NOTE
1 – NATURE OF OPERATIONS (RESTATED)
The
Company was incorporated in 1980 under the laws of the State of Nevada under the name of Western Exploration, Inc. Western Exploration,
Inc., a Nevada corporation, was formed on July 24, 1980. In 1990, Western Exploration, Inc. changed its name to Nugget Exploration, Inc.
On November 10, 1999, a wholly-owned subsidiary of Nugget Exploration, Inc., Nugget Holdings Corporation merged with and into GoHealthMD,
Inc., a Delaware corporation. Shortly thereafter, Nugget Exploration, Inc. changed its name to GoHealthMD, Inc. a Nevada corporation.
On
August 18, 2004, GoHealthMD, Inc., the Nevada Corporation, changed its name to Tree Top Industries, Inc. On July 7, 2016, Tree Top Industries,
Inc. changed its name to Global Tech Industries Group, Inc. GoHealthMD, Inc. continues to exist as a Delaware corporation and wholly-owned
subsidiary of Global Tech Industries Group, Inc. NetThruster, Inc. MLN, Inc., BioEnergy Applied Technologies, Inc. (“BAT”),
Eye Care Centers International, Inc., GoHealthMD Nano Pharmaceuticals, Inc., TTI Strategic Acquisitions and Equity Group, Inc. and TTII
Oil & Gas, Inc, all were formed by Global Tech in the anticipation of technologies, products or services being acquired. G T International,
Inc. is a wholly owned subsidiary of Global Tech Industries Group, Inc., existing as a Wyoming corporation. Not all subsidiaries are
currently active.
On
December 31, 2012, Global Tech and its new subsidiary, TTII Oil & Gas, Inc., a Delaware corporation, signed a binding asset purchase
agreement with American Resource Technologies, Inc. (“ARUR”), a Kansas corporation, to acquire all the assets of ARUR for
a purchase price of $513,538, which was paid in the form of 4,668,530 shares of Global Tech’s common stock as described in the
asset purchase agreement. The shares were valued at $0.11 per share, based on the closing trading price of the common stock on the Closing
Date. The assets purchased from ARUR include a 75% working interest in oil and gas leases in Kansas, as well as other oil field assets,
a natural gas pipeline, currently shut down that is also located in Kansas, 25% interest in three other business entities operating in
Kansas, and accounts receivables from two companies operating in Brazil in the amounts of $3,600,000 and $3,600,000 respectively. TTII
Oil & Gas, Inc. also purchased three promissory notes in the amounts of $100,000, $100,000 and $350,000, as well an overdue contract
for revenue in the amount of $1,000,000. Finally, a gun sight patent was also acquired from Century Technologies, Inc. All accounts and
notes receivable were deemed uncollectable due to the age and circumstances, and therefore were assessed no value in the asset purchase.
The equity ownerships were also deemed to be impaired due to the inactive nature of the entities and were not allocated any value. The
gun sight patent was also not readily assessable as to value and no purchase price was allocated to this asset. Also, due to the mechanic’s
lien and lawsuit on the oil leases, as well as the absence of an official reserve report, the oil lease was also impaired, and no value
was recorded for this asset. In September 2015, the Chautauqua County Court decided that American Resource Technologies Inc. management
and Board of Directors improperly acted and rendered the original Agreement a nullity. During 2019, the Company removed additional obligations
related to the ARUR acquisition and settled legal fees due. During the 2nd quarter 2020, the Company was successful in recalling
the 4,668,530 shares and cancelling them from the shareholders list.
On
December 30, 2016, Global Tech Industries Group, Inc., a Nevada corporation, 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. After 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, Docket No.17-CV-03727. On October 2, 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. 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, counsel for the Company accepted previously issued shares as full payment for all legal work, expenses, costs,
and other fees.
On
February 28, 2021, the Company signed a binding stock purchase agreement with Gold Transactions International, Inc. (“GTI”)
a privately held Utah corporation. GTI acquired a license from a private Nevada Corporation which operated, via a joint venture, in the
business of buying and selling gold on a global basis through a private network of companies. The license agreement gave GTI access to
the private network, and an exclusive right to market and promote the gold buy/sell program to expand the buying power of the network.
GTI, with its network affiliates, purchases gold from artisan miners throughout the world and transports, assays, refines and
sells the gold in the Dubai Multi Commodities Centre, (“DMCC”), a free trade zone in Dubai. The Company plans to raise capital
for GTI and advance those funds into the gold network. Although 6,000,000
shares have been issued for this agreement, they
are being held in escrow awaiting final performance criteria to be met and are therefore issued but not outstanding. All extension agreements
for this acquisition have expired, but neither party has initiated a termination of the agreement.
During
the first quarter of 2021, the Company entered into binding agreements with a company in the field of eye care, retail eye wear and full
scope optometry. The Bronx Family Eye Care, Inc. is a company that provides retail eyewear and medically oriented full scope optometry
at four brick and mortar locations. Bronx Family’s licensed optometrists use cutting-edge equipment to provide diagnosis and treatment
for diseases of the eye, as well as corrective eyewear. Bronx Family also performs edging of lenses for its customers at their in-house
facility, as well as providing services to outside practices. Effective December 27, 2021, Bronx Family Eye Care completed the closing
requirements, the agreement was closed and Bronx became a reporting subsidiary of the Company. Bronx Family Eye Care, Inc. (“Bronx”)
was incorporated in the State of New York on June 30, 2016.
The
acquisition of Bronx was valued at $4,346,000,
which was the value of the shares on the date of closing. The purchase price was allocated to the assets and liabilities acquired based on
the cost recorded on Bronx records (book value). Goodwill was recorded for the difference between the purchase price and the net
assets acquired.
The
following assets and liabilities were acquired from Bronx on December 27, 2021:
SCHEDULE OF BUSINESS ACQUISITIONS ASSETS AND LIABILITIES
| A | |
| 2021 | |
| Assets | |
| | |
| Cash | |
$ | 238,972 | |
| Accounts receivable | |
| 54,601 | |
| Inventory | |
| 295,743 | |
| Property and equipment | |
| 110,990 | |
| Property and equipment (net) | |
| 110,990 | |
| Other assets | |
| 67,808 | |
| Total Assets | |
$ | 768,114 | |
| | |
| | |
| Liabilities | |
| | |
| Accounts payable | |
$ | 90,376 | |
| Accrued expenses | |
| 1,797 | |
| Loans payable | |
| 150,000 | |
| Total Liabilities | |
| 242,173 | |
| | |
| | |
| Goodwill recorded on the acquisition | |
$ | 3,820,059 | |
March
17, 2021, the Company’s Board of Directors approved the declaration by management of a Warrant to holders of its common stock to
purchase additional shares of stock. On March 22, 2021, Global Tech Industries Group, Inc., (“GTII”) a Nevada corporation,
entered into a warrant agreement with Liberty Stock Transfer Agent (“Liberty”), whereby Liberty agreed to act as GTII’s
warrant agent in its offering of warrants to GTII’s shareholders (each, a “Warrant”). All shareholder of record on
April 1, 2021, were issued 0.10 of a Warrant per share of Common Stock held of record by such holder. However, no fractional Warrants
were issued. The Warrants were issued on or about April 8, 2021. Each full Warrant shall be exercisable into one share of GTII’s
common stock at an exercise price of $2.75. The Warrants shall expire on April 8, 2023. Manhattan Transfer Registrar Co. shall act as
co-agent with Liberty. The Warrants do not have a cashless exercise provision.
During
the second quarter of 2021, the Company signed an agreement with Alt5 Sigma to host a trading platform. The Company then launched Beyond
Blockchain (a GTII company) on June 18, 2021, an online cryptocurrency trading platform that provides access to Digital Currency and
is changing the way customers transact with Digital Assets. Beyond Blockchain is a registered Money Services Business under FINTRAC guidelines
and incorporates world class AML and KYC technology. It uses two-factor authentication to secure customers’ assets as well as AI
liveness testing to secure the user experience. Beyond Blockchain allows multi-currency clearing and direct settlements in Bitcoin (BTC),
Ethereum (ETH), Tether (USDT), Bitcoin Cash (BCH), Litecoin (LTC), Bitcoin SV (BSV), Aave (AAVE), Compound (COMP), Uniswap (UNI), Chainlink
(LINK) and Yearn Finance (YFI).
Beginning
in April of 2021, the Company has been working towards tokenizing its fine art collection. If this prospectus is approved, the Company
would mint 1,000,000,000 tokens of the GFT Token, with 26,000,000 of them being registered herein for distribution. Once minted, each
shareholder, as of the to be determined record date, would be entitled to receive one GFT Token for every 10 shares of GTII Common Stock
beneficially held in their name.
