BUSINESS DEVELOPMENT
BACKGROUND
Global Equity International
Inc. (“Company”) was incorporated on October 1, 2010, as a Nevada corporation, for the express purpose of acquiring
Global Equity Partners Plc, a corporation formed under the laws of the Republic of Seychelles (“GEP”) on September
2, 2009.
GEP is a Dubai based firm
that provides consulting services, such as corporate restructuring, advice on management buy outs, management recruitment, website
design and development for corporate marketing, investor and public relations, regulatory compliance and introductions to financiers,
to companies desiring to be listed on stock exchanges in various parts of the world.
Our authorized capital
consists of 70,000,000 shares of common stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001 par value.
On November 15, 2010,
we entered into a Plan and Agreement of Reorganization (“Plan of Reorganization”) with GEP and its sole shareholder,
Peter J. Smith, pursuant to which we would acquire 100% of the common stock of GEP. We consummated the Plan of Reorganization
effective December 31, 2010, by issuing 20,000,000 shares of our common stock to Peter J. Smith, at which time GEP became our
wholly-owned subsidiary and Peter J. Smith was appointed as our President, Chief Executive Officer and Director.
As a result of our acquisition
of GEP, we provide corporate advisory services to companies desiring to have their shares listed on stock exchanges or quoted
on quotation bureaus in various parts of the world. We have offices in the United States, Dubai, London and Marbella (Spain).
We have affiliations with firms located in some of the world’s leading financial centers such as London, New York, Frankfurt
and Dubai. These affiliations are informal and are comprised of personal relationships with groups of people or people with whom
our Company or our management has done, or attempted to do, business in the past. We do not have any contractual arrangements,
written or otherwise, with our affiliations.
IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY
As a Company with less
than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the
Jumpstart Our Business Startups Act of 2012 (also known as the “JOBS Act”). As an emerging growth company, we are
entitled to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public
companies. These provisions include:
|
●
|
Only
two
years
of
audited
financial
statements
in
addition
to
any
required
unaudited
interim
financial
statements
with
correspondingly
reduced
“Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations”
disclosure;
|
|
●
|
Reduced
disclosure
about
our
executive
compensation
arrangements;
|
|
●
|
Not
having
to
obtain
non-binding
advisory
votes
on
executive
compensation
or
golden
parachute
arrangements;
and
|
|
●
|
Exemption
from
the
auditor
attestation
requirement
in
the
assessment
of
our
internal
control
over
financial
reporting.
|
We may take advantage
of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease
to be an emerging growth company if we have more than $1 billion in annual revenues, if we have more than $700 million in market
value of our stock held by non-affiliates, or if we issue more than $1 billion of non-convertible debt over a three-year period.
We may choose to take advantage of some but not all of these reduced burdens in the future. We have irrevocably elected to opt
out of the extended transition period for complying with new or revised accounting standards pursuant Section 107(b) of the JOBS
Act.
Peter Smith founded Global
Equity Partners Plc to assist small to medium size businesses with management restructuring and corporate restructuring, in general,
and also to obtain, if requested by its clients, access to capital markets via equity and debt financings.
GEP looks for promising
small to medium size companies ($2,000,000 to $10,000,000 in assets) and introduces these clients to private and institutional
investors in our network (“rol-a-dex”) of over 179 “financial introducers” around the world. These financial
introducers are simply groups of people or institutions that are presently introducing new clients to us or who have introduced
new clients to our management in the past. We do not have any contractual arrangements, written or otherwise, with these financial
introducers.
Presently, GEP is our
only operating business. Global Equity International’s present operations are limited to insuring compliance with regional,
state and national securities regulatory agencies and organizations. In addition, GEI is charged with (i) handling our periodic
obligations under the Securities Exchange Act of 1934; (ii) managing our investor relations; and (iii) raising debt and equity
capital necessary to fund our operations and enhance and grow our business. GEI does not offer or conduct any consulting or advisory
services; as such services are performed solely by our foreign subsidiary, GEP.
We currently offer the
following services to our clients:
|
●
|
Corporate
restructuring
|
|
●
|
Website
design,
development
and
marketing
advice
|
|
●
|
Investor
and
public
relations
|
|
●
|
Introductions
to
financiers
|
CORPORATE RESTRUCTURING SERVICES
We advise and assist our
clients in determining the corporate structure that is most suitable to their business models. We recommend management changes
where necessary. We also offer them corporate governance models customized to their specific organizations and desired exchange
listings. We also review and analyze their balance sheets and capital structures and make recommendations on debt consolidations,
equity exchanges for debt, proper capital structures and viability and timing of equity and debt offerings. We do not presently
recommend and we do not intend in the future to recommend that our clients merge or be acquired by shell companies.
MANAGEMENT BUY OUTS
We assist our clients
in every aspect of management buy outs from corporate restructuring to debt financing and also introduce buyers and sellers to
financiers for private equity placements.
MANAGEMENT RECRUITING
We assist our clients
with the recruitment of management and board members through our various contacts around the world. Management recruitment and
retention is also an important part of our Corporate Restructuring Services and these services often overlap.
WEBSITE DESIGN AND DEVELOPMENT
We recognize that in these
times, successful businesses must have comprehensive and professional internet profiles, interactive websites and excellent feedback
mechanisms. We will assist our clients in this area by recommending third party consultants and organizations to design, develop
and manage their websites and social networking capabilities.
INVESTOR AND PUBLIC RELATIONS
Since our clients and
future clients will likely desire to have their shares listed or continue to be listed on a stock exchange or quoted on one of
the quotation bureaus, we will advise our clients on the necessary requirements for communicating with their equity holders and
stake holders, their customers and potential customers. We will assist our clients in this area by recommending third party financial
professionals and investor relations and public relations organizations to provide them with such services.
REGULATORY COMPLIANCE
We are organizing a cadre
of third party securities attorneys and accountants to assist our clients with their compliance with the many reporting and other
requirements of stock exchanges, quotation bureaus and securities regulatory agencies and organizations in the states and countries
where their shares will be or are listed.
EXCHANGE LISTINGS
We also assist our clients
with the selection of stock exchanges that may be suitable to our clients. Various exchanges have listing requirements and standards
that vary from one exchange to another. Typical listing requirements and standards relate to a number of things, such as pre-tax
income, cash flows, revenue, net tangible assets, market value of a company’s listed securities, minimum trading prices
of a company’s securities, minimum shareholders’ equity, operating history, number of shareholders, number of market
makers, and corporate governance. We will try to identify appropriate exchanges for our clients based on the particular client’s
operating history, pre-tax income, cash flow, revenue, net tangible assets, shareholder base and other factors described above.
We will assist our clients
with retention of attorneys and accountants having experience with publicly held companies and stock exchanges in various countries.
We will also assist our clients in locating market makers, investment bankers and broker-dealers to assist them with accessing
capital markets.
INTRODUCTIONS TO FINANCIERS
After reviewing the business
plans, prospects and problems that are unique to each of our clients, we will use our best efforts to introduce our clients to
various third party financial resources around the world who may be able to assist them with their capital funding requirements.
As used throughout this
Annual Report, references to “Global Equity International,” “GEI,” “Company,” “we,”
“our,” “ours,” and “us” refer to Global Equity International, Inc. and our subsidiaries, unless
the context otherwise requires. In addition, references to “financial statements” are to our consolidated financial
statements contained herein, except as the context otherwise requires. References to “fiscal year” are to our fiscal
year which ends on December 31 of each calendar year. Unless otherwise indicated, the terms “Common Stock,” “common
stock” and “shares” refer to our shares of $.001 par value, common stock.
