Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
NOTE
1 - CONDENSED FINANCIAL STATEMENTS
A)
CONSOLIDATION
The
accompanying consolidated financial statements have been prepared by GLOBAL TECH INDUSTRIES GROUP, INC. (“the Company”) without
audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and cash flows at March 31, 2021, and for all periods presented herein, have been made.
The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation
S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements
pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive
financial statements and should be read in conjunction with our audited consolidated financial statements included in our Annual Report
on Form 10-K for the year ended December 31, 2020. The results of operations for the period ended March 31, 2021 are not necessarily
indicative of the operating results for the full year.
The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as disclosed in
Note 2 below. All significant inter-company balances and transactions have been eliminated.
B)
GOING CONCERN
The
Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of
America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course
of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to
continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced
to cease operations. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.
In
order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan
is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its
operating expenses and seeking equity and/or debt financing. The Company expects with the acquisitions of GTI and subsequent acquisition
of Bronx Family Eye Care, that these operations with help support the cashflow needs of the Company. Management also expects with the
commencement of revenue generating operations from GTI and Bronx, that the warrants issued to shareholders will be exercised in the near
future, thus providing capital for the Company and it’s growth plans. However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in
the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated
financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
On
March 11, 2020, the World Health Organization declared the outbreak of a coronavirus (COVID-19) a pandemic. As a result, economic uncertainties
have arisen which have the potential to negatively impact the Company’s ability to raise funding from the markets. Other financial
impact could occur though such potential impact is unknown at this time.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES
A)
PRINCIPLES OF CONSOLIDATION
The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Ludicrous, Inc.,
TTI Strategic Acquisitions and Equity Group, Inc, TTII Oil & Gas, Inc., and G T International, Inc. All subsidiaries of the Company, other than TTI Strategic Acquisitions and Equity Group, Inc., currently have no
financial activity. All significant inter-company balances and transactions
have been eliminated.
B)
USE OF MANAGEMENT’S ESTIMATES
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could
differ from those estimates.
C)
CASH EQUIVALENTS
The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash
equivalents are maintained with major financial institutions in the U S. Deposits held with these banks at times exceed $250,000 of insurance
provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant
credit risk on cash and cash equivalents. At March 31, 2021 and December 31, 2020, no excess cash balances existed. There were no cash
equivalents at March 31, 2021 and December 31, 2020.
D)
INCOME TAXES
The
Company applies ASC 740 which requires the asset and liability method of accounting for income taxes. The asset and liability method
require that the current or deferred tax consequences of all events recognized in the financial statements are measured by applying the
provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets
are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely
than not that all or some portion of the deferred tax assets will not be recovered.
ASC 740 requires recognition and measurement of uncertain tax positions using a “more-likely-than-not”
approach, requiring the recognition and measurement of uncertain tax positions. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for
deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some
portion or all the deferred tax assets will to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment.
E)
REVENUE RECOGNITION
The
Company currently had no revenues during the quarters ended March 31, 2021 and 2020, however revenues have commenced in the second
quarter 2021, and the Company recognizes revenues in accordance with ASC 606, “Revenue from Contracts with Customers.”
Revenue is recognized when control of our products or services are transferred to our customers in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those products. The Company currently has minimal consulting sales with performance
obligations of hours expended on various projects with our customers pursuant to underlying contracts. If we subsequently determine
that collection from any customer is not reasonably assured, we record an allowance for doubtful accounts and bad debt expense for all
that customer’s unpaid invoices and cease recognizing revenue for continued services provided until cash is received.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
F)
STOCK-BASED COMPENSATION
The
Company accounts for stock-based compensation in accordance with the provisions of ASC 718. ASC 718 requires all share-based payments
to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant-date fair value
of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the
reward- known as the requisite service period. No compensation cost is recognized for equity instruments for which employees do not render
the requisite service. The grant-date fair value of employee share options and similar instruments are estimated using the Black Scholes
option-pricing model adjusted for the unique characteristics of those instruments.