On
November 9, 2021, GTII, and Trento Resources and Energy Corp, (“Trento”) a corporation organized under the laws of the State
of Delaware, signed a binding stock purchase agreement (“SPA”) to engage in a merger/business combination, for the best interests
of the shareholders of both GTII and Trento, pursuant to which Trento will become a wholly-owned subsidiary of GTII. Pursuant to the
SPA, GTII issued 100,000 shares of common stock to Sean Wintraub, with 100,000,000 shares to be issued upon Trento’s successful
raising, within six (6) months of funds sufficient to support large-scale mining operations at the Trento Mining Project (the “Trento
Project”), located in the third region of Atacama, Chile, Copiapo. In addition, and within six (6) months subsequent to the raising
of said funds, if GTII receives independent confirmation of the presence of the geological resources in those amounts contained in the
Geological Estimation, the Company will issue Trento that amount of common stock representing industry standard multipliers for the value
of that number of geological resources found listed in the Geological Estimation. On December 9, 2021, GTII retained Bertrand-Galindo
Barrueto Barroilhet & Cia, (“Bertrand-Galindo”) a firm headquartered in Santiago, Chile to conduct a due diligence review
of the Trento’s interests in Inversiones Trento SpA and the related mining concessions, operations, land easements, permits and
assets related to the Trento project. Bertrand-Galindo will also provide relevant corporate, legal, regulatory and tax structure guidance
as needed.
On
December 18, 2021 the Company entered into a membership interest purchase agreement with AT Gekko PR LLC, a Puerto Rico limited liability
company (“AT Gekko”), which owned 100% of the issued and outstanding membership interests of Classroom Salon Holdings, LLC,
a Delaware limited liability company (“Classroom Salon Holdings”). Also on December 18, 2021 AT Gekko executed an assignment
to the Company of its membership interests in Classroom Salon Holdings, which upon completion of the closing requirements would
make Classroom Salon Holdings a wholly-owned subsidiary of the Company. The transaction was also subject to certain post-closing
conditions as set forth in the membership interest purchase agreement. The conditions include PCAOB audited financial statements for
2020 and 2021, an amended license agreement with Carnegie Mellon University, and the consummation of the acquisition of Classroom Salon,
LLC. In December 2021, the Company issued 10,000,000
shares of common stock in anticipation of a closing
with Classroom Salon, however, at December 31, 2021, this transaction has not closed and the shares are held in escrow pending further
action on Classroom Salon, thus these shares are considered issued but not outstanding.
On
June 28, 2021, the Company increased its authorized shares of common stock to 550,000,000.
CORPORATE
HISTORY
The
Company was incorporated in 1980 under the laws of the State of Nevada under the name of Western Exploration, Inc. Western Exploration,
Inc., a Nevada corporation, was formed on July 24, 1980. On February 5, 1981, the Articles were amended, and the name of the corporation
was changed to Nugget Exploration, Inc. On October 15, 1998, the Articles were amended and the number of authorized shares of stock,
par value $0.01 was reduced from 50,000,000 to 5,000,000. The number of issued shares, originally 30,106,000, became approximately 97,117
after the 310-to-1 reverse stock split. On October 7, 1999, the Articles were amended and the number of common shares of authorized stock
was increased to 25,000,000, par value $0.01. On January 24, 2000, the Articles were amended, and the Company changed its name to GoHealthMD,
Inc. On August 30, 2004, the Articles were amended, and the Company’s name was changed to Tree Top Industries, Inc., the number
of common shares of authorized stock was increased to 75,000,000 with a par value of $0.001, and the number of directors was changed
from three to five. On November 20, 2007, the Articles were amended and the number of common shares of authorized stock was increased
to 350,000,000 with a par value of $0.001, and blank check preferred stock was authorized in the number of 50,000, with a par value of
$0.001. On December 28, 2011, the Articles were amended and the number of common shares of authorized stock was increased to 1,000,000,000,
with a par value of $0.001. On November 15, 2012, the Articles were amended and the number of common shares of authorized stock was reduced
to 10,000,000 shares with a par value of $0.001. The number of issued shares, originally 924,357,300, became approximately 9,243,573
after the 100-to-1 reverse stock split. On April 16, 2016, the Articles were amended through a Certificate of Change to change the number
of authorized common shares through a 10 to 1 forward split to 100,000,000 shares. The number of shares, originally 9,243,573 became
approximately 92,435,730 after the forward split. On July 6, 2016, through a Certificate of Change, 1,000 shares of the blank check preferred
stock were designated as Series A preferred shares of stock and given the requisite powers of Series A preferred stock. On July 6, 2016,
the Articles were amended to change the Company name from Tree Top Industries, Inc. to Global Tech Industries Group, Inc. The trading
symbol was changed from TTII to GTII. On July 6, 2016, the Articles were amended to increase the authorized shares of common stock from
100,000,000 to 350,000,000 with a par value of $0.001. On June 28, 2021, the Articles were amended to increase the authorized shares
of common stock from 350,000,000 to 550,000,000.
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company
incurred a net loss of $6,062,922
during the fiscal year ended December 31, 2021, and has an
accumulated deficit of $234,155,911
at December 31, 2021. The Company also had
negative working capital of $2,947,766
and $1,777,125
on December 31, 2021 and 2020, respectively,
and negative cash flow from operations of $655,623
and $173,399,
respectively, for the years then ended.
The
Company did not generate significant revenues during
the years ended December 31, 2021 and 2020, and its cash flows are not sufficient enough to support all expenses of the Company.
The Company as yet still requires substantial financing. Most of the financing has been provided by David Reichman, the Chief Executive
Officer and Chairman. The Company is dependent upon his ability and willingness to continue to provide the financing necessary to meet
reporting and filing requirements of a public company.
With
the acquisition of Bronx in December 2021, the Company will have operating revenues which will assist the Company in providing necessary
cashflow to assist in satisfying its obligations. However, in order for the Company to remain a going concern, it will need to generate
significant cashflow to sustain the needs of the Company, financially, and it may be required to continue to receive funds from equity
or debt financing to accomplish this need. There can be no assurance that the Company will continue to receive any proceeds from equity
offerings or that the Company will be able to obtain the necessary funds to finance its operations. These conditions raise substantial
doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
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.
NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES (RESTATED)
| A) | PRINCIPLES
OF CONSOLIDATION |
The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bronx Family Eye
Care, Inc., Ludicrous, Inc., TTI Strategic Acquisitions and Equity Group, Inc, TTII Oil & Gas, Inc., Global Tech Health, Inc.
and G T International, Inc. All subsidiaries of the Company, other than Bronx Family Eye Care, Inc. and 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 United States 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. These consolidated financial statements have material estimates for valuation of stock and
option transactions.
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. On December 31, 2021 and 2020, no excess existed. There were no cash equivalents on December
31, 2021, and 2020.
Inventories,
consist primarily of lenses and frames, are stated at the lower of cost or net realizable value, with cost determined using primarily
the first-in-first-out (FIFO) method. The Company purchased substantially all inventories from several key suppliers. As of December
31, 2021, the Company’s inventory balance was $290,710.
Property,
plant and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the
related assets, ranging from 3 to 7 years for furniture, fixtures, machinery and equipment. Leasehold improvements are amortized over
the lesser of the term of the lease or the economic life of the asset. Routine repairs and maintenance are expensed when incurred.
The
Company follows ASC 740, “Income Taxes,”, which discusses 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.
The
Company incurred $24,120
in revenue from its subsidiary Bronx Family Eye
Care from December 27, 2021 through December 31, 2021, the period that Bronx’s activity was consolidated with the Company.
During 2020, the Company incurred $8,500
in service revenues. The Company recognizes revenues
in accordance with ASC 606 Revenue from Contracts with Customers. Revenue is recognized as services are rendered or when control of our
products is transferred to our customers in an amount that reflects the consideration the Company expects to be entitled to in exchange
for those services or products. The Company considers revenue earned when all the following criteria are met: (i) the contract with the
customer has been identified, (ii) the performance obligations have been identified, (iii) the transaction price has been determined,
(iv) the transaction price has been allocated to the performance obligations, and (v) the performance obligations have been satisfied.
Bronx’s performance obligation is completed once the eye exam or other services are complete. The revenue for the eyewear is
recorded once the eyewear has been delivered to the patient. All services and products sold are recorded as revenue at the pre-determined
and agreed upon price, and once the services are performed and the products have been delivered. Service fees and the delivery of eyewear
products may happen at different times and stages of our contracts with our customers. Revenues are recorded at the completion of each
stage of Bronx’s deliverables.
Accounts
Receivable – In the normal course of business, the Company extends credit to its patients on a short-term basis.
Although the credit risk associated with these patients is minimal, the Company routinely reviews its accounts receivable balances
and makes provisions for doubtful accounts. The Company ages its receivables by date of invoice. Management reviews bad debt
annually. When an account is deemed uncollectible, the Company charges off the receivable against the bad debt reserve. A
considerable amount of judgment is required in assessing the realization of these receivables including the current creditworthiness
of each patient and related aging of the past-due balances, including any billing disputes.
The
allowance for doubtful accounts is based on the best information available to the Company and is re-evaluated and adjusted as additional
information is received. The Company evaluates the allowance based on historical write-off experience, the size of the individual patient
balances and past-due amounts. As of December 31, 2021 and 2020, the Company had an allowance for bad debt of $0 and $0, respectively.
During the years ended December 31, 2021 and 2020, the Company had bad debt expense of $0 and $0, respectively.
| I) | STOCK-BASED
COMPENSATION |
The
Company accounts for stock-based compensation in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.”