HISTORICAL BUSINESS TRANSACTED
2010 TRANSACTIONS
GEP completed two transactions
in 2010. The first transaction involved M1 Luxembourg AG, a Swiss company that we helped get listed on the Frankfurt Open Market,
a German stock exchange.
M1 Luxembourg AG, through
its subsidiaries, offers financial advisory services. The firm’s subsidiaries include Cannon Regus, Sumner Holdings, ISIS
financial Associates Ltd, Britannia Overseas Property, and M1 Lux (Cyprus) Ltd. It provides mortgage, private banking, company
formation, real estate management and trust formation advisory services. Additionally, the firm offers property documentation,
education fees planning, retirement planning, healthcare insurance policies and private wealth management advisory services. M1
Luxembourg A.G. is headquartered in Hunenberg, Switzerland.
Our contract with M1 Luxembourg
AG originally called for us to receive a cash fee of $200,000. However, we renegotiated our fee to take 2,000,000 shares of the
client’s common stock, valued at $1,086,160, an amount substantially in excess of the $200,000 in fees payable to us, due
to the fact that the shares of M1 Luxembourg AG were thinly traded and subject to highly volatile price fluctuations and we had
no guarantee they would continue to be listed. Our total fees received from M1 Luxembourg AG in 2010 represented approximately
52.7% of our gross revenues for 2010.
On November 15, 2011,
M1 Luxembourg AG’s shares were delisted from the Frankfurt Open Market when it fell out of compliance with the capital adequacy
rules of the Frankfurt Open Market. M1 Luxembourg AG’s shares are no longer quoted on the Frankfurt Open Market. M1 Luxembourg
is still in business. However, since its shares are no longer quoted, we will have to write-down the value of this asset in the
fourth quarter of 2011 to $0. The resulting accounting loss on our M1 Luxembourg AG shares was $1,086,160 and was accounted for
in our audited financial statements for the fiscal year ended December 31, 2011.
The second transaction
in 2010 involved consulting with Monkey Rock Group Inc. (MKRO), a United States company operated by two British nationals. Monkey
Rock initially focused on organizing motorbike events, such as Sturgis, South Dakota, which is one of the largest gatherings of
bikers in the world with an average of 400,000 bikers participating. GEP was engaged by Monkey Rock to assist it in expanding
in Europe and to assist with branding and marketing. GEP introduced Monkey Rock to Brand Union, a division of WPP, one of the
largest advertising firms in the world.
In 2009, GEP received
$15,000 in cash compensation from Monkey Rock Group, Inc. In 2010, GEP received compensation from Monkey Rock in the form of 1,500,000
shares of common stock, valued at $975,000 at the time of issuance, an amount substantially in excess of the fees payable to us,
due to the fact that the shares of Monkey Rock were thinly traded and subject to highly volatile price fluctuations and we had
no guarantee they would continue to be quoted or traded.
Our total fees received
from Monkey Rock Group, Inc. in 2010 represented approximately 47.3% of our gross revenues for 2010.
Although we received 52.7%
of our gross revenues from M1 Luxembourg AG and 47.3% of our gross revenues from Monkey Rock Group, Inc. during 2010, these companies
represent non-recurring revenues and we were not dependent on revenues from these two companies in 2011 or 2012 nor will we be
dependent on them in any subsequent period.
NEW BUSINESS TRANSACTED IN 2011
In 2011, we initially
had contracts with three companies: (1) RFC K.K., a Japan based company; (2) Black Swan Data Limited, a United Kingdom based company;
and (3) Arrow Cars SL, a company based in Spain. In addition, we entered into another contract on December 12, 2011 with Voz Mobile
Cloud Ltd, a U.S. corporation, and we concluded our work on that contract on December 31, 2011.
RFC K.K. has been in business
for a little over three years and they are in the online race simulation business. RFC K.K. has engaged us to assist them in their
expansion into the Middle Eastern and Asian markets. We have arranged meetings between RFC K.K. and a few high profile, potential
Dubai based partners/investors. As of this time, RFC K.K. has not entered into any agreements with these potential Dubai partners/investors,
but has entered into preliminary, non-binding verbal agreements with the Shanghai local government and Ferrari to set up a Race
Fight Club in Shanghai, Peoples Republic of China.
We entered into our contract
with RFC K.K. on October 19, 2011. We have contracted to provide the following services to RFC K.K.:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
of
a
target
business.
|
A “target business”
would be a company having a business plan that is compatible with RFC K.K.’s business because it has a similar business
to RFC K.K. and have net assets, net profits and projected growth that would be suitable for RFC K.K. and that, if combined with
RFC K.K., could help RFC K.K. grow its business and ultimately meet various requirements or standards for having RFC K.K.’s
shares listed on an exchange or quoted on a stock quotation medium. At this time, RFC K.K. has not decided on a particular exchange
or identified any particular target business.
RFC K.K. has agreed to
pay us a total of $240,000 over the initial 12 months of our contract. We have received $60,000 under this contract so far and
have nine more payments due to us at $20,000 each. During months 13-24 of the contract, RFC K.K. will pay us $6,000 per month.
In addition, we will receive a 10% equity stake in RFC K.K. in the event that we assist RFC K.K. in acquiring a “target
business.”
|
(2)
|
BLACK
SWAN
DATA
LIMITED
|
Black Swan Data Limited
is a United Kingdom based company (“Black Swan”) that has developed algorithm based artificial intelligence that audits
and merges internal and external data feeds from various sources, such as sales and transactional data, web and mobile statistics,
consumer services data, social network analysis and customer relationship management databases.
We entered into our contract
with Black Swan Data Limited on July 28, 2011. We have contracted to provide the following services to Black Swan Data Limited:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
of
a
target
business;
and
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
a
stock
exchange
or
having
its
shares
quoted
on
a
stock
quotation
medium.
|
A “target business”
would be a company having a business plan that is compatible with Black Swan Data Limited’s business because it has a similar
business to Black Swan Data Limited, and having net tangible assets, net profits and projected growth that would be suitable for
Black Swan Data Limited and that, if combined with Black Swan Data Limited, could help Black Swan Data Limited grow its business
and ultimately meet the various requirements or standards for having Black Swan Data Limited’s shares listed on an exchange
or quoted on a stock quotation medium. At this time, Black Swan Data Limited has not decided on a particular exchange or target
business.
Black Swan Data Limited
has agreed to pay us $180,000, of which $40,000 has been paid. We will receive the balance of $140,000 over the next 12 months.
In addition, we will receive a 10% equity stake in Black Swan Data Limited in the event we assist Black Swan Data Limited in acquiring
a target business. Upon successful quotation of Black Swan Data Limited’s shares on a stock market, GEP will be appointed
as a consultant to Black Swan Data Limited for a 24 month period at $7,500 per month to assist Black Swan Data Limited in obtaining
a listing on NASDAQ in the United States or listing on an alternative, high profile American stock exchange (i.e., American Stock
Exchange or New York Stock Exchange).
Arrow Cars SL is currently
based in southern Spain and has been in business since 2008. Arrow Cars SL is a national rent a car business operating only in
Spain. Arrow Cars SL has engaged us to consult with them and to design a three year strategy to expand their business model into
other high density tourist areas of Spain, Portugal and southern France, with the objective of opening a similar business in the
United States, primarily in Florida.