Equity
instruments issued to non-employees are recorded at their fair values as determined in accordance with ASC 718 as amended by ASU 2018-07.
As such, the grant date is the measurement date of an award’s fair value.
G)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The
Company follows ASC 820, “Fair Value Measurements.”
ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure
requirements for fair value measures. The three levels are defined as follows:
|
|
|
Level
1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
|
|
|
|
|
|
Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
|
|
|
|
|
|
Level
3 inputs to the valuation methodology are unobservable and significant to the fair measurement.
|
The
carrying amounts reported in the balance sheets for cash and cash equivalents, and current liabilities each qualify as financial instruments
and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their
expected realization and their current market rate of interest. The carrying value of notes payable approximates fair value because negotiated
terms and conditions are consistent with current market rates as of March 31, 2021 and December 31, 2020.
Marketable
securities are reported at the quoted and listed market rates of the securities held at the period end.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
The
following table presents the Company’s Marketable securities within the fair value hierarchy utilized to measure fair value on
a recurring basis as of March 31, 2021 and December 31, 2020:
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Marketable Securities –
March 31, 2021
|
|
$
|
99,000
|
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
|
Marketable Securities – December
31, 2020
|
|
$
|
31,000
|
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
H)
BASIC AND DILUTED LOSS PER SHARE
The
Company calculates earnings per share in accordance with ASC 260, “Earnings Per Share.” Basic loss per share is computed
by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings
(loss) per share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during
the period; only in periods in which such effect is dilutive. For March 31, 2021, there were 4,500,664 stock options outstanding, however
their effects were anti-dilutive. For March 31, 2020, there were no potentially dilutive securities to consider in the fully diluted
earnings per share calculation.
|
|
|
For the Three
Months Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Loss (numerator)
|
|
$
|
(675,742
|
)
|
|
$
|
(284,846
|
)
|
|
Shares (denominator)
|
|
|
234,531,338
|
|
|
|
205,277,990
|
|
|
Basic and diluted
loss per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
I)
RECENT ACCOUNTING PRONOUNCEMENTS
The
Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on
the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements
that have been issued that might have a material impact on its financial position or results of operations.
J)
Marketable Securities
The
Company purchases marketable securities and engages in trading activities for its own account. Securities that are held principally for
resale in the near term are recorded at fair value with changes in fair value included in earnings. Interest and dividends are included
in net Interest Income.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
NOTE
3 - MARKETABLE SECURITIES
The
Company has acquired various shares of Marketable Securities over the past several years and engages in trading activities for its own
account. The Company’s marketable securities are listed on various exchanges with readily determinable fair value per the guidance
of ASC 321, “Investments – Equity Securities.” The fair value of these shares at March 31, 2021 and December 31, 2020
amounted to $99,000 and $31,000, respectively. All realized and unrealized gains and losses are recorded in earnings. For the three months
ended March 31, 2021, the Company recorded a net gain of $68,000 which consisted of an unrealized gain of $68,000. For the three months
ended March 31, 2020, the Company recorded a net loss of $26,976 which consisted of unrealized
losses. The Company does not hold any equity securities that do not have readily available fair values, therefore no impairment
analysis or other methods to determine value are used.
NOTE
4 - FIXED ASSETS
During
the year ended 2020, the Company wrote off all fixed assets purchased prior to 2019, that were fully depreciated. Depreciation expense
for the three months ended March 31, 2021 and 2020 was $268 and $0, respectively.