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.
| J) | INTANGIBLE
ASSETS AND BUSINESS COMBINATIONS (RESTATED) |
The
Company follows ASC 805, “Business Combinations,” and ASC 350, “Intangibles – Goodwill and Other”.
ASC 805 requires the use of the purchase method of accounting for any business combinations, and further clarifies the criteria to recognize
intangible assets separately from goodwill. Under ASC 350, goodwill and indefinite−life intangible assets are reviewed for impairment
annually.
The Company recorded Goodwill in connection with
its acquisition of Bronx Family Eyecare. The acquisition occurred through a Stock Purchase
Agreement, wherein, the Company issued 2,650,000 shares of common stock, valued at $3,820,059. Good will was calculated based on the
value of the share issuance, less the assets acquired plus the liabilities assumed as follows:
SCHEDULE OF BUSINESS COMBINATIONS INTANGIBLE ASSETS AND LIABILITIES
| A | |
| 2021 | |
| Assets | |
| | |
| Cash | |
$ | 238,972 | |
| Accounts receivable | |
| 54,601 | |
| Inventory | |
| 295,743 | |
| Property and equipment (net) | |
| 110,990 | |
| Other assets | |
| 67,808 | |
| Total Assets | |
$ | 768,114 | |
| | |
| | |
| Liabilities | |
| | |
| Accounts payable | |
$ | 90,376 | |
| Accrued expenses | |
| 1,797 | |
| Loans payable | |
| 150,000 | |
| Total Liabilities | |
| 242,173 | |
| | |
| | |
| Goodwill recorded on the acquisition | |
$ | 3,820,059 | |
Management
has evaluated the valuation of goodwill at December 31, 2021, and determined that there is no impairment to the valuation attributed
to the Bronx acquisition.
| |
I) |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
The
Company follows ASC 820, “Fair Value Measurements,” 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 assets and 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 December 31, 2021 and 2020.
Marketable
securities are reported at the quoted and listed market rates of the securities held at the year end.
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 December 31, 2021 and 2020:
SCHEDULE OF FAIR VALUE ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS
| | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| Marketable Securities – 2021 | |
$ | 163,000 | | |
$ | -0- | | |
$ | -0- | |
| Marketable Securities – 2020 | |
$ | 31,000 | | |
$ | -0- | | |
$ | -0- | |
| K) | BASIC
AND DILUTED EARNINGS (LOSS) PER SHARE |
The
Company calculates earnings (loss) per share in accordance with ASC 260, “Earnings Per Share.” Basic earnings (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 2021 and 2020, there were 4,500,664 stock options
outstanding, respectively, however their effects were anti-dilutive. There were 23,361,723 and 0 warrants outstanding for the years ended
2021 and 2020, respectively, however their effects were anti-dilutive.
SCHEDULE OF BASIC AND DILUTED PER SHARE
| | |
2021 | | |
2020 | |
| | |
For the Years Ended | |
| | |
December 31, | |
| | |
2021 | | |
2020 | |
| Loss (numerator) | |
$ | (6,062,922 | ) | |
$ | (2,778,486 | ) |
| Shares (denominator) | |
| 234,889,168 | | |
| 207,923,257 | |
| Basic and diluted loss per share | |
$ | (0.03 | ) | |
$ | (0.01 | ) |
| |
K) |
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.
In
February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) intended to improve financial reporting for leasing transactions. The
ASU requires organizations that lease assets – referred to as “lessees”- to recognize on the balance
sheet the assets and liabilities for the rights and obligations created by those leases. With the acquisition of Bronx, the Company
acquired various operating leases for eyecare locations, (see note 8). There were, however, no capital leases with respective liabilities
to record on the balance sheet.
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.
The
Company generated 100% of its revenue from one customer during 2020.
NOTE
3 – RELATED PARTY TRANSACTIONS
Notes
Payable-Related Party
As
of December 31, 2021 and 2020 there are no
related party notes payable. On December
19, 2020, the Company converted $3,540,405
of notes payable and $434,345
of accrued interest on related party notes into
4,663,705
shares of common stock and 4,500,664
stock options, leaving $0
related party notes and accrued interest on December
31, 2020. The value of the shares and options issued for notes payable, interest, accrued wages and accounts payable to related parties,
and the related gain on forgiveness of the remaining debt recorded as additional paid-in capital is further described below:
SCHEDULE OF SHARES AND OPTIONS ISSUED FOR DEBT TO RELATED PARTIES
| | |
Stock | | |
Options | | |
Gain | | |
Total | |
| Notes payable | |
$ | 387,674 | | |
$ | 339,952 | | |
$ | 2,812,779 | | |
$ | 3,540,405 | |
| Accrued interest | |
| 47,561 | | |
| 41,706 | | |
| 345,078 | | |
| 434,345 | |
| Accrued wages | |
| 74,460 | | |
| 65,295 | | |
| 540,245 | | |
| 680,000 | |
| Accounts payable | |
| 982 | | |
| 860 | | |
| 7,114 | | |
| 8,956 | |
| Totals | |
$ | 510,677 | | |
$ | 447,813 | | |
$ | 3,705,216 | | |
$ | 4,663,706 | |
Mr.
Reichman, our CEO, has rendered services to the Company and his wages have been accrued in accrued expenses at the period ended December
31, 2021, totaling $500,000. On December 19, 2020, Mr. Reichman’s Notes, accrued interest and 2020 accrued wages, totaling $3,192,385
were converted to 3,192,385 shares of common stock and 3,080,781 stock options. On December 31, 2020, Mr. Reichman’s Note payable
was $0.
Mrs.
Griffin, our President, has rendered services to the Company and her wages have been accrued in accrued expenses at the period ended
December 31, 2021, totaling $90,000. On December 19, 2020, Mrs. Griffin’s Notes, accrued interest and 2020 accrued wages, totaling
$1,045,700 were converted to 1,045,700 shares of common stock and 1,009,143 stock options. On December 31, 2020, Mrs. Griffin’s
Note payable was $0.
On
December 13, 2012, the Company executed a note payable to an individual and board member in the amount of $19,000, interest accrues at
8% per annum, unsecured, due after 8 months of execution, but extended to July 15, 2021. On December 19, 2020, the loan and accrued interest
were converted into 30,459 shares of common stock and 26,459 stock options. On December 31, 2020, the balance of this loan is $0.
On
March 6, April 22, April 30, May 24, June 14, June 21, July 3, July 30, November 20, December 2, December 13, 2013, the Company executed
notes payable to an individual and board member in the total amount of $31,000, interest accrues at 6% per annum, unsecured, due after
8 months of execution, but extended to July 15, 2021. On December 19, 2020, the loan and accrued interest were converted into 44,532
shares of common stock and 38,683 stock options. On December 31, 2020, the balance of this loan is $0.
On
January 2, January 21, April 24, May 19, July 28, August 26, and December 23, 2014, the Company executed notes payable to an individual
and board member in the total amount of $31,500, interest accrues at 6% per annum, unsecured, due after 8 months of execution, but extended
to July 15, 2021. On December 19, 2020, the loan and accrued interest were converted into 43,536 shares of common stock and 37,818 stock
options. On December 31, 2020, the balance of this loan is $0.
On
February 11, April 21, May 6, June 8, June 15, July 17, August 19, October 20, 2015, and January 22, 2016, the Company executed notes
payable to an individual and board member in the total amount of $34,800, interest accrues at 6% per annum, unsecured, due after 8 months
of execution, but extended to July 15, 2021. On December 19, 2020, the loan and accrued interest were converted into 45,837 shares of
common stock and 39,817 stock options. On December 31, 2020, the balance of this loan is $0.
On
February 28, 2013, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the amount of $5,000,
interest accrues at 6% per annum, unsecured, due after 8 months of execution, and extended to July 15, 2021. On December 19, 2020, the
loan and accrued interest were converted into 7,275 shares of common stock and 6,320 stock options. On December 31, 2020, the balance
of this loan is $0.
On
July 23, July 24, August 5, August 26, and September 13, 2013, the Company executed a note payable to a Trust and shareholder, whose
Trustee is our CEO, in the total amount of $80,000, interest accrues at 6% per annum, unsecured, due after 8 months of execution. $7,924
was paid on December 31, 2020, leaving a balance of $72,076. On December 19, 2020, the loan and accrued interest were converted into
75,319 shares of common stock and 65,427 stock options. On December 31, 2020, the balance of this loan is $0.
On
May 15, July 12, July 17, and November 22, 2013, the Company executed notes payable to a Trust and shareholder, whose Trustee is our
CEO, in the total amount of $83,877, interest accrues at 6% per annum, unsecured, due after 8 months of execution, and extended to July
15, 2021. On December 19, 2020, the loan and accrued interest were converted into 96,430 shares of common stock and 83,765 stock options.
On December 31, 2020, the balance of this loan is $0.
On
January 22, 2014, the Company executed a note agreement with a Trust and shareholder, whose Trustee is our CEO, in the amount of $14,000,
interest accrues at 6% per annum, unsecured, due after 8 months of execution, and has been extended to July 15, 2021. On December 19,
2020, the loan and accrued interest were converted into 19,619 shares of common stock and 17,042 stock options. On December 31, 2020,
the balance of this loan is $0.