We entered into our contract
with Arrow Cars SL on January 14, 2011. We have contracted to provide the following services to Arrow Cars SL:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
of
a
target
business.
|
A “target business”
would be a company having a business plan that is compatible with Arrow Cars SL’s business because it has a business similar
to Arrow Cars SL, and having net tangible assets, net profits and projected growth that would be suitable for Arrow Cars SL and
that, if combined with Arrow Cars SL, could help Arrow Cars SL grow its business and to ultimately meet various requirements or
standards for having Arrow Cars SL’s shares listed on an exchange or quoted on a stock quotation medium. At this time, Arrow
Cars SL has not decided on a particular exchange or a target business.
Arrow Cars SL agreed to
pay us an initial fee of $20,000 and then an additional aggregate fee of $115,000 over the subsequent twelve months. Arrow Cars
has paid us $135,000 through December 31, 2012. In addition, we will receive a 10% equity stake in Arrow Cars SL in the event
we assist Arrow Cars SL in acquiring a target business.
On December 12, 2011,
we entered into a contract with Voz Mobile Cloud Ltd, a “voice to mail” technology company based in the U.S. We consulted
with Voz Mobile Cloud Ltd on corporate restructuring, and we concluded our work on that contract on December 31, 2011. As compensation,
we received 2,000,000 shares of Voz Mobile Cloud Ltd common stock, which we valued at $100,000 in the fourth quarter of 2011.
During 2011, the Company
had revenues totaling $288,041, of which $188,041 was comprised entirely of cash received from these three clients: Arrow Cars
SL, Black Swan Data Limited and RFC KK. We also received 2,000,000 shares of a private company called Voz Mobile Cloud Ltd, valued
at $100,000.
Arrow Cars SL
|
|
$
|
73,081
|
|
|
|
25
|
%(1)
|
RFC KK
|
|
$
|
60,000
|
|
|
|
21
|
%(1)
|
Black Swan Data Limited
|
|
$
|
54,960
|
|
|
|
19
|
%(1)
|
Voz Mobile Cloud Ltd
|
|
$
|
100,000
|
|
|
|
35
|
%(2)
|
TOTAL
|
|
$
|
288,041
|
|
|
|
100
|
%
|
|
(1)
|
Represents
cash
fees
received
by
the
Company.
|
|
(2)
|
Represents
2,000,000
shares
of
Voz
Mobile
Cloud
Limited,
common
stock
received
in
lieu
of
cash
for
services
rendered
by
the
Company
to
Voz
Mobile
Cloud
Limited.
At
December
31,
2012,
the
Company
owned
a
total
of
3,200,000
common
shares
of
Voz
Mobile
Cloud
Limited
due
to
an
issuance
of
a
further
1,200,000
common
shares,
valued
at
$60,000, during
2012.
Peter
James
Smith,
our
President
and
Chief
Executive
Officer,
also
owns
1,340,000
shares
of
Voz
Mobile
Could
Limited
common
stock
received
in
lieu
of
cash
for
services
personally
rendered.
Mr.
Smith
is
deemed
to
the
beneficial
owner
of
the
3,200,000
shares
of
Voz
Mobile
Cloud
Limited
common
stock
held
by
the
Company
as
Mr.
Smith
has
sole
dispositive
and
voting
control
over
the
same.
|
In 2011, our total operating
expenses amounted to $337,991:
GENERAL & ADMINISTRATIVE
|
|
|
|
|
Office Expenses
|
|
$
|
10,415
|
|
Rent Expense
|
|
$
|
3,540
|
|
Travel
|
|
$
|
47,914
|
|
Web & Advertising
|
|
$
|
5,133
|
|
|
|
$
|
67,002
|
|
LEGAL & ACCOUNTING
|
|
|
|
|
Legal
|
|
$
|
16,359
|
|
Accountants
|
|
$
|
25,000
|
|
|
|
$
|
41,359
|
|
OTHER PROFESSIONAL SERVICES
|
|
|
|
|
Edgar Filer Service
|
|
$
|
1,180
|
|
Transfer Agent
|
|
$
|
2,630
|
|
Other
|
|
$
|
42,528
|
(1)
|
|
|
$
|
46,338
|
|
OTHER EXPENSES – SALARIES
|
|
|
|
|
Peter Smith
|
|
$
|
129,959
|
|
Enzo Taddei
|
|
$
|
40,000
|
|
Adrian Scarrott
|
|
$
|
13,332
|
|
|
|
|
|
|
|
|
$
|
183,291
|
(2)
|
|
|
|
|
|
TOTAL OPERATING EXPENSES
|
|
$
|
337,991
|
|
|
(1)
|
This
amount
includes
due
diligence
fees
paid
to
third
parties
on
behalf
of
some
of
our
clients.
|
|
(2)
|
The
Company’s
salaries
expense
amounted
to
$183,291,
of
which
$133,332
was
accrued
and
unpaid
at
December
31,
2011.
|
In 2011, we paid a total
of $10,000 to Mr. Patrick Dolan, a resident of London, United Kingdom, as a commission for introducing us to RFC K.K.
COMMISSION EXPENSES:
COMMISSIONS PAID TO INTRODUCERS
Introduction of RFC KK
|
|
$
|
10,000
|
|
|
|
$
|
10,000
|
|
In 2011, the Company incurred
other “non-recurring expenses” amounting to $1,632,160:
OTHER EXPENSES - NON-RECURRING
|
|
|
|
|
Dubai, U.A.E. Administrative and Consultancy Service
|
|
$
|
66,000
|
|
Bonus paid with Redeemable “Preferred shares” to Mr.
Peter Smith
|
|
$
|
480,000
|
(3)
|
Realized Loss on Impairment of Marketable Securities
|
|
$
|
1,086,160
|
(4)
|
|
|
$
|
1,632,160
|
|
|
(3)
|
1,533,332
shares
of
the
Company’s
Series
“A”
Preferred
Stock
were
issued
to
Mr.
Peter
James
Smith,
our
President,
in
lieu
of
the
$480,000
salary
bonus
our
Board
of
Directors
decided
to
grant
to
him.
|
|
(4)
|
Realized
loss
due
to
the
impairment
of
our
M1
Luxembourg
AG
marketable
securities;
this
impairment
was
for
$1,086,160.
|
In 2011, the net loss
was $(1,688,102) and the unrealized gain on the “available for sale marketable securities” owned by the Company amounted
to $448,924; hence, the comprehensive loss amounted to ($1,239,178) for 2011.
The Company recorded interest
income amounting to $690, paid $500 of interest and also recorded an exchange rate loss of $4,197.
OTHER INCOME / EXPENSE
|
|
|
|
|
Interest Income
|
|
$
|
690
|
|
Interest Expense
|
|
$
|
(500
|
)
|
Exchange Rate Gain / (Loss)
|
|
$
|
(4,197
|
)
|
|
|
$
|
(4,007
|
)
|
Based on 28,735,897 weighted
average shares outstanding for the year ended December 31 2011, the loss per share was $(0.06).
NEW BUSINESS TRANSACTED IN 2012
At the beginning of 2012,
we already had contracts with four companies: (1) RFC K.K., a Japan based company; (2) Black Swan Data Limited, a United Kingdom
based company; (3) Arrow Cars SL, (now called Arrow Cars International Inc.), a company based in Spain; and (4) Voz Mobile Cloud
Ltd., a U.S. corporation.
RFC K.K. has been in business
for a little over three years and they are in the online race simulation business. RFC K.K. has engaged us to assist them in their
expansion into the Middle Eastern and Asian markets. We have arranged meetings between RFC K.K. and a few high profile, potential
Dubai based partners/investors.
As of this time, RFC K.K.
has not entered into any agreements with these potential Dubai partners/investors, but has entered into preliminary, non-binding
verbal agreements with the Shanghai local government and Ferrari to set up a Race Fight Club in Shanghai, Peoples Republic of
China.
We entered into our contract
with RFC K.K. on October 19, 2011. We have contracted to provide the following services to RFC K.K.:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
or
a
merger
with
a
target
business.
|
A “target business”
would be a company having a business plan that is compatible with RFC K.K.’s business because it has a similar business
to RFC K.K and have net assets, net profits and projected growth that would be suitable for RFC K.K. and that, if combined with
RFC K.K., could help RFC K.K. grow its business and ultimately meet various requirements or standards for having RFC K.K.’s
shares listed on an exchange or quoted on a stock quotation medium. At this time, RFC K.K. has not decided on a particular exchange
or identified any particular target business.
RFC K.K. has agreed to
pay us a total of $240,000 over the initial 12 months of our contract. We have received $60,000 under this contract so far and
have nine more payments due to us at $20,000 each. During months 13-24 of the contract, RFC K.K. will pay us $6,000 per month.
In addition, we will receive a 10% equity stake in RFC K.K. in the event that we assist RFC K.K. in acquiring a “target
business.”
|
(2)
|
BLACK
SWAN
DATA
LIMITED
|
Black Swan Data Limited
is a United Kingdom based company (“Black Swan”) that has developed algorithm based artificial intelligence that audits
and merges internal and external data feeds from various sources, such as sales and transactional data, web and mobile statistics,
consumer services data, social network analysis and customer relationship management databases.
We entered into our contract
with Black Swan Data Limited on July 28, 2011. We have contracted to provide the following services to Black Swan Data Limited:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
or
a
merger
with
a
target
business;
and
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
a
stock
exchange
or
having
its
shares
quoted
on
a
stock
quotation
medium.
|
A “target business”
would be a company having a business plan that is compatible with Black Swan Data Limited’s business because it has a similar
business to Black Swan Data Limited, and having net tangible assets, net profits and projected growth that would be suitable for
Black Swan Data Limited and that, if combined with Black Swan Data Limited, could help Black Swan Data Limited grow its business
and ultimately meet the various requirements or standards for having Black Swan Data Limited’s shares listed on an exchange
or quoted on a stock quotation medium. At this time, Black Swan Data Limited has not decided on a particular exchange or target
business.
Black Swan Data Limited
has agreed to pay us $180,000, of which $40,000 has been paid. We will receive the balance of $140,000 over the next 12 months.
In addition, we will receive a 10% equity stake in Black Swan Data Limited in the event we assist Black Swan Data Limited in acquiring
a target business. Upon successful quotation of Black Swan Data Limited’s shares on a stock market, GEP will be appointed
as a consultant to Black Swan Data Limited for a 24 month period at $7,500 per month to assist Black Swan Data Limited in obtaining
a listing on NASDAQ in the United States or listing on an alternative, high profile American stock exchange (i.e., American Stock
Exchange or New York Stock Exchange).
|
(3)
|
ARROW
CARS
SL
/
ARROW
CARS
INTERNATIONAL
INC.
|
Arrow Cars SL is currently
based in southern Spain and has been in business since 2008. Arrow Cars SL is a national rent a car business operating only in
Spain. Arrow Cars SL has engaged us to consult with them and to design a three year strategy to expand their business model into
other high density tourist areas of Spain, Portugal and southern France, with the objective of opening a similar business in the
United States, primarily in Florida.
We entered into our contract
with Arrow Cars S.L. on January 14, 2011. We have contracted to provide the following services to Arrow Cars S.L.:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
of
a
target
business.
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
a
stock
exchange
or
having
its
shares
quoted
on
a
stock
quotation
medium.
|
A “target business”
would be a company having a business plan that is compatible with Arrow Cars SL’s business because it has a business similar
to Arrow Cars SL, and having net tangible assets, net profits and projected growth that would be suitable for Arrow Cars SL and
that, if combined with Arrow Cars SL, could help Arrow Cars SL grow its business and to ultimately meet various requirements or
standards for having Arrow Cars SL’s shares listed on an exchange or quoted on a stock quotation medium.
On April 1, 2012, Arrow
Cars SL was acquired by Arrow Cars International, Inc. (a Nevada corporation) by way of a reverse recapitalization. Arrow Cars
International, Inc. has since decided to have its shares quoted on the NASDAQ OTCBB.
Arrow Cars agreed to pay
us $135,000, which amount has been paid in full. In addition, we will receive a 10% equity stake in Arrow Cars International Inc.
when our contract with it has been fully carried out.
On December 12, 2011,
we entered into a contract with Voz Mobile Cloud Ltd., a “voice to mail” technology company based in the U.S. We consulted
with Voz Mobile Cloud Ltd. on corporate restructuring, and we concluded our initial work on that contract on December 31, 2011.
As compensation, we received 2,000,000 shares of Voz Mobile Cloud Ltd. common stock, which we valued at $100,000 in the fourth
quarter of 2011.
During 2012, Voz Mobile
Cloud retained our services again to carry out the following:
|
●
|
Act
as
a
corporate
finance
advisor
in
connection
with
an
acquisition
of
a
target
business;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
the
acquisition
of
a
target
business,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
an
acquisition
of
a
target
business;
and
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
a
stock
exchange
or
having
its
shares
quoted
on
a
stock
quotation
medium.
|
As compensation, we received
1,000,000 shares of Voz Mobile Cloud Ltd common stock, which we valued at $60,000 in the first quarter of 2012. Voz Mobile Cloud
Ltd. has since decided to have its shares quoted on the NASDAQ OTCBB.
|
(5)
|
DIRECT
SECURITY
INTEGRATION
INC
(DIRECT
CCTV)
|
On March 31, 2011, we
entered into a contract with Direct Security Integration Inc. and its U.K. subsidiaries (“Direct CCTV”), which are
engaged in the business of installing closed circuit television and other security equipment. Direct CCTV is based in the U.S.
and also in the United Kingdom.
We have contracted to
provide Direct CCTV the following services:
|
●
|
Act
as
a
corporate
finance
advisor
to
Direct
CCTV;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
Direct
CCTV,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
organic
and
inorganic
growth;
and
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
the
NASDAQ
OTCBB
|
Direct CCTV agreed to
pay us $240,000 and to date we have been paid in full. In addition, we have agreed that we will receive a 10% equity stake in
Direct CCTV upon Direct CCTV’s shares being quoted on the NASDAQ OTCBB.
On May 25, 2012, we entered
into a contract with Regis Card Limited (“Regis”), a “Pre-Paid” credit card company based in the U.S.
and in the United Kingdom.
We have contracted to
provide Regis the following services:
|
●
|
Act
as
a
corporate
finance
advisor
to
Regis;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
Regis,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
organic
and
inorganic
growth;
and
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
the
Dubai
NASDAQ.
|
Regis agreed to pay us
$250,000 and to date we have been paid a total of $150,000. In addition, we have agreed that we will receive a 10% equity stake
in the company upon listing Regis on the Dubai NASDAQ.
|
(7)
|
SCORPION
PERFORMANCE
INC.
|
On December 5, 2012, we
entered into a contract with Scorpion Performance Inc. (Scorpion”), a U.S. corporation based in Ocala, Florida. Scorpion
manufactures precision metal performance engine components and also precision medical instruments.
We have contracted to
provide Scorpion the following services:
|
●
|
Act
as
a
corporate
finance
advisor
to
Scorpion;
|
|
●
|
Advise
the
client
on
the
structure
of
the
acquisition
and
assist
the
client
in
the
preparation
and
authorization
of
documentation;
|
|
●
|
Use
reasonable
efforts
through
our
marketing
and
public
relations
contacts
to
support
and
market
Scorpion,
including:
(i)
where
appropriate,
arrange
meetings
and
assist
in
presentations;
(ii)
assist
the
client,
its
management
and
advisors
in
negotiating
definitive
documentation;
and
(iii)
otherwise
assist
the
client
with
such
other
actions
as
may
be
necessary
to
accomplish
organic
and
inorganic
growth;
and
|
|
●
|
Introduce
the
client
to
professional
advisors,
such
as
accountants,
auditors,
lawyers
and
stock
registrars
who
would
assist
the
client
with
having
its
shares
listed
on
the
Dubai
NASDAQ.
|
Scorpion agreed to pay
us $350,000 and to date we have been paid in full. In addition, we have agreed that we will receive a 6% equity stake in Scorpion
upon its initial public offering on the Dubai NASDAQ.
In December, 2012, we
were engaged by two more companies:
|
1)
|
Universal
Energy
Solutions
BV,
a
Dutch
green
energy
company,
that
desires
to
list
its
stock
on
the
Dubai
Nasdaq,
but
first
requires
our
Company
to
source
a
Dubai
sponsor
that
would
agree
to
underwrite
and
sponsor
the
proposed
public
listing.
We
agreed
to
a
fee
of
$10,000
and
have
been
paid
in
full.
We
have
subsequently
sourced
an
appropriate
Dubai
sponsor
and
intend
to
enter
in
to
a
full
consulting
agreement
with
Universal
Energy
Solutions
BV
during
the
second
quarter
of
2013.
|
|
2)
|
Innoveas
AG.,
a
German
technology
incubator
that
wishes
to
also
list
its
shares
on
the
Dubai
Nasdaq
but
as
before
also
requires
our
Company
to
source
a
Dubai
sponsor
that
would
be
in
agreement
to
underwrite
and
sponsor
the
proposed
public
listing.
We
agreed
to
a
fee
of
$10,000
and
have
been
paid
in
full.
We
have
subsequently
sourced
an
appropriate
Dubai
sponsor
and
intend
to
enter
in
to
a
full
consulting
agreement
with
Innoveas
AG
during
the
second
quarter
of
2013.
|
During 2012, we had revenues
totaling $609,000, of which $549,000 was comprised entirely of cash received from our current clients. We also received 1,000,000
shares of Voz Mobile Cloud Ltd, valued at $60,000.
In 2012, our total operating
expenses amounted to $880,637.
General and Administrative:
|
|
|
|
|
Advertising
and promotion
|
|
$
|
14,398
|
|
Website Maintenance
|
|
|
10,772
|
|
Rent
|
|
|
10,743
|
|
Travel
|
|
|
34,190
|
|
Client entertainment
|
|
|
12,516
|
|
Bank service charges
|
|
|
3,449
|
|
General office
expenses
|
|
|
24,335
|
|
|
|
$
|
110,403
|
|
Salaries:
|
|
|
|
|
Officers and Directors
|
|
$
|
360,000
|
|
Employees
|
|
|
139,999
|
|
|
|
$
|
499,999
|
(1)
|
Professional Services:
|
|
|
|
|
Accountants
|
|
$
|
43,633
|
|
Edgar Services
|
|
|
4,905
|
|
Legal
|
|
|
52,553
|
|
Tax Consultants
|
|
|
12,000
|
|
Transfer Agents
|
|
|
2,780
|
|
Investor Relations
|
|
|
10,000
|
|
XBRL Services
|
|
|
3,458
|
|
Other professional
services
|
|
|
54,406
|
|
|
|
$
|
183,735
|
|
Other:
|
|
|
|
|
Dubai business
licenses
|
|
$
|
86,500
|
|
Subtotal
|
|
$
|
880,637
|
|
|
(1)
|
The
Company’s
salaries
expense
amounted
to
$499,999,
of
which
$421,500
was
accrued
and
unpaid
at
December
31,
2012.
|
In 2012, the Company incurred
other “non-recurring expenses” amounting to $2,583,919:
Interest income
|
|
|
121
|
|
Commission expense
|
|
|
162,500
|
(1)
|
Bad debt allowances
|
|
|
35,000
|
|
Interest - Bridge Loans
|
|
|
7,968
|
|
Interest - Amortization of Debt Discounts
|
|
|
70,000
|
|
Realized impairment of marketable securities
|
|
|
975,000
|
(2)
|
Stock Compensation
|
|
|
1,333,330
|
(3)
|
Subtotal
|
|
$
|
2,583,919
|
|
Total Expenses
|
|
$
|
3,464,556
|
|
|
|
|
|
(1)
|
The
commission
expense
of
$162,500
was
incurred
by
three
introducers
of
new
business.
100%
of
these
commissions
were
paid
in
stock
at
conversion
rate
of
$.25
to
$.50
per
share.
|
|
(2)
|
Realized
loss
due
to
the
permanent
impairment
of
our
Monkey
Rock
Group
Inc.
marketable
securities;
this
impairment
was
for
$975,000.
|
|
|
|
|
(3)
|
The
stock
compensation
valued
at
$1,333,330
was
the
result
of
the
Company´s
CEO
gifting
533,332
of
his
own
personal
Series
“A”
preferred
shares
to
the
Company´s
CFO
and
two
of
the
company´s
employees.
|
Based on 29,149,498 weighted
average shares outstanding for the year ended December 31 2012, the loss per share was $(0.10).
OUR BUSINESS IN 2013
We have three distinct
divisions (none of which will be treated as a segment for financial reporting purposes):
1. Introducers Network.
We have developed and continue to develop a number of finance professionals, accountants, attorneys and financial advisers who
will introduce us to their clients. We will review businesses introduced to us through these introducers and we will compensate
them on sum “to be determined” based on the event that we are engaged by to assist the companies they introduce to
us.
2. Project Review. Our
management team and advisors will carefully review and vet each business plan and opportunity submitted to us. Our management
team and advisors will determine which services we can offer these clients and assess the potential propositions to best assist
our clients in achieving their goals.
3. Placing. Working with
our business associates in Dubai, Europe and the United States, we will use our best efforts to assist our clients with listings
on stock exchanges in these cities in order to maximize their exposure to capital markets and to access funding via debt and equity
offerings.
FUTURE PLANS
We currently have nine
clients under contract:
|
1.
|
Arrow
Cars
International
Inc.
|
|
2.
|
Black
Swan
Data
Limited.
|
|
4.
|
Voz
Mobile
Cloud
Limited.
|
|
5.
|
Direct
CCTV
(Direct
Security
Integration
Inc).
|
|
7.
|
Scorpion
Performance
Inc.
|
|
8.
|
Universal
Energy
Solutions
B.V.
|
MILESTONES THROUGH MARCH 2014
Our specific plan of operations and milestones
through March 2014 are as follows:
DURING THE SECOND QUARTER OF 2013, WE
INTEND TO:
DEVELOP THE INTRODUCER NETWORK FURTHER AND
IN HOPES OF ATTRACTING NEW INTEREST FOR OUR SERVICES.
We currently are relying
on introductions to potential clients by the following firms in Asia and Europe:
· Merchant House Group (London), a
United Kingdom registered investment house;
· TAP 09 Gmbh, an Austrian management
consultancy firm based in Wien, Vienna;
· Mashreq Bank, an Asian retail bank
based in Dubai, U.A.E.; and
· ABN Amro Private Bank based in Amsterdam,
the Netherlands
We do not have any verbal
or written agreements with the four firms identified above, as our relationship with each of them has been developed over the
past year or so.
We intend to develop
relationships with a further five “introducers” to potential new business for the Company before the end of June 2013.
The estimated additional expense of $20,000 to achieve this is mainly travel expenses that will be funded by income receivable
from clients currently under contract.
DUBAI EXPANSION
We will establish a firm
presence in Dubai, UAE where we are attracting clients, relationships and awareness. The Dubai operation will be a branch office
of the company allowing us a license to trade in the area. With the branch office formed we will recruit three members of staff
in Dubai.
|
1)
|
Administration
–
To
assist
in
the
day
to
requirements
of
the
business
|
|
2)
|
General
Manager
Dubai
–
To
assist
in
the
development
of
new
relationships
and
support
existing
relationship
as
well
client
liaison
duties
|
|
3)
|
Back
Office
support
–
Generic
support
for
all
elements
of
the
company
and
due
diligence.
|
The expected additional
costs for the branch office, the license and the staff is estimated to be $12,000 per month to be funded by additional consultancy
fees levied to the client.
We have recently completed
an agreement with an International consultancy firm, Adam Holdings, to offer our services to their clients; we will explore this
relationship further with a focus on seminars and circulars exposing our services to their clients in an effective manner.
CREATE A MORE EFFICIENT SYSTEM FOR REVIEWING
PROSPECTIVE BUSINESSES.
We will concentrate our
efforts on the quality of the company that is introduced to us. We will start off by sending the client a standard due diligence
list and request that they complete the list and send us the support for review. We will then follow-up the due diligence with
a “site visit” in order to properly understand our client’s business model and more importantly meet the principals
in person.
We will create a deeper
Due Diligence program allowing us to dig deep on any prospective client prior to engagement thus protecting the company from any
future problems, one of the new staff members will be responsible for the due diligence activities and creating a report for our
file on their findings.
DURING THE THIRD QUARTER OF 2013, WE
INTEND TO:
EXPAND OUR CONSULTANCY TO INCLUDE MORE MERGER
AND ACQUISITION ACTIVITY.
We intend to form relationships
with merger and acquisition specialists during 2013 which will hopefully enable us to:
|
1)
|
Find
potential
merger
and
acquisition
candidates.
|
|
2)
|
Introduce
our
clients
to
brokers
and
investment
bankers.
|
|
|
|
|
3)
|
Introduce
our
clients
to
the
appropriate
professionals
(attorneys
and
accountants)
to
assist
them
in
a
public
offering
or
exchange
listing.
|
The only additional cost
for this activity will be a very small administrative burden for telephone calls and communications to be funded out of operational
income, mainly income receivable from clients currently under contract.
DEVELOP IN HOUSE IT DEPARTMENT
Commencing initially
with one member we will start to develop a proprietary program allowing us to easily monitor a client’s development status
and work in progress. We will also use this tool to manage our pipeline of clients and therefore it will become vital in our cash
flow forecasting. Additional anticipated cost is $3,000 per month.
DUAL LISTING DUBAI
We have already entered
talks with some of the major investment banks such as Deutsche Bank Dubai and the Dubai NASDAQ in order to effect a dual listing
in Dubai allowing us a more prominent position in the market place and an ability to raise capital for acquisition should we need
to from the retail and institutional community in the UAE. We intend to become one of the first companies to dual list on Dubai
NASDAQ; our plan is to carry out a public relations campaign alongside the dual listing process with the public relations firm
we have selected with a view to prepare a campaign that will have a maximum effect.
DURING THE FOURTH QUARTER OF 2013, WE
INTEND TO:
EXPAND OUR NETWORK OF CONTACTS WITHIN THE
INVESTMENT COMMUNITY IN DUBAI
Our network of investment
companies in Dubai is currently small; however, we intend to substantially expand our Dubai network in order to enable us to make
introductions on a more institutional level. We intend to develop our network to at least twelve Investment Institutions who may
have interests in minority shareholding in companies from outside of the Middle East Region. We anticipate a small administrative
cost to be no more than $10,000 for such development to be funded from operational income, mainly income receivable from clients
currently under contract.
At present we are being
received with open arms by the Dubai and Middle Eastern financial community; hence we have plans to host various hospitality events
for our current clients, our key contacts and upper management of the company. The anticipated additional cost will be $15,000.
EXPAND OUR RANGE OF BUSINESS AND CONTACTS
We intend to take our
consultancy service outside of the Middle East and Europe into Asia and Sri Lanka. We will expand on a 'Commission Only' basis
for the individuals or companies who take on our service to offer to their clients. Accountants, lawyers and finance professionals
are the target market for overlaying our service into their existing client banks in return for a percentage of fees received.
We also intend to add at least one new member to our administration team within the fourth quarter of 2013. We anticipate the
cost to be approximately $3,000 per month funded from any new client being attracted as a result of the expansion.
It is our intention to
create a US subsidiary of our Dubai based Company, Global Equity Partners Plc. This subsidiary will most likely be based in Florida;
our group´s CFO will be relocated there and given the task to setup, manage and properly staff this office.
ROAD SHOWS
We will commence the
first of two “Road shows”, both held in Dubai with the support of the Dubai NASDAQ for companies already listed in
Sri Lanka who could be seeking a dual listing in Dubai to provide liquidity and more capital raising options. We have commenced
initial conversations with a brokerage house in Sri Lanka to look at their clients they have that would be suitable for the Dubai
market. We will initially invite management of selected companies to Dubai for a two day event in conjunction with Nasdaq Dubai
and a number of leading Investment Institutions, the anticipated cost of this is to be met by the prospective clients themselves
and sponsorship from the institutions and Nasdaq Dubai.
DURING THE FIRST QUARTER OF 2014, WE
INTEND TO:
ROAD SHOWS
We will organize a second
“Road show” targeted at Chinese companies in conjunction with a major broker dealer, based on the West Coast of the
USA, who deals exclusively with Chinese companies; we will follow the same procedure and costing as the Sri Lanka “Road
shows”.
FURTHER EXPAND OUR RANGE OF BUSINESS AND CONTACTS
The foundation for this
development will be done in fourth quarter of 2013. Within the first quarter of 2014, we intend to cement in the relationships
created in prior quarters and appoint a new member of staff, based in each region to manage and nurture the relationships created.
The target markets for attracting clients are: Thailand, Sri Lanka, China, Hong Kong and Singapore
To service the clients
generated from these markets we will spend time creating a network of service companies who we can utilize to assist us on a local
basis. We will explore the possibilities of dual listings for our clients in Singapore to allow us a local market for any Asian
clients we will attract and giving the company a firm foothold in the Asian territory.
EMPLOYEES; IDENTIFICATION OF A SIGNIFICANT
EMPLOYEE
We currently have two
employees: Peter J. Smith, and Enzo Taddei. Peter J. Smith, our President, and Enzo Taddei, our Chief Financial Officer, each
has an employment agreement with the Company. Peter J. Smith and Enzo Taddei are full time employees. We intend to hire additional
employees when they are needed.
COMPETITION
We face intense competition
in every aspect of our business, and particularly from other firms which offer management, compliance and other consulting services
to private and public companies. We would prefer to accept a relatively low cash component as our fee for management consulting
and regulatory compliance services and take a greater portion of our fee in the form of restricted shares of our private clients’
common stock. We also face competition from a large number of consulting firms, investment banks, venture capitalists, merchant
banks, financial advisors and other management consulting and regulatory compliance services firms similar to ours. Many of our
competitors have greater financial and management resources and some have greater market recognition than we do.
REGULATORY REQUIREMENTS
We are not required to
obtain any special licenses, nor meet any special regulatory requirements before establishing our business, other than a simple
business license. If new government regulations, laws, or licensing requirements are passed that would restrict or eliminate delivery
of any of our intended products, then our business may suffer. Presently, to the best of our knowledge, no such regulations, laws,
or licensing requirements exist or are likely to be implemented in the near future that would reasonably be expected to have a
material impact on or sales, revenues, or income from our business operations.
We are not a broker-dealer.
We do not believe we are an investment adviser or an investment company. We are not a hedge fund or a mutual fund or any similar
type of fund. We are primarily an operating business that offers and performs corporate consultancy services.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL
REGULATIONS
The Company’s common
stock is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (“1934 Act”). As a result of
such registration, the Company is subject to Regulation 14A of the “1934 Act,” which regulates proxy solicitations.
Section 14(a) requires all companies with securities registered pursuant to Section 12(g) thereof to comply with the rules and
regulations of the Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders
of the Company at a special or annual meeting thereof or pursuant to a written consent will require the Company to provide its
stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must
be submitted to the Commission at least 10 days prior to the date that definitive copies of this information are forwarded to
stockholders.
The Company is also required
to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Commission on a regular basis, and will be required
to disclose certain events in a timely manner, (e.g., changes in corporate control; acquisitions or dispositions of a significant
amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K.
WE ARE SUBJECT TO THE
REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002. IF WE ARE UNABLE TO TIMELY COMPLY WITH SECTION 404 OR IF THE COSTS
RELATED TO COMPLIANCE ARE SIGNIFICANT, OUR PROFITABILITY, STOCK PRICE AND RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD
BE MATERIALLY ADVERSELY AFFECTED.
The Company is required
to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002, which requires that we document and test our internal
controls and certify that we are responsible for maintaining an adequate system of internal control procedures for the 2013 fiscal
year. We are currently evaluating our existing controls against the standards adopted by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). During the course of our ongoing evaluation and integration of the internal controls of our
business, we may identify areas requiring improvement, and we may have to design enhanced processes and controls to address issues
identified through this review (see Item 9A, below for a discussion of our internal controls and procedures).
We believe that the out-of-pocket
costs, the diversion of management’s attention from running the day-to-day operations and operational changes caused by
the need to comply with the requirement of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and costs associated
with such compliance exceed our current expectations, our results of operations and the future filings of our Company could be
materially adversely affected.
DEPENDENCE ON KEY EMPLOYEES
The Company is heavily
dependent on the ability of our President, Peter Smith, and our Chief Financial Officer, Enzo Taddei. The loss of the services
of Mr. Smith or Mr. Taddei would seriously undermine our ability to carry out our business plan.
In the event of future
growth in administration, marketing, manufacturing and customer support functions, the Company may have to increase the depth
and experience of its management team by adding new members. The Company’s success will depend to a large degree upon the
active participation of its key officers and employees, as well as the continued service of its key management personnel and its
ability to identify, hire, and retain additional qualified personnel. There can be no assurance that the Company will be able
to recruit such qualified personnel to enable it to conduct its proposed business successfully.
REPORTS TO SECURITY HOLDERS
The public may view and
obtain copies of the Company’s reports, as filed with the Securities and Exchange Commission, at the SEC’s Public
Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Information on the Public Reference Room is available by
calling the SEC at 1-800-SEC-0330. Additionally, copies of the Company’s reports are available and can be accessed and downloaded
via the internet on the SEC’s internet site at http://www.sec.gov.
ITEM 1A. RISK FACTORS.
An investment in our Common
Stock involves a high degree of risk. Prospective investors should carefully consider the following risk factors and the other
information in this Annual Report and in our other filings with the SEC before investing in our Common Stock. Our business and
results of operations could be seriously harmed by any of the following risks. You should carefully consider the risks described
below, the other information in this Annual Report and the documents incorporated by reference herein when evaluating our Company
and our business. If any of the following risks actually occurs, our business could be harmed. In such case, the trading price
of our Common Stock could decline and investors could lose all or a part of the money paid for our Common Stock.
INVESTING IN OUR COMMON
STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF THE FOLLOWING RISKS ACTUALLY MATERIALIZES, OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS WOULD SUFFER AND OUR SHAREHOLDERS COULD LOSE ALL OR PART OF THEIR INVESTMENT IN OUR SHARES.
RISKS ASSOCIATED WITH OUR COMPANY
WHILE WE HAVE A LITTLE
OVER TWO YEARS OF OPERATING HISTORY AND HAVE ACCUMULATED PROFITS, THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT
IN PROFITABLE REVENUES. IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY, WE WILL CEASE OPERATIONS AND YOU WILL
LOSE YOUR INVESTMENT.
We were incorporated in
Nevada on October 1, 2010, and our wholly-owned subsidiary, GE Partners Plc., was formed on September 2, 2009. For the fiscal
year ended December 31, 2012, we incurred a net loss from operations of $2,777,240 and which included a realized loss on impairment
of marketable securities of $975,000. If we cannot generate sufficient revenues to operate profitably, we will cease operations
and you will lose your investment in our Company. Our ability to achieve and maintain profitability and positive cash flow is
dependent, among other things, upon:
|
●
|
our
ability
to
attract
clients
who
will
buy
our
services
from
us;
and
|
|
●
|
our
ability
to
generate
revenues
through
the
sale
of
our
services.
|
BECAUSE OUR AUDITORS HAVE
ISSUED A GOING CONCERN OPINION, THERE IS SUBSTANTIAL UNCERTAINTY THAT WE WILL CONTINUE OPERATIONS IN WHICH CASE INVESTORS COULD
LOSE THEIR INVESTMENTS IN OUR COMMON STOCK.
Our auditors have issued
a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve
months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue
in business. As such, we may have to cease operations and you could lose your investment.
WE ARE AN “EMERGING
GROWTH COMPANY” AND WE CANNOT BE CERTAIN IF WE WILL BE ABLE TO MAINTAIN SUCH STATUS OR IF THE REDUCED DISCLOSURE REQUIREMENTS
APPLICABLE TO EMERGING GROWTH COMPANIES WILL MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS.
We are an “emerging
growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 or “JOBS Act,” and we may adopt
certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive and stockholder
approval of any golden parachute payments not previously approved. We may remain an “emerging growth company” for
up to five full fiscal years following our initial public offering. We would cease to be an emerging growth company, and, therefore,
ineligible to rely on the above exemptions, if we have more than $1 billion in annual revenue in a fiscal year, if we issue more
than $1 billion of non-convertible debt over a three-year period, or if we have more than $700 million in market value of our
common stock held by non-affiliates as of June 30 in the fiscal year before the end of the five full fiscal years. Additionally,
we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors
find our common stock less attractive as a result of our reduced disclosures, there may be less active trading in our common stock
(assuming a market ever develops) and our stock price may be more volatile.
AS A RESULT OF OUR INTENSELY
COMPETITIVE INDUSTRY, WE MAY NOT GAIN ENOUGH MARKET SHARE TO BE PROFITABLE.
The corporate consulting
business is intensely competitive and due to our small size and limited resources, we may be at a competitive disadvantage, especially
as a public company. There are several firms offering similar services. Many of our competitors have proven track records and
substantial human and financial resources, as opposed to our Company who has limited human resources and little cash. Also, the
financial burden of being a public company, which will cost us approximately $40,000 per year in auditing fees and legal fees
to comply with our reporting obligations under the Securities Exchange Act of 1934 and compliance with the Sarbanes-Oxley Act
of 2002, will strain our finances and stretch our human resources to the extent that we may have to price our Consultancy service
fees higher than our non-publicly held competitors just to cover the costs of being a public company.
WE ARE VULNERABLE TO THE
CURRENT ECONOMIC CRISIS WHICH MAY NEGATIVELY AFFECT OUR PROFITABILITY AND ABILITY TO CARRY OUT OUR BUSINESS PLAN.
We are currently in a
severe worldwide economic recession. Runaway deficit spending by the United States government and other countries further exacerbates
the United States and worldwide economic climate and may delay or possibly deepen the current recession. Currently, a lot of economic
indicators such as rising gasoline and commodity prices suggest higher inflation, dwindling consumer confidence and substantially
higher taxes. Demand for the services we offer tends to decline during recessionary periods when disposable revenue is lower and
may impact sales of our services. In addition, sudden disruptions in business conditions as a result of a terrorist attack similar
to the events of September 11, 2001, including further attacks, retaliation and the threat of further attacks or retaliation,
war, civil unrest in the Middle East, adverse weather conditions or other natural disasters, such as Hurricane Katrina, pandemic
situations or large scale power outages can have a short term or, sometimes, long term impact on spending. The worldwide recession
is placing severe constraints on the ability of all companies, particularly smaller ones, to raise capital, borrow money, and
operate effectively and profitably and to plan for the future. The recent trauma in the Cyprus banking and debt crisis is likely
to expand to other companies in the region and could potentially have a negative impact on our European clients and operations.
BECAUSE PETER J. SMITH,
OUR PRESIDENT, OWNS 60.39% OF OUR TOTAL OUTSTANDING COMMON STOCK AND 1,000,000 (65.22%) SHARES OF OUR TOTAL OUTSTANDING PREFERRED
STOCK, MR. SMITH WILL RETAIN CONTROL OF US AND WILL BE ABLE TO DECIDE WHO WILL BE DIRECTORS AND YOU MAY NOT BE ABLE TO ELECT ANY
DIRECTORS WHICH COULD DECREASE THE PRICE AND MARKETABILITY OF OUR SHARES.
Peter J. Smith, our President,
owns 60.39% of our total outstanding common stock and 65.22% of our total outstanding preferred stock. As a result, Peter J. Smith
will own the vast majority of the shares of our Common Stock, a majority of the shares of our preferred stock and super-voting
rights attributable to his preferred stock, which allow him to cast two (2) votes per share of preferred stock and he will be
able to elect all of our directors and control our operations, which could decrease the price and marketability of our shares.
BECAUSE OUR BUSINESS MODEL
ANTICIPATES OUR RECEIVING EQUITY STAKES IN OUR CLIENTS, MOST OF WHOM WILL BE DEVELOPMENT STAGE COMPANIES, WE MAY NOT BE ABLE TO
RESELL SUCH EQUITY AT SUITABLE PRICES, IF AT ALL, WHICH COULD MATERIALLY IMPACT OUR EARNINGS AND ABILITY TO REMAIN IN BUSINESS.
Our business model anticipates
that we will receive, as partial compensation for our consulting services, equity stakes in our clients, many of whom will be
development stage companies. We will have to value those equity stakes at the time we receive them. Investments in development
stage companies are risky because many of such companies’ securities are illiquid, thinly traded (if at all) and the value
of such securities will be subject to adjustments should the value of such securities decline, should such securities be delisted
from an exchange or cease being quoted on a stock quotation medium or should such businesses fail, which could cause us to write-down
or write-off the value of such securities and result in a negative impact to our earnings and possibly cause us to cease or curtail
our operations. On November 15, 2011, the shares of one of our clients, M1 Luxembourg AG, were delisted from the Frankfurt Open
Market, resulting in a $1,086,160 loss on the value of our shares in M1 Luxembourg AG. On September 30, 2012, the shares of another
of our clients, Monkey Rock Group Inc. were demoted to the Pink Sheets from the OTCQB, resulting in a $975,000 loss on the value
of our shares in Monkey Rock Group Inc.
WE MAY BE SUBJECT TO FURTHER
GOVERNMENTAL REGULATION, INCLUDING THE INVESTMENT COMPANY ACT OF 1940, WHICH COULD ADVERSELY AFFECT OUR OPERATIONS.
As part of our business
model, GEP accepts equity securities in our clients as partial compensation for our services. Prior to 2012, 40% or more of our
income was derived from the receipt of equity securities and more than 40% of our assets were comprised of equity securities that
we received in exchange for some of our services. In 2012, only 9.85% of our income was derived from the receipt of equity securities.
As of December 31, 2012, 50% of our assets were comprised of equity securities.
Although we do not believe
we are engaged in the business of investing, reinvesting or trading in securities, and we do not currently hold ourselves out
to the public as being engaged in those activities, it is possible that we may be deemed to be an “inadvertent investment
company” under section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (“ICA”), if more than 40%
of our future income and/or more than 40% of our assets are derived from “investment securities” (as defined in the
ICA), and if we are deemed to be, or perceived to be, primarily engaged in the business of investing, reinvesting or trading in
securities.
If we were deemed or found
to be an investment company by the Securities and Exchange Commission or a court of law, then we would face dire consequences
and a maze of additional regulatory obligations. For example, registered investment companies are subject to extensive, restrictive
and potentially adverse regulation relating to, among other things, operating methods, management, capital structure, dividends
and transactions with affiliates. If it were established that we are an unregistered investment company, there would be a risk,
among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, in
an action by the SEC, that we would be unable to enforce contracts with third parties or that third parties with whom we have
contracts could seek to obtain rescission of transactions with us undertaken during the period it was established that we were
an unregistered investment company.
WE COULD BE SUBJECT TO
THE INVESTMENT ADVISERS ACT OF 1940, WHICH WOULD BE DETRIMENTAL TO OUR BUSINESS.
Although we do not believe
we are engaged in the investment advisory business and we do not hold ourselves out to be investment advisers, it is possible
that the SEC could deem or find us to be an unregistered investment adviser due to the types of consulting services offered by
us. If we were deemed or found to be an investment adviser by the Securities and Exchange Commission or a court of law, then we
would face dire consequences and a maze of additