December 13, 2019 (previously
filed with Form 10 on June 8, 2020)
|
10.10
|
|
Convertible
Promissory Note between Global Technologies, Ltd and Armada Capital Partners, LLC dated December 13, 2019 (previously filed
with Form 10 on June 8, 2020)
|
10.11
|
|
Common
Stock Purchase Warrant Agreement between Global Technologies, Ltd and Armada Capital Partners, LLC dated December 13, 2019
(previously filed with Form 10 on June 8, 2020)
|
10.12
|
|
TCBM,
LLC Purchase and Sale Agreement dated November 30, 2019 (previously filed with Form 10 on June 8, 2020)
|
10.13
|
|
Convertible
Promissory Note between Global Technologies, Ltd and Jetco Holdings, LLC dated March 20, 2020 (previously filed with Form
10 on June 8, 2020)
|
10.14
|
|
Securities
Purchase Agreement between Global Technologies, Ltd and Jetco Holdings, LLC dated March 20, 2020 (previously filed with
Form 10 on June 8, 2020)
|
10.15
|
|
Consulting
Agreement between Global Technologies, Ltd and Brian McFadden dated January 2, 2020 (previously filed with Form 10 on June
8, 2020)
|
10.16
|
|
Consulting
Agreement between Global Technologies, Ltd and Timothy Cabrera dated January 2, 2020 (previously filed with Form 10 on
June 8, 2020)
|
10.17
|
|
Asset
Purchase Agreement between HMNRTH, LLC, TCBM Holdings, LLC and Edison Nation, Inc. and Scalematix, LLC dated March 11, 2020
(previously filed with Form 10 on June 8, 2020)
|
21.1
|
|
Articles
of Organization for Markets on Main, LLC dated April 2, 2020 (previously filed with Form 10 on June 8, 2020)
|
21.2
|
|
Certificate
of Formation TCBM Holdings, LLC dated (previously filed with Form 10 on June 8, 2020)
|
21.3
|
|
Certificate
of Formation of HMNRTH, LLC dated July 30, 2019 (previously filed with Form 10 on June 8, 2020)
|
21.4
|
|
Certificate
of Formation of 911 Help Now, LLC dated February 2, 2018 (previously filed with Form 10 on June 8, 2020)
|
23.2*
|
|
Consent of Fruci & Associates, PLLC
|
Graphic
|
|
Corporate
logo- Global Technologies, Ltd
|
*Filed herewith
SIGNATURES
Pursuant
to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1
to registration statement on Form 10 to be signed on its behalf by the undersigned, thereunto duly authorized.
GLOBAL
TECHNOLOGIES, LTD
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Jimmy Wayne Anderson
|
|
President
(Principal Executive Officer), Acting Chief Financial Officer
|
|
July
24, 2020
|
|
|
(Principal
Accounting Officer) and Chairman of the Board of Directors
|
|
|
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