Fixed
assets consist of the following:
|
|
|
March
31, 2021
|
|
|
December 31, 2020
|
|
|
Computer equipment
|
|
$
|
3,213
|
|
|
$
|
3,213
|
|
|
Total fixed assets
|
|
|
3,213
|
|
|
|
3,213
|
|
|
Accumulated Depreciation
|
|
|
(535
|
)
|
|
|
(267
|
)
|
|
Net
fixed assets
|
|
$
|
2,678
|
|
|
$
|
2,946
|
|
NOTE
5 – LICENSE
On
February 28, 2021, pursuant to a Stock Purchase Agreement (the “SPA”) between the Company and Gold Transactions
International, Inc. (GTI), the Company assumed a License Agreement held by GTI. The Company has not accounted for the acquisition
of the license due to a performance obligation that has not yet been met, but is disclosing the terms of the License due to the legal
acquisition of the license. The license provides access to a joint venture of companies (the “Network”), that buys gold
from artisan miners internationally, and provides transportation, assaying, refining and storage facilities in the DMCC, a free trade
zone for commodities trading in Dubai, and then sells the refined gold to its customers. The License Agreement grants the Company the
following:
|
|
●
|
Access
to the Network’s gold operations, to participate in the profits generated by the margin between the buy and sell prices, based
on the % of funds advanced into the Network,
|
|
|
●
|
an
exclusive license to market and promote the gold buy/sell program in an attempt to increase the buying power of the Network. The
term of the License is un-defined and perpetual.
|
|
|
|
|
|
|
●
|
Reporting
from the Network partners of gold transactions shared in, and the revenue generated on a monthly basis. Payments, however are
quarterly to the Network partners.
|
Pursuant to the SPA, 100%
of the GTI shares are to be exchanged for $6,000,000 worth of Company’s shares (6,000,000 shares). However
due to performance obligations included in the SPA not having been met by March 31, 2021 or subsequently through the date these financial
statements were issued, the Company has transferred the Company’s shares to an escrow account and recorded the shares as issued
but not outstanding.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
NOTE
6 - RELATED PARTY TRANSACTIONS
Due
to Related Parties
Due
to officers consists of cash advances and expenses paid by Mr. Reichman in order to satisfy the expense needs of the Company. The payables
and cash advances are unsecured, due on demand and do not bear interest. During the three months ended March 31, 2021 and 2020,
Mr. Reichman advanced $51,615 and $28,901, respectively, and was repaid $0 and $, respectively. At March 31, 2021 and December
31, 2020, the amounts owed to Mr. Reichman are $161,128 and $109,513, respectively.
Accrued
Wages
The
Company does not have sufficient operations and funds to pay its officers their wages in cash, therefore all wages have been accrued
for the three months ended March 31, 2021 and 2020. The accrued wages for the three months ended March 31, 2021 and 2020 are $170,000
and $170,000, respectively. The balance of accrued wages due to the officers at March 31, 2021 and December 31, 2020, are $170,000 and
$0, respectively.
NOTE
7 - NOTES PAYABLE
(a)
NOTES PAYABLE IN DEFAULT:
Notes
payable in default consist of various notes bearing interest at rates from 5% to 9%, which are unsecured with original due dates between
August 2000 and December 2016. All the notes are unpaid to date and are in default and are thus classified as current liabilities. At
March 31, 2021 and December 31, 2020, notes payable in default amounted to $871,082 and $871,082, respectively. Accrued interest on the
notes in default at March 31, 2021 and December 31, 2020 are $354,877 and $345,663, respectively. Below is a discussion of the details
to the notes payable in default and a table summarizing the notes in default with additional information.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
During
2002, the Company settled a trade payable in litigation by executing a note payable to a company in the amount of $18,000, interest
accrues at 6% per annum, unsecured, due September 1, 2002, and in default . Accrued interest at March 31, 2021 and December 31, 2020
is $21,150 and $20,880, respectively.
Also
during 2002, in settlement of another trade payable, the Company executed a note payable to a Company in the amount of $30,000, interest
accrues at 6% per annum, unsecured, due September 12, 2002, in default. Accrued interest at March 31, 2021 and December 31, 2020 is $32,749
and $32,299, respectively.
During
2000, the Company executed a note payable to an individual in the amount of $25,000, interest accrues at 5% per annum, unsecured, due
August 31, 2000, in default. Accrued interest at March 31, 2021 and December 31, 2020 is $27,404 and $27,091, respectively.
In
2002, the Company settled an obligation with a consultant by executing a note payable for $40,000, interest accrues at 7% per annum,
unsecured, due July 10, 2002, in default. Accrued interest at March 31, 2021 and December 31, 2020 is $52,987 and $52,287, respectively.
On
December 27, 2009, the Company executed a note payable to an individual for various advances to the Company in the amount of $292,860.
On June 26, 2013, this note was renegotiated to include the accrued interest. The new note balance is $388,376 and interest accrues at
5% per annum, unsecured, and is extended to October 5, 2019, with monthly installments beginning in 2014 of $5,553, which did not occur.
This note is in default. Accrued interest at March 31, 2021 and December 31, 2020 is $150,764 and $145,909, respectively.
In
January 27, 2010, the Company executed a note payable to a corporation in the amount of $192,000, bears no interest and is due on demand
after 6 months of execution and is unsecured. No demand has been made at the date of these financial statements, but the note is in default.
Interest expense in the amount of $13,440 has been imputed for this note in 2020 and 2019, with an offsetting entry to additional
paid in capital.
On
August 28, 2012, and September 17, 2012, the Company executed a note payable to a corporation in the amount of $12,000 and $20,000, respectively.
On June 26, 2013, this note was renegotiated to include the accrued interest. The new note balance is $32,960 and interest accrues at
5% per annum, unsecured, and is extended to October 5, 2018, with monthly installments beginning in 2014 of $473, which did not occur,
and is unsecured and in default. Accrued interest at March 31, 2021 and December 31, 2020 is $12,795 and $12,383, respectively.
On
April 12, 2012, the Company executed a note payable to a corporation in the amount of $100,000, however on June 26, 2013, this note was
renegotiated to bear interest at 5% per annum, unsecured, extended to October 5, 2018, with monthly installments beginning in 2014 of
$1,430, which did not occur and this note is in default. Accrued interest at March 31, 2021 and December 31, 2020 is $38,818 and $37,568,
respectively.
On
December 31, 2012, the Company executed a note payable to a corporation in the amount of $32,000, however on June 26, 2013, this note
was renegotiated to include accrued interest. The new note balance is $32,746, bears interest at 5% per annum, unsecured, extended to
October 5, 2018, with monthly installments beginning in 2014 of $468, which did not occur and this note is in default. Accrued interest
at March 31, 2021 and December 31, 2020 is $12,709 and $12,300, respectively.
On
March 11, 2014, the Company executed a note agreement with an LLC in the amount of $5,000, interest accrues at 6% per annum, unsecured,
due after 8 months of execution, extended to October 5, 2018 and is in default. Accrued interest at March 31, 2021 and December 31, 2020
is $2,117 and $2,042, respectively.
On
January 31, 2014, the Company executed a note agreement with a Corporation in the amount of $7,000, interest accrues at 6% per annum,
unsecured, due after 8 months of execution, but extended to October 5, 2018 and is in default. Accrued interest at March 31, 2021 and
December 31, 2020 is $3,009 and $2,904, respectively.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
None
of the above notes are convertible or have any covenants.
(b)
Additional detail to all Notes Payable in Default is as follows:
|
March 31,
2021
|
|
|
December 31, 2020
|
|
|
Interest
|
|
|
Interest
Expense
|
|
|
|
|
|
Principal
|
|
|
Principal
|
|
|
Rate
|
|
|
3/31/2021
|
|
|
3/31/2020
|
|
|
Maturity
|
|
|
$
|
32,960
|
|
|
|
32,960
|
|
|
|
5.00
|
%
|
|
|
412
|
|
|
|
412
|
|
|
|
10/5/18
|
|
|
|
32,746
|
|
|
|
32,746
|
|
|
|
5.00
|
%
|
|
|
409
|
|
|
|
409
|
|
|
|
10/5/18
|
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
6.00
|
%
|
|
|
75
|
|
|
|
75
|
|
|
|
10/5/18
|
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
5.00
|
%
|
|
|
1,250
|
|
|
|
1,250
|
|
|
|
10/5/18
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
6.00
|
%
|
|
|
105
|
|
|
|
105
|
|
|
|
10/5/18
|
|
|
|
388,376
|
|
|
|
388,376
|
|
|
|
5.00
|
%
|
|
|
4,855
|
|
|
|
4,855
|
|
|
|
10/5/18
|
|
|
|
192,000
|
|
|
|
192,000
|
|
|
|
0
|
%
|
|
|
3,360
|
|
|
|
3,360
|
|
|
|
10/5/18
|
|
|
|
18,000
|
|
|
|
18,000
|
|
|
|
6.00
|
%
|
|
|
270
|
|
|
|
270
|
|
|
|
9/1/2002
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
6.00
|
%
|
|
|
450
|
|
|
|
450
|
|
|
|
9/12/2002
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