On
April 7, 2014, April 17, 2014, June 6, 2014, July 18, 2014, and October 10, 2014, the Company executed note agreements with a Trust and
shareholder whose Trustee is our CEO, in various amounts totaling $24,000, interest accrues at 6% per annum, unsecured, due after 8 months
of execution, and has been extended to July 15, 2021. On December 19, 2020, the loan and accrued interest were converted into 33,528
shares of common stock and 29,124 stock options. On December 31, 2020, the balance of this loan is $0.
On
October 10, 2014, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the amount of $5,000,
interest accrues at 6% per annum, unsecured, due after 8 months of execution, but extended to July 15, 2021. On December 19, 2020, the
loan and accrued interest were converted into 6,792 shares of common stock and 5,900 stock options. On December 31, 2020, the balance
of this loan is $0.
On
December 30, 2019, the Company executed a note payable to a Trust and shareholder, whose Trustee is our CEO, in the amount of $12,765,
interest accrues at 6%, per annum, unsecured, due on July 15, 2021. On December 19, 2020, the loan and accrued interest were converted
into 13,339 shares of common stock and 11,587 stock options. On December 31, 2020, the balance of this loan is $0.
(b)
Additional detail to all Notes Payable-Related Party is as follows:
SCHEDULE OF NOTES PAYABLE RELATED PARTY
| 2021 | | |
2020 | | |
Interest | | |
Interest Expense | | |
| |
| Principal | | |
Principal | | |
Rate | | |
12/31/2021 | | |
12/31/2020 | | |
Maturity | |
| $ | - | | |
$ | - | | |
| 5.00 | % | |
$ | - | | |
$ | 75,265 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 5.00 | % | |
| - | | |
| 21,113 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 5.00 | % | |
| - | | |
| 15,372 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 5.00 | % | |
| - | | |
| 417 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 5.00 | % | |
| - | | |
| 7,500 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 5.00 | % | |
| - | | |
| 249 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 8.00 | % | |
| - | | |
| 1,140 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 1,170 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 1,419 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 1,566 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 225 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 3,600 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 2,214 | | |
| N/A | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 113 | | |
| N/A | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 1,005 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 630 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 1,080 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 225 | | |
| 7/15/21 | |
| | - | | |
| - | | |
| 6.00 | % | |
| - | | |
| 573 | | |
| 7/15/21 | |
| | | | |
| | | |
| | | |
| | | |
| | | |
| | |
| $ | 0 | | |
$ | 0 | | |
| | | |
$ | 0 | | |
$ | 134,876 | | |
| | |
Due
to Officers and Directors
Due
to officers consists of cash advances and expenses paid by Mr. Reichman in order to satisfy the expense needs of the Company. During
2021 Mr. Reichman advanced $252,929 to the Company to cover operating expenses and was repaid $362,441. During 2020 Mr. Reichman advanced
$177,513, to the Company and was repaid $68,000. On December 31, 2021, and 2020, the amounts Due to Officers and Directors for cash advances
and expenses are $0 and $109,513, respectively.
NOTE
4 – FIXED ASSETS
During
the year ended 2020, the Company wrote off all fixed assets purchased prior to 2019, that were fully depreciated. As part of the acquisition
of Bronx, the Company purchased $130,434 in fixed assets with accumulated depreciation of $19,353. Depreciation expense was $3,000
and $267
during the years ended December 31, 2021,
and 2020, respectively.
Fixed
assets consist of the following:
SCHEDULE OF FIXED ASSETS
| | |
2021 | | |
2020 | |
| Computer equipment | |
$ | 3,213 | | |
$ | 3,213 | |
| Furniture and fixtures | |
| 14,037 | | |
| - | |
| Equipment | |
| 96,954 | | |
| - | |
| | |
| | | |
| | |
| Total fixed assets | |
| 114,204 | | |
| 3,213 | |
| Accumulated Depreciation | |
| (1,601 | ) | |
| (267 | ) |
| Net fixed assets | |
$ | 112,603 | | |
$ | 2,946 | |
NOTE
5 - 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. On
December 31, 2021, and 2020, notes payable in default amounted to $871,082 and $871,082, respectively. Accrued interest on the notes
in default on December 31, 2021 and 2020 are $381,019 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.
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 on December 31, 2021, and 2020 is $21,960 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 on December 31, 2021, and 2020 is $34,099 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 on December 31, 2021, and 2020 is $28,343 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 on December 31, 2021, and 2020 is $55,087 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 on December 31, 2021, and 2020 is $165,329 and $145,909, respectively.
On
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 2021 and 2020, with an offsetting entry to 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 on December 31, 2021, and 2020 is $14,031 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 on December 31, 2021, and 2020 is $42,568 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
on December 31, 2021, and 2020 is $13,936 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 on December 31, 2021, and 2020 is $2,342
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 on December 31, 2021,
and 2020 is $3,324 and $2,904, respectively.
None
of the above notes are convertible or have any covenants.
(b)
Additional detail to all Notes Payable in Default is as follows:
SCHEDULE OF NOTES PAYABLE
| 2021 | | |
2020 | | |
Interest | | |
Interest Expense | | |
| |
| Principal | | |
Principal | | |
Rate | | |
12/31/2021 | | |
12/31/2020 | | |
Maturity | |
| $ | | |
| 32,960 | | |
| 5.00 | % | |
| 1,649 | | |
| 1,648 | | |
| 10/5/18 | |
| | 32,746 | | |
| 32,746 | | |
| 5.00 | % | |
| 1,637 | | |
| 1,636 | | |
| 10/5/18 | |
| | 5,000 | | |
| 5,000 | | |
| 6.00 | % | |
| 300 | | |
| 300 | | |
| 10/5/18 | |
| | 100,000 | | |
| 100,000 | | |
| 5.00 | % | |
| 5,000 | | |
| 5,000 | | |
| 10/5/18 | |
| | 7,000 | | |
| 7,000 | | |
| 6.00 | % | |
| 420 | | |
| 420 | | |
| 10/5/18 | |
| | 388,376 | | |
| 388,376 | | |
| 5.00 | % | |
| 19,420 | | |
| 19,420 | | |
| 10/5/18 | |
| | 192,000 | | |
| 192,000 | | |
| 0 | % | |
| 13,440 | | |
| 13,440 | | |
| 10/5/18 | |
| | 18,000 | | |
| 18,000 | | |
| 6.00 | % | |
| 1,080 | | |
| 1,080 | | |
| 9/1/2002 | |
| | 30,000 | | |
| 30,000 | | |
| 6.00 | % | |
| 1,800 | | |
| 1,800 | | |
| 9/12/2002 | |
| | 25,000 | | |
| 25,000 | | |
| 5.00 | % | |
| 1,250 | | |
| 1,250 | | |
| 8/31/2000 | |
| | 40,000 | | |
| 40,000 | | |
| 7.00 | % | |
| 2,800 | | |
| 2,800 | | |
| 7/10/2002 | |
| | | | |
| | | |
| | | |
| | | |
| | | |
| | |
| $ | 871,082 | | |
$ | 871,082 | | |
| | | |
$ | 48,796 | | |
$ | 48,796 | | |
| | |
(c)
NOTES PAYABLE
Notes
payable consist of four notes bearing interest at rates from 3.75% to 6%, which are unsecured with due dates between July and December
2022. As of December 31, 2021, and 2020, notes payable amounted to $1,072,000 and $0, respectively. Accrued interest on the notes at
December 31, 2021, and 2020 are $5,088 and $0, respectively. Below is a discussion of the details to the notes payable and a table summarizing
the notes with additional information.
On
July 20, 2021, the Company received cash from an individual in the amount of $100,000 as a loan bearing interest at 6%, with a term of
12 months of the date received. At December 31, 2021 and 2020, accrued interest on this note totals $2,684 and $0, respectively.
On
August 6, 2021, the Company received cash from an individual in the amount of $100,000 as a loan bearing interest at 6%, with a term
of 12 months of the date received. At December 31, 2021 and 2020, accrued interest on this note totals $2,404 and $0, respectively.
On
December 31, 2021, the Company executed a note with an individual who had advanced funds throughout the year to assist management in
their cashflow needs. The total amount received at December 31, 2021 was $722,000. The note bears interest at 6%, with a term of 12 months
from December 31, 2021. Interest will begin to accrue on January 1, 2022, therefore, there was no accrued interest on this note at December
31, 2021.
In
September 2020, the Bronx received a Small Business Administration (“SBA”) Loan pursuant to the Economic Injury Disaster
Loan. The Company received a loan in the amount of $150,000 from the SBA. The SBA Loan is in the form of a Note dated August 29, 2020,
which matures on August 29, 2050. The SBA Loan bears interest at a rate of 3.75% per annum and is payable monthly commencing on August
29, 2021. The monthly principal and interest payment for the SBA Loan will be $731. All proceeds from this Loan will be used solely as
working capital to alleviate economic injury caused by the Economic Injury Disaster. At December 31, 2021, the outstanding balance was
$150,000, with accrued interest of $1,875.
Future
maturities of notes payable are as follows:
SCHEDULE OF FUTURE MATURITIES OF NOTES PAYABLE
Year
Ending December 31,
| | |
| | |
| 2022 | |
$ | 924,986 | |
| 2023 | |
| 3,376 | |
| 2024 | |
| 3,505 | |
| 2025 | |
| 3,639 | |
| 2026 | |
| 3,778 | |
| Thereafter | |
| 132,716 | |
| Total | |
$ | 1,072,000 | |
At
December 31, 2021, and 2020, accrued interest on all outstanding notes payable and notes payable in default were $387,982 and $345,663,
respectively. Interest expense on the outstanding notes amounted to $53,962 and $183,669 for the years ended December 31, 2021, and 2020,
including the imputed interest discussed above.
(d)
CONVERTIBLE DEBENTURE:
On
November 27, 2020, the Company executed a convertible debenture with a corporation in the amount of $74,800, interest accrues at 10%
per annum, unsecured, due on November 27, 2021. The debenture includes a conversion right to be exercised at any time 180 days after
execution of the note and is 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 insure there are sufficient shares available upon conversion.
The
convertible debenture also contains a OID or original issue discount of $6,800,
which was deducted from the proceeds, thus advancing $68,000
to the Company. Because the Company prepaid the
debenture, the OID was completely expensed in the 2020 year.
On
February 26, 2021, the Company prepaid the Convertible Debenture and all accrued penalties pursuant to the agreement, along with the
accrued interest. Accrued interest and penalties on December 31, 2020, was $12,045, and the Convertible Debenture balance was $74,800.
NOTE
6 – INCOME TAXES
The
Company follows the provisions of ASC 740, “Income Taxes.” This standard requires a company to determine whether it is more
likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not
threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result
of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and
measurement standards established by ASC 740.
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 basis. 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
not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Deferred
tax assets and the valuation account are as follows:
SCHEDULE OF DEFERRED TAX ASSETS
| | |
2021 | | |
2020 | |
| Deferred tax assets: | |
| | | |
| | |
| NOL carryover | |
$ | 3,838,795 | | |
$ | 3,508,211 | |
| Valuation allowance | |
| (3,838,795 | ) | |
| (3,508,211 | ) |
| Net deferred tax asset | |
$ | - | | |
$ | - | |
The
income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 21%
to pretax income from continuing operations for the years ended December 31, 2021, and 2020.
The
components of income tax expense are as follows:
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE
| | |
2021 | | |
2020 | |
| | |
| | |
| |
| Book loss | |
$ | (1,273,214 | ) | |
$ | (583,482 | ) |
| Stock based compensation | |
| 970,259 | | |
| 427,056 | |
| Non-deductible expenses | |
| 91 | | |
| 87 | |
| Unrealized/Realized gains or losses on Securities (net) | |
| (27,720 | ) | |
| 2,709 | |
| Change in NOL valuation allowance | |
| 330,584 | | |
| 153,630 | |
| Income tax expense benefit | |
$ | - | | |
$ | - | |
The
Company currently has no issues creating timing differences that would mandate deferred tax expense. Net operating losses would create
possible tax assets in future years. Due to the uncertainty of the utilization of net operating loss carry forwards, a valuation allowance
has been made to the extent of any tax benefit that net operating losses may generate. A provision for income taxes has not been made
due to net operating loss carry-forwards of $17,452,897
and $15,878,689
as of December 31, 2021, and 2020, respectively,
which may be offset against future taxable income. No tax benefit has been reported in the financial statements.
A
reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
SCHEDULE OF RECONCILIATION OF BEGINNING AND ENDING OF UNRECOGNIZED TAX BENEFITS
| | |
2021 | | |
2020 | |
| | |
December 31, | |
| | |
2021 | | |
2020 | |
| | |
| | |
| |
| Beginning balance | |
$ | 3,508,211 | | |
$ | 3,354,581 | |
| Additions based on tax positions related to current year | |
| 330,584 | | |
| 153,630 | |
| Additions for tax positions of prior years | |
| - | | |
| - | |
| Reductions for tax positions of prior years | |
| - | | |
| - | |
| Reductions in benefit due to income tax expense | |
| - | | |
| - | |
| Ending balance | |
$ | 3,838,795 | | |
$ | 3,508,211 | |
The
Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly
increase or decrease within the next 12 months.
The
Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in
the provision for income taxes. As of December 31, 2021, and 2020, the Company had no accrued interest or penalties related to uncertain
tax positions.
The
tax years that remain subject to examination by major taxing jurisdictions are for the years ended December 31, 2021, 2020, 2019, 2018,
2017 and 2016.
NOTE
7 – STOCKHOLDERS’ DEFICIT (RESTATED)
| A) | NUMBER
OF SHARES AUTHORIZED |
The
Board of Directors have authorized 550,000,000 shares of common stock to be issued at a par value of $0.001. As of December 31, 2021
and 2020, 239,790,585 and 230,498,005 shares of common stock are issued and outstanding, respectively.
The
Board of Directors authorized 50,000 shares of “blank check” preferred stock. The terms, rights and features of the preferred
stock will be determined by the Board of Directors upon issuance. Subject to the provisions of the Company’s certificate of amendment
to the articles of incorporation and the limitations prescribed by law, the Board of Directors would be expressly authorized, at its
discretion, to adopt resolutions to issue shares, to fix the number of shares and to change the number of shares constituting any series
and to provide for or change the voting powers, designations, preferences and relative, participating, optional or other special rights,
qualifications, limitations or restrictions thereof, including dividend rights (including whether the dividends are cumulative), dividend
rates, terms of redemption (including sinking fund provisions), redemption prices, conversion rights and liquidation preferences of the
shares constituting any series of the preferred stock, in each case without any further action or vote by the stockholders. The Board
of Directors would be required to make any determination to issue shares of preferred stock based on its judgment as to the best interests
of the Company.
During
2016, Board of Directors authorized the issuance of 1,000 shares of Series A Preferred Stock to David Reichman, the Company’s CEO.
Mr. Reichman has advance significant capital and expended significant time to the Company without compensation. As an effort to give
Mr. Reichman security for his advances, the 1,000 shares of preferred were issued. The Series A Preferred Shares have the following features
attached:
| |
1) |
Non-participating
in the dividends to the Common Shareholders |
| |
2) |
No
Liquidation Preference |
| |
3) |
Voting
Rights to include: the right to vote in an amount equal to 51% of the total vote with respect to any proposal relating to (a) increasing
the authorized share capital of the Company, (b) effecting any forward stock split of the Company’s authorized, issued or outstanding
shares of capital stock, and (c) any other matter subject to a shareholder vote. |
| |
4) |
No
conversion rights |
| |
5) |
Redemption
Rights: The Series A shares shall be automatically redeemed upon (a) Mr. Reichman ceases to serve as an officer or director of the
Company, (b) on the date that the Company’s shares or common stock first trade on any national securities exchange |
| C) | ISSUANCES
OF COMMON STOCK |
On
May 6, 2020, the Board of Directors authorized the issuance of 3,040,000 shares for services valued at $60,800, the market price of the
shares upon grant.
On
June 24, 2020, the Board of Directors authorized the issuance of 1,500,000 shares for services valued at $30,000, the market price of
the shares upon grant.
On
September 3, 2020, the Board of Directors authorized the issuance of 500,000 shares for services valued at $20,750, the market price
of the shares upon grant.
On
September 23, 2020, the Board of Directors authorized the issuance of 1,500,000 shares for services valued at $30,000, the market price
of the shares upon grant.
On
November 18, 2020, the Board of Directors authorized the issuance of 10,000,000
shares for investor relations (IR) and
marketing services valued at $1,158,000,
the market price of the shares upon grant.
On
December 3, 2020, the Board of Directors authorized the issuance of 3,000,000 shares for IR services valued at $322,500, the market price
of the shares upon grant. Since the service period had not been completed on December 31, 2020, the Company recorded a prepaid expense
in the amount of $222,167, which will be expensed in the first quarter 2021.
On
December 16, 2020, the Board of Directors authorized the issuance of 3,000,000 shares for services valued at $249,674, the market price
of the shares upon grant.
On
December 19, 2020, the Board of Directors authorized the issuance of 4,663,705 shares for the conversion of related party notes payable
and accrued interest of $510,676, the market price of the shares upon grant.
On
December 19, 2020, the Board of Directors authorized the issuance of 2,500,000 shares for the services valued $161,875, the market price
of the shares upon grant.
On
December 31, 2020, the Board of Directors authorized the issuance of 184,840 shares previously “held for cancellation” shares
that were issued in 2013 for services. No expense was recorded for this adjustment.
On
January 2, 2021, the Board of Directors authorized the issuance of 1,500,000 shares for services valued at $148,500, the market price
of the shares upon authorization.
On
March 15, 2021, the Board of Directors authorized the issuance of 3,000,000 shares for IR services valued at $322,500, the market price
of the shares upon grant.
On
April 1, 2021, the Board of Directors authorized the issuance of 2,650,000
shares for the acquisition of Bronx Family Eye Care, Inc. The Acquisition closed on December 31, 2021 was valued at $4,346,000,
the market price of the shares upon closing.
On
April 7, 2021, the Board of Directors authorized the issuance of 50,000 shares for services valued at $97,500, the market price of the
shares upon authorization.
On
June 30, 2021, the Board of Directors authorized the issuance of 116,995 shares for services valued at $168,473,
the market price of the shares upon authorization.
On
June 7, 2021, Management renegotiated the contract service agreements with three professionals wherein the 250,000
shares received by each on January 2, 2021, would
be earned and recorded each quarter with the number of shares earned based on the average moving stock price for the last 10 days
of each quarter. The modification of the original agreement resulted in the total 750,000 shares being valued at $1,312,500 which
was the fair value on June 7, 2021. The 250,000 shares issued to each consult were then considered unvested at the beginning
of the year. The expense would be recorded each quarter and the shares would be determined to be vested and earned each
quarter.
On
August 11, 2021, the Board of Directors authorized the issuance of 125,000 shares for legal services valued at $237,500, the market price
of the shares upon authorization.
On
September 29, 2021, the Board of Directors authorized the issuance of 1,282,140
shares for medical advisory, charitable and other
services valued at $1,730,889,
the market price of the shares upon authorization.
On
November 1, 2021, the Board of Directors authorized the issuance of 82,573
shares of common stock for services valued
at $85,920,
the market price of the shares upon authorization.
On
November 1, 2021, 3,080
warrants were exercised with cash of $8,471
for the issuance of 3,080
shares of common stock.
On
December 31, 2021, the Board of Directors authorized the issuance of 282,121
shares of common stock for services valued
at $437,180,
the market price of the shares upon authorization.
On
December 31, 2021, the Board of Directors authorized a total of 100,671 additional shares of common stock to be issued to
three consultants as determined by the average moving stock price for the last 10 days of the quarter per their service agreement. The
100,671 shares of common stock had a fair value of $151,007.
On
December 31, 2021, the Board of Directors authorized the issuance of 100,000
shares of common stock for cash of $100,000
pursuant to a private placement memorandum.
| D) | 2007
OMNIBUS STOCK AND INCENTIVE PLAN |
On
September 24, 2007, the Board of Directors authorized the creation of the 2007 Omnibus Stock and Incentive Plan (the “2007 Plan”).
The 2007 Plan was approved by the stockholders on November 28, 2007. An aggregate of 60,000 shares of common stock is reserved for issuance
and available for awards under the 2007 Plan.
Awards
under the 2007 Plan may include non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”),
restricted shares of common stock, restricted units and performance awards. For a complete description of the Plan, see Global Tech’s
Form 8-K filed with the SEC on November 7, 2007.
Effective
January 1, 2009, the Company organized the Tree Top Industries Profit-Sharing Plan Trust, to manage the Company’s Employee Stock
Option Profit-Sharing Plan (“the Plan”). On November 13, 2018, the Trust name was changed to Global Tech Industries Group
Profit Sharing Plan Trust. At the direction of the Board of Directors, the Company annually issues share to the Trust for the future
benefit of the employees of the Company. The plan allows the Board of Directors to issue shares to the Trust annually to be allocated
to the participants.
The
Plan was organized consistent with the requirements of Section 401(a) of the Internal Revenue Code of 1986; however, the Plan has not
been administered as a qualified retirement plan, and therefore, the shares issued to the ESOP have not been deducted for federal tax
purposes. The employee group is a Top-Heavy group of Key Employees, however, the plan will also cover all employees that are eligible.
Eligibility occurs for each employee that is employed on the anniversary date of the Plan. Participation shall cease upon the termination
of the employee services, on account of death, disability, retirement or the separation from the employer. Each year the Employer shall
contribute either cash or stock of the Corporation, an amount to the Plan as shall be determined by the Board of Directors. The contributions
vest as follows:
| |
For
each of the first two years of Service |
10%
per year |
| |
Each
additional year of Service over two years |
20%
additional |
| |
Full
vesting after six years of Service |
0% |
Retirement
and death benefits commence at the termination of Service. Benefits may be paid in Cash, Stock or through a Qualified Join and Survivor
Annuity.
Pursuant
to ASC 718, the Company’s ESOP Plan is a non-leveraged plan, and therefore compensation expense is recorded at the fair value of
the shares issued at the grant date. The Company has never issued dividends to its shareholders, and therefore no dividends have been
issued to the ESOP plan. The ESOP shares are considered issued and outstanding for the earnings per share computation. Compensation expense
of $0
and $150,000
has been recorded during 2020 or 2019, respectively,
for the ESOP shares issued. There have been 23,500,000
and 23,500,000
share allocated to the participants of the Plan,
as of December 31, 2021, and 2020, respectively and none of the shares have been committed for release. There are no shares in suspense
as of December 31, 2021, and 2020, respectively. The fair value of the ESOP shares being held by the Trust as of December
31, 2021, and 2020 is $35,250,000
and $2,350,000,
respectively. There is no repurchase obligation on the Company to purchase back any shares issued to the ESOP Trust. No dividends have
been issued to the ESOP Trust, therefore there has been no tax benefit treatment in the Earnings Per Share computation.
No
ESOP shares were issued for the 2021 or 2020 years.
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:
| |
● |
One
option allows for the purchase of one share of common stock |
| |
● |
The
strike price of the option is $.01 |
| |
● |
The
conversion term is 2 years from issuance date |
| |
● |
All
options are vested immediately |
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.
SCHEDULE
OF STOCK OPTION ISSUANCE OF FAIR VALUE ASSUMPTIONS
| Assumptions: | |
2020 | |
| Assumptions applicable to stock options issued | |
| | |
| Risk-free interest rate | |
| 3 | % |
| Expected lives (in years) | |
| 2 | |
| Expected stock volatility | |
| 72 | % |
| Dividend yield | |
| - | |
Stock
option transactions are as follows:
SCHEDULE
OF STOCK OPTIONS
| | | |
| | |
Weighted | | |
Weighted | | |
| |
| | | |
| | |
Average | | |
Average | | |
Aggregate | |
| | | |
| | |
Exercise | | |
Remaining | | |
Intrinsic | |
| | | |
Shares | | |
Price | | |
Term | | |
Value | |
| Outstanding on January 1, 2020 | | |
| - | | |
$ | - | | |
| - | | |
$ | - | |
| Granted | | |
| 4,500,644 | | |
| .01 | | |
| 2 yrs | | |
| 427,563 | |
| Exercised | | |
| | | |
| | | |
| | | |
| | |
| Forfeited | | |
| | | |
| | | |
| | | |
| | |
| Outstanding on December 31,2020 | | |
| 4,500,664 | | |
$ | .01 | | |
| 2 yrs | | |
$ | 427,563 | |
| Granted | | |
| | | |
| | | |
| | | |
| | |
| Exercised | | |
| | | |
| | | |
| | | |
| | |
| Forfeited | | |
| | | |
| | | |
| | | |
| | |
| Outstanding on December 31, 2021 | | |
| 4,500,664 | | |
$ | .01 | | |
| 1 yrs | | |
$ | 427,563 | |
On
March 22, 2021, GTII entered into a warrant agreement with Liberty Stock Transfer Agent (“Liberty”), whereby Liberty agreed
to act as GTII’s warrant agent in its offering of warrants to GTII’s shareholders (each, a “Warrant”). All shareholders
of record on April 1, 2021, were issued 0.10 of a Warrant per share of Common Stock held of record by such holder. This agreement created
23,364,803 warrants to the shareholders of the Company as a dividend valued at $57,689,800, and recorded as a decrease in retained earnings
with the offsetting entry to paid in capital. The Warrants were issued on April 8, 2021. Each full Warrant shall be exercisable into
one share of GTII’s common stock at an exercise price of $2.75. The Warrants shall expire on April 8, 2023. Manhattan Transfer
Registrar Co. shall act as co-agent with Liberty. On July 27, 2021, the Company filed an Amended Registration Statement to register the
warrants to be free trading when exercised.
SCHEDULE
OF WARRANTS ISSUANCE OF FAIR VALUE ASSUMPTIONS
| Assumptions: | |
| 2021 Warrants | |
| Assumptions applicable to stock options issued | |
| | |
| Risk-free interest rate | |
| .25- | % |
| Expected lives (in years) | |
| 2 | |
| Expected stock volatility | |
| 266- | % |
| Dividend yield | |
| - | |
Warrant
transactions are as follows:
SCHEDULE
OF STOCK WARRANTS ACTIVITIES
| | | |
| | |
Weighted | | |
Weighted | | |
| |
| | | |
| | |
Average | | |
Average | | |
Aggregate | |
| | | |
| | |
Exercise | | |
Remaining | | |
Intrinsic | |
| | | |
Shares | | |
Price | | |
Term | | |
Value | |
| Outstanding at January 1, 2020 | | |
| - | | |
$ | - | | |
| - | | |
$ | - | |
| Granted | | |
| - | | |
| - | | |
| - | | |
| - | |
| Exercised | | |
| - | | |
| - | | |
| - | | |
| - | |
| Forfeited | | |
| - | | |
| - | | |
| - | | |
| - | |
| Outstanding at December 31, 2020 | | |
| - | | |
$ | - | | |
| - | | |
$ | - | |
| | | |
| | | |
| | | |
| | | |
| | |
| Granted | | |
| 23,364,803 | | |
| 2.75 | | |
| 2.0 yrs | | |
$ | 57,689,800 | |
| Exercised | | |
| (3,080 | ) | |
| 2.75 | | |
| - | | |
| (8,471 | ) |
| Forfeited | | |
| - | | |
| - | | |
| - | | |
| - | |
| Outstanding at December 31, 2021 | | |
| 23,361,723 | | |
$ | 2.75 | | |
| 1.25 yrs | | |
$ | 57,681,330 | |
During
the years ended December 31, 2021 and 2020, the Company recorded imputed interest on a non-interest-bearing note in the amount of $13,440
and $13,440, respectively, as an increase in additional paid in capital.
NOTE
8- COMMITMENTS AND CONTINGENCIES
Global
Tech Industries Group, Inc. currently does not lease, rent or own any property, however our subsidiary Bronx has entered into the following
leases:
In
June 2016, we entered into a month-to-month lease for retail space at 432 East 149th St. in Bronx, NY. Every year in June,
there is a 3% increase in the rent fees. In June 2020 base rent was $4,035.79 + utility and maintenance charges. As of December 2021,
base rent charge was $4,280.86 + maintenance and utility.
In
June 2016, we entered into a month-to-month lease for retail space at 2336 Grand Concourse. in Bronx, NY.
In
2020 base rent was performance based and monthly totals ranged between $3,500 to $7,000. As of April 2020, we entered into an agreement
for a fixed monthly of $4,500 with no rent increases during 2022. In April 2023, the lease will increase by 3%.
In
September 1, 2018, we entered a 5-year operating lease for a retail space at 593 East Tremont in Bronx, NY with monthly payments of
$3,903.84. In September of 2020, monthly rent increased to $4,020.96. In January of 2022, monthly rent increased to $4,265.83. In September
of 2021, there is an option to renew for an additional 5 years.
In
November 2020, we entered a 5-year operating lease for a retail space at 1420 St. Nichlas in Bronx, NY with monthly payments at $22,000,
of which $2,000 each month is appropriated towards a security deposit. A security deposit of $40,000 was paid upon signing of the lease
as of December 31, 2020, $40,000 is recorded as a security deposit asset on the balance sheet. As of December 1, 2021, there is $60,000
(3 months rent) in security deposit held by the landlord company. On this date, recurring monthly charges will be $21,500 per month.
On December 1, 2022 rent charge will increase to $22,145/month. On December 1, 2023, rent charge will increase to $22,809. On December
1, 2024 rent charge will increase to $23,493. This lease is up for renewal in December 2025.
Two
of our leases are month to month and are considered short-term operating leases and are precluded from being recognized as Right-of Use
assets, however, our other two leases with long terms have been reported as ROU asset in the property, plant and equipment category,
with offsetting operating lease liabilities, both current and long-term.
All
of our retail leases include fixed rental payments. In addition, we also commonly enter into leases under which the lease payments increase
at pre-determined dates based on a 3% cost of living increase. While some of our leases are gross leases, we also have leases in which
we make separate payments to the lessor based on the lessor’s property and casualty insurance costs and the property taxes assessed
on the property, as well as a portion of the common are maintenance associated with the property. We have elected the practical expedient
method and do not separate lease and non-lease components for all of our building leases.
During
2021 and 2020, we recognized rent expense associated with our leases as follows:
SCHEDULE
OF LEASE COST
| | |
2021 | | |
2020 | |
| Operating
lease costs: | |
| | |
| |
| Fixed
Rent expense | |
$ | 5,733 | | |
$ | - | |
| Net
lease cost | |
$ | 5,733 | | |
$ | - | |
| Lease
cost – General & administrative | |
$ | 5,733 | | |
$ | - | |
| Net
lease cost | |
$ | 5,733 | | |
$ | - | |
The
future payments due under operating leases as of December 31, 2021 is as follows:
Due
in:
SCHEDULE
OF operating leases payments due
| | |
| 2021 | |
| 2022 | |
$ | 316,932 | |
| 2023 | |
| 312,102 | |
| 2024 | |
| 281,916 | |
| | |
| | |
| Total future payments | |
| 910,950 | |
| Less
effects of discounting | |
| (77,154 | ) |
| Lease
liability recognized | |
$ | 833,796 | |
As
of December 31, 2021, the weighted average remaining lease term for our operating leases is 2.5 years.
Because
we generally do not have access to the rate implicit in the lease, we utilize our incremental borrowing rate as the discount rate. The
weighted average discount rate associated with operating leases as of December 31, 2021 is 6%. The incremental borrowing rate is the
rate of interest that we would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments
in a similar economic environment. In determining that rate, the Company considers prevailing economic conditions at the commencement
date and factors such as company-specific credit risk, term of the lease and options, and the effect of collateralization based on the
nature and quality of the underlying asset.
During
March 2013, the Company was named in an action pertaining to the 75% working interest in the Ownbey Lease. Subsequent to the Company’s
purchase of the assets and the termination of the operator, a mechanics lien was filed against the property claiming approximately $267,000
in fees are due to the previous operator. An action commenced in the District Court of Chautauqua County, Kansas, captioned Aesir Energy,
Inc. vs. American Resource Technologies, Inc.; Nancy Ownbey Archer; Jimmy Stephen Ownbey; Robbie Faye Butts; Global Tech Industries Group,
Inc. and TTII oil & Gas, Inc. In February 2017, the Chautauqua Court ruled that the acquisition agreement be nullified. During 2019,
all assets and liabilities were removed from the companies’ books including an asset retirement obligation of $101,250 that was
associated with the oil and gas property. No other monetary claims have been asserted against GTII or TTII Oil & Gas, Inc
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 the 2nd quarter
2020, the Company was successful in recalling the 4,668,530 shares and cancelling them from the shareholders 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, Docket No.17-CV-03727 . On October
2, 2019, the Company was able to secure, via preliminary settlement, the return of 43,649,491 shares of the Company’s stock out
of the original 50,649,491 that were issued in good faith to GoFun in anticipation of a final stock exchange. That stock has been returned
to the Company’s treasury and cancelled. On May 14, 2021, the Superior Court of New Jersey, Chancery Division: Monmouth County
(docket no. PAS-MON-C-60-21) issued an order restraining the removal of restrictive legends on the remaining 7,000,000 shares of stock,
pending further order of the New Jersey Court. The underlying matter currently in the U.S. district Court for the Southern District of
New York, remains pending.
.
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, counsel for the Company accepted previously-issued shares as full payment for all legal work, expenses, costs, and other
fees.
On
March 17, 2021, the Company filed an action against Pacific Technologies Group, Inc., Rollings Hills Oil and Gas Inc., Demand Brands,
Inc., Innovativ Media Group, Inc., Tom Coleman, and Bruce Hannan, in the Supreme Court of the State of New York, County of New York (Index
No. 651771/2021), alleging fraud, rescission and cancellation of a written instrument, unconscionability, breach of contract, breach
of good faith and fair dealing, unjust enrichment, and civil conspiracy. The action stems from a stock purchase agreement entered into
by the Company and Pacific Technologies Group, Inc. (then known as Demand Brands, Inc.) on October 16, 2018. On May 22, defendants filed
a motion seeking additional time to answer. As of December 31, 2021, no ruling on that motion has been entered.
On
August 16, 2021, the Company filed an action against David Wells, in the United States District Court for the Southern District of
New York (Case 1:21-cv-06891) seeking injunctive relief and relinquishment of 150,000
shares held in the name of David Wells. As of December 31, 2021, David Wells has not yet filed an answer to the Company’s
complaint. On November 11, 2021, David Wells filed an action against GTII in the United States District Court for the District of
Nevada, (Case 2:21-cv-02040) claiming a violation of the duty to register transfer of shares. As of December 31, 2021, the parties
are engaged in briefing jurisdictional motions.
On
August 24, 2021, the Company filed an application for a temporary restraining (“TRO”) order in the Superior Court of New
Jersey, Chancery Division: Monmouth County (Docket No.: Mon-C-132-21) seeking to restrain Liberty Stock Transfer, Inc. from removing
restrictive legends from 6,000,000 shares of Company stock held in the name of International Monetary, as well as from transferring said
shares. The Court granted the TRO effective until September 28, 2021. On September 28, 2021, the Court declined to issue any further
restraints.
In
the interim, on September 16, 2021, International Monetary filed an action against the Company in Clark County, Nevada (Case No: A-21-841175-B)
alleging breach of contract and breach good faith and fair dealing, as well as a request for declaratory relief, and temporary restraining
order and preliminary injunction. On September 30, 2021, the Company filed a notice of removal of the action to the United States District
Court for the District of Nevada (Case 2:21-cv-01820), as well as a request for a temporary restraining order enjoining International
Monetary from taking any action to remove the restrictive legend shares from Company shares held in its name. On October 14, 2021, International
Monetary filed a motion to strike the petition for removal. As of December 31, 2021, no ruling on that motion has been entered.
Effective
October 1, 2007, the Company entered into a two-year employment agreement with David Reichman, Chief Executive Officer, pursuant to which
Mr. Reichman was paid an annual salary of $250,000, payable in semi-monthly installments. In addition, Mr. Reichman may be paid a bonus
or bonuses during each year, as determined at the sole discretion of the Board of Directors and receive stock options to purchase 1.2
million shares of common stock as discussed above. During the year ended December 31, 2009, the Board of Directors approved the extension
of this contract an additional two years from the date of expiration, at an annual salary of $500,000. During the year ended December
31, 2012, the Board of Directors approved the extension of this contract until December 31, 2013, with a salary of $1. Mr. Reichman’s
salary has been accruing because Global Tech is without the resources to pay the salary in full. This employment agreement was filed
on November 7, 2007, as exhibit 99.2 to a current report of the Company on Form 8-K and is incorporated herein by reference. Mr. Reichman’s
contract has been extended by mutual consent to December 31, 2017. Predicated upon the executed Agreement between GTII and GoFun, The
Board of Directors of GTII voted pursuant to the Agreement to begin salary payments as of April 2, 2017, retroactive to January 1, 2017,
and thru December 31, 2021.
Effective
April 1, 2009, the Company entered into a three-year
employment agreement with Kathy Griffin, President, pursuant to which Mrs. Griffin was paid an annual salary of $127,500,
payable in semi-monthly installments. In addition, Mrs. Griffin may be paid a bonus or bonuses during each year, as determined at
the discretion of the CEO, and receive stock options to purchase shares of common stock as discussed above. Mrs. Griffin was given a
salary increase effective April 1, 2010, to an annual salary of $180,000.
This salary increase accrued in 2010 because Global Tech was without resources to pay the salary increase. This employment agreement
was filed on March 25, 2010, as exhibit 10.1 to a current report of the Company on Form 8-K and is incorporated herein by reference. Mrs.
Griffin’s employment contract has been extended on December 31, 2012, until December 31, 2013, with a salary of $1.
Mrs. Griffin’s contract was extended by mutual consent to December 31, 2017. Predicated upon the executed Agreement between
GTII and GoFun, The Board of Directors of GTII voted pursuant to the Agreement to begin salary payments as of April 2, 2017,
retroactive to January 1, 2017, and thru December 31, 2020. During 2021, Mrs. Griffin began to work part-time and therefore was
accrued salaries of $90,000
per year.
Effective
April 1, 2021, the Company entered into a twelve-month
employment agreement with Nikolay Bitsenko the Senior Optometrist, pursuant to which Mr. Bitsenko was paid an annual salary of
$148,356,
payable in monthly installments. In addition, Mr. Bitsenko may be paid a bonus or bonuses during the year, as determined at the discretion
of the board of directors.
Effective
April 1, 2021, the Company entered into an eighteen-month
employment agreement with Michael Andreyev, a Staff Optometrist pursuant to which Mr. Andreyev was paid an annual salary of $74,400,
payable in monthly installments. In addition, Mr. Andreyev may be paid a bonus or bonuses during the year, as determined at the discretion
of the board of directors.
NOTE
9 - 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 on December 31, 2021, and 2020 amounted
to $163,000 and $31,000, respectively. All realized gains and losses and unrealized gains and losses are recorded in earnings. For the
year ended December 31, 2020, the Company recorded a net loss of $12,901 which consisted of realized gains of $40, and unrealized losses
of $12,941. For the year ended December 31, 2021, the Company recorded a net gain of $132,000 which consisted of unrealized gains. 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 10 – RESTATEMENT
OF PRIOR ISSUED FINANCIAL STATEMENTS
The financial statements
for the year ended December 31, 2021 have been restated due to an error in reporting the market value of our acquisition. The original
valuation was based on the Fair Market Value of shares issued for the acquisition on the agreement of the transaction (grant date) and
has been changed to the Fair Market Value on the closing date of the transaction. The decrease in share value resulted in a reduction
of Goodwill acquired and a corresponding decrease in Additional paid-in-capital. The restatement did not have an impact on the statement
of operations or cash flows of the Company. The impact of the Restatement is shown as follows at December 31, 2021:
SCHEDULE
OF RESTATEMENT OF PRIOR ISSUED FINANCIAL STATEMENTS
| | |
| | |
| | |
| |
| | |
Year Ended December 31, 2021 | | |
| |
| | |
As Previously | | |
| | |
| |
| | |
Reported | | |
Adjustment | | |
As Restated | |
| Balance Sheet Data: | |
| | | |
| | | |
| | |
| Goodwill | |
| 6,443,559 | | |
| (2,623,500 | ) | |
| 3,820,059 | |
| Additional paid-in-capital | |
| (237,774,709 | ) | |
| 2,623,500 | | |
| (235,151,209 | ) |
NOTE
11 - SUBSEQUENT EVENTS
The Company has evaluated events occurring
after December 31, 2021 through the date these financial statements were issued and noted the following items requiring disclosure:
On January 4, 2022, the Board of Directors
authorized the issuance of 50,000 shares of common stock for art procurement consulting.
On
January 10, 2022, GTII executed a memorandum of understanding with DTXS Auction, Ltd., a wholly-owned subsidiary of DTXS Silk Road Investment
Holdings Company, Ltd., (HKSE code 0620). On January 31, 2022, GTII executed a proposal sheet with DTXS Auction, Ltd., for the proposed
exchange of 100,000 shares of the Company’s common stock for 350,000 shares of the common stock of DTXS Silk Road Investment Holdings
Company, Ltd. The proposal sheet provides that, in consideration for the share exchange, DTXS will (a) develop a Chinatown art district
within the Company’s planned Metaverse and (b) provide the Company with access to Chinese art pieces that it owns, controls or
has access to, from eras of Chinese antiquity.
Also
on January 10, 2022, GTII executed an irrevocable gift agreement with Icahn School of Medicine at Mount Sinai for the donation of 250,000
shares of the Company’s common stock over each of the next three years, inclusive of 2022.
On
January 17, 2022, GTII executed a memorandum of understanding with TCG Gaming B.V., a Netherlands based metaverse development company,
for the lease of a plot of virtual land in the TCG World metaverse.
On
January 18, 2022, Classroom Salon Holdings, LLC, executed membership interest purchase agreements, as well as assignments of membership
interests, resulting in the potential acquisition of 100%
of Classroom Salon, LLC, a Pennsylvania limited
liability company, subject to the closing conditions. On February 22, 2022, Classroom Salon, LLC, executed an amended and restated
license agreement with Carnegie Mellon University. On February 25 2022, Classroom Salon Holdings, LLC completed its requisite two-year,
PCAOB audit. Classroom Salon Holdings and Classroom Salon, LLC combined have no revenues, assets or liabilities, however, Class Salon,
LLC holds a license agreement with Carnegie Mellon University with the following terms:
On
January 16, 2014 and updated and revised on February 25, 2022, Classroom Salon, LLC signed a licensing agreement with Carnegie Mellon
University for the purpose of further development of the licensed technology. As part of the agreement, Carnegie Mellon acquired an ownership
interest of 9.55% in Classroom Salon, LLC and also received an agreement for future royalties. The term of the license agreement is for
a period of 20 years. Minimum performance requirements are listed below.
| |
(i) |
Submission
of a revised business plan to Carnegie Mellon, solely acceptable to Carnegie Mellon, by April 30, 2022. |
| |
(ii) |
Execution
of agreement(s) with any development partner(s) involving the Licensed Technology to be completed no later than December 31, 2022. |
| |
(iii) |
Funding
of $5,000,000 (including grants) attained by January 31, 2024 |
| |
(iv) |
Rebranded
product specification of a Licensed Product to be developed and preliminary market testing of a Licensed Product to be completed
by July 31, 2024. |
| |
(v) |
Commercial
product introduction of a Licensed Product to be achieved by January 31, 2025. |
| |
(vi) |
Minimum
revenues during the three years specified below must meet the following schedule: |
| |
|
a) |
Year
ending 2025 = $1,000,000 |
| |
|
b) |
Year
ending 2026 = $2,500,000 |
| |
|
c) |
Year
ending 2027 = $5,000,000 |
Carnegie
Mellon is entitled to a royalty of 2.85% of net sales. If licensee decides to sublicense, Carnegie Mellon is entitled to 20% of the sublicense
fee.
The
licensed technology is the following: Title: Media Annotation Visualization Tools and Techniques, and an Aggregate-Behavior Visualization
System Utilizing Such Tools and Techniques. (patent no. 10/061,756)
Following
December 31, 2021, there was a difference in interpretation of the terms of the purchase agreement between the Company and Bronx Family
Eye Care Inc. We have since agreed on the terms and are currently working on executing an amendment to the purchase agreement.
On
March 9, 2022, GTII executed a non-binding Letter of Intent with Wildfire Media Corp, relating to the acquisition of the assets and liabilities
of 1-800-Law-Firm, PLLC, a Delaware Corporation.
On March 17, 2022, the Board of Directors
authorized the issuance of 125,000 shares of common stock for legal services performed.