5.00
|
%
|
|
|
313
|
|
|
|
313
|
|
|
|
8/31/2000
|
|
|
|
40,000
|
|
|
|
40,000
|
|
|
|
7.00
|
%
|
|
|
700
|
|
|
|
700
|
|
|
|
7/10/2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
871,082
|
|
|
$
|
871,082
|
|
|
|
|
|
|
$
|
12,199
|
|
|
$
|
12,199
|
|
|
|
|
|
At
March 31, 2021 and December 31, 2020, accrued interest on the outstanding notes payable were $354,877 and $319,307, respectively and
related party notes was $0 and $343,056, respectively. Interest expense on the outstanding notes amounted to $12,574 and $56,502 for
the three months ended March 31, 2021 and 2020, including the imputed interest discussed above.
(c)
CONVERTIBLE DEBENTURE:
On
November 27, 2020, the Company executed a convertible debenture with a corporation in the amount of $74,800, 10% interest per
annum, unsecured, due on November 27, 2021. The debenture included a conversion right to be exercised at any time 180 days after
execution of the note and was convertible into common stock of the Company at 75% of the market price, being calculated as the
lowest three trading prices during the fifteen trading day period prior to conversion. The Debenture also required the Company to reserve
5 times the expected conversion share amount at the transfer agent, to ensure there were sufficient shares available upon
conversion.
The
convertible debenture also contained an OID or original issue discount of $6,800, which was deducted from the proceeds, thus resulting
in $68,000 net proceeds to the Company. Because the Company prepaid the debenture in February 2021, it incurred a 20% pre-payment
penalty, and expensed the OID in full during 2020.
Accrued
interest and penalties at March 31, 2021 and December 31, 2020 were $0 and $12,045, respectively. At March 31, 2021 and December
31, 2020, the Convertible Debenture balance was $0 and $74,800, respectively.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
(d)
NOTES PAYABLE
On
February 26, 2021, the Company executed a note agreement with an Individual in the amount of $100,000, 1% interest per annum,
unsecured, due December 31, 2021. Accrued interest at March 31, 2021 and December 31, 2020 was $250 and $0, respectively.
On
March 26, 2021, the Company executed a note agreement with an Individual in the amount of $50,000, 1% interest per annum, unsecured,
due December 31, 2021. Accrued interest at March 31, 2021 and December 31, 2020 was $125 and $0, respectively.
NOTE
8 - STOCKHOLDERS’ EQUITY (DEFICIT)
ISSUANCES
OF COMMON STOCK
During
the three months ended March 31, 2021 and 2020, the Company issued 4,500,000 shares of common stock with a fair market
value of $471,000 and 0 shares, respectively, for services rendered. The services performed during the quarter were, legal, IR services,
IT and consulting. All services performed were to outside, unrelated third parties.
On
February 28, 2021, the Company executed a Stock Purchase Agreement wherein the Company acquired all the issued and outstanding stock
of Gold Transactions International, Inc. (GTI) (a Utah Corporation), for the issuance of 6,000,000 shares of common stock valued at
$6,000,000 on the grant date of February 24, 2021. Pursuant to the SPA, a performance obligation exists wherein GTI
must achieve a certain profit margin once revenues commence to receive the shares issued. Therefore, the shares have been placed in
escrow until the performance obligation is met and the acquisition has not been included in these financial statements. The
acquisition of GTI will be accounted for as an asset purchased due to the fact that GTI had been newly formed, had only one asset or
asset group and had no operations at the time of the acquisition. Revenue generation for GTI commenced in Q2 of 2021, and the
performance obligation is expected to satisfied at the end of Q2. GTI is in the business of participating, through a License
Agreement, with a private joint venture network of companies, in transporting, assaying, buying, storing and selling gold from
international artisan gold miners. After the mined dore gold has been shipped to a network third party refinery in the DMCC, a free
trade zone in Dubai, the artisan miner’s gold is purchased and refined and sold to the network’s customers. GTI makes
revenue on the margin spread of the buy and sell prices.
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
ISSUANCES
OF PREFERRED STOCK
Pursuant
to the Articles of Incorporation of the Company, there was initially authorized 50,000 shares of Series A Preferred Stock. On April 7,
2016, the Company’s Board of Directors created and issued out of the Series A Preferred Stock, 1,000 Series A Preferred shares
with the following features:
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a)
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Super
voting power, wherein the 1,000 shares have the right to vote in the amount equal to fifty-one percent (51%) of the total vote with
respect to any proposal relating to (i) increasing the authorized share capital of the Company, and (ii) effecting any forward stock
split of the Company’s authorized, issued or outstanding shares of capital stock, and (iii) any other matter subject to a shareholder
vote.
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b)
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No
entitlement to dividends.
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c)
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No
liquidation preferences.
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d)
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No
conversion rights.
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e)
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Automatic
Redemption Rights upon certain triggers, to be redeemed at par value.
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STOCK
OPTIONS
On
December 19, 2020, in conjunction with the conversion of related party notes, accrued interest and compensation, the Company authorized
the issuance of 4,500,664 stock options with the following features:
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●
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One
option allows for the purchase of one share of common stock
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The
strike price of the option is $.01
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The
conversion term is 2 years from issuance date
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All
options are vested immediately
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The
value of the options were determined using the Black-Scholes valuation method, and the Company uses the following methods to determine
its underlying assumptions: expected volatilities are based on the historical monthly closing price of the Company’s common stock;
the expected term is 2 year, the risk free interest rate used is based on the U.S Treasury implied yield zero-coupon issue with similar
life terms to the expected life of the grant; and the expected divided yield is based on the current annual dividend. No compensation
was recorded with the 4,500,664 option issuance as the $447,813 valuation of the options granted did not exceed the recorded amount of
debt it was converting.
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Assumptions:
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2021
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2020
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Assumptions applicable to stock options issued
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Risk-free interest rate
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-
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%
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3
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%
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Expected lives (in years)
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-
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2
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Expected stock volatility
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-
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%
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72
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%
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Dividend yield
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-
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-
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Stock
option transactions are as follows:
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Weighted
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Weighted
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Average
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Average
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Aggregate
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Exercise
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Remaining
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Intrinsic
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Shares
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Price
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Term
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Value
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Outstanding at January 1, 2020
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-
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$
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-
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-
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$
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-
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Granted
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4,500,664
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.01
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2
yrs
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427,563
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Exercised
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-
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-
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-
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-
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Forfeited
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-
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-
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-
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-
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Outstanding at December 31,2020
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4,500,664
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$
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.01
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2
yrs
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$
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427,563
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Granted
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-
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-
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-
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-
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Exercised
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-
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-
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-
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-
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Forfeited
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-
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-
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-
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-
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Outstanding at March 31, 2021
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4,500,664
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$
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.01
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1.75
yrs
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$
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427,563
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OTHER
During
the three months ended March 31, 2021 and 2020, the Company recorded imputed interest on a non-interest-bearing note in the amount of
$3,360 and $3,360, respectively, as an increase in additional paid in capital (see Note 7).
GLOBAL
TECH INDUSTRIES GROUP, INC.
Notes
to the Unaudited Condensed Consolidated Financial Statements
March
31, 2021
NOTE
9 - LEGAL ACTIONS
On
February 3, 2017, the Company filed suit in Eastern District Federal Court New York against American Resource Technologies, Inc., (ARUR)
and several directors and officers relating to the Chautauqua County Court Kansas decision nullifying the acquisition Agreement of ARUR.
The Company has made several attempts to recover the shares of GTII stock paid to ARUR for the asset acquisition and the various costs
and expenses expended by GTII in fulfillment of its obligations under the contract with ARUR. The failure of non-litigation attempts
to resolve the matter resulted in filing an action for declaratory judgment in the US District Court for the Eastern District of New
York, Docket No. 17-CV-0698. The case was subsequently withdrawn due to the close of ARUR operations. During 2020, the Company was successful
in recalling the 4,668,530 shares and cancelling them from the shareholder list.
On
December 30, 2016, the Company executed a stock purchase agreement (the “Agreement”), which was signed and closed in Hong
Kong, with GoFun Group, Ltd. through its wholly owned subsidiary Go F & B Holdings, Ltd. GoFun Group, Ltd. is a privately held company
running a casual dining restaurant business, based in Hong Kong. Subsequent to the agreement being signed, GoFun Group failed to substantially
perform under the agreement, including, but not limited to providing audited financials of its assets, making the ongoing payments called
for in the agreement, along with other matters that led Global Tech to initiate litigation in the United States. Currently, Global Tech
and GoFun are litigating the matter in the U.S District Court for the southern district of New York. The original acquisition agreement
and rescission was recorded on the Company’s books in 2016, however the physical share certificates were not returned to the Company.
During the last quarter 2019, the Company was able to secure, via preliminary settlement, the return of 43,649,491 shares of the Company’s
stock, that was issued in good faith to GoFun in anticipation of a final stock exchange. The stock has since been returned to the Company’s
treasury and cancelled. The Company also reclassified a deposit received from GoFun shareholders in the amount of $128,634 for future
share issuances pursuant to the Acquisition Agreement, to a Gain on Settlements and Debt Relief as part of the legal settlement of this
case. As of this writing, motions are pending that may require remaining negotiations to continue in arbitration.
On
December 30, 2019, a dispute between the Company and its counsel regarding the GoFun matter, above, resulted in a filing, and subsequent
settlement, of an action in the Supreme Court of the State of New York for the County of New York (Index No. 656396/2019). Pursuant to
the settlement, prior counsel for the Company accepted previously-issued shares in 2016, as full payment for all legal work, expenses,
costs, and other fees.
NOTE
10 – SUBSEQUENT EVENTS
The
Company has evaluated events subsequent to the balance sheet through the date the financial statements were issued and noted the following
events requiring disclosure:
Effective
April 1, 2021, the Company, signed a binding agreement (the “Agreement”) with Bronx Family Eye Care, Inc. (BFE), engaged
in the business of full scope optometry at its four primary locations, three of which are in the Bronx, one of which is in Manhattan,
New York, as well as at a fabrication facility in the Bronx. The two companies agreed to engage in a business combination such that BFE
will become a wholly owned subsidiary of GTII, and the shareholders of BFE will acquire two million six hundred fifty thousand (2,650,000)
shares of the Company’s common stock, subject to the terms and conditions set forth in the Agreement. The Agreement also includes a requirement to have a 2-year audit from a licensed CPA firm as a condition to the finalization of the Agreement, therefore,
no operating activities, assets or liabilities will be consolidated with the Company until this final condition is met.
There
were no acquisition related costs incurred in acquiring BFE. The initial accounting of the BFE acquisition is incomplete as of the date
of the Company’s 10-Q filing. Therefore, disclosures related to the issuers recording of the acquisition, and related balance sheet
and income statement disclosures cannot be made at this time. Effective April 1, 2021, the operations of BFE will be consolidated with
the Company, upon the conditions described above being met. BFE is a currently operating company with revenues in excess of $1,000,000
annually.
On March 22, 2021, the Company
declared a warrant dividend to the shareholders of record on April 1, 2021, to be administered via it’s transfer agent Liberty
Stock Transfer. On April 8, 2021, the Company issued the warrants to its shareholder at a rate of 1 warrant for each 10 shares
owned as of April 1, 2021. The warrant entitles the holder to purchase one restricted share of GTII common stock for a price of $2.75
(the strike price). The warrant has a 2-year term and expires on April 8, 2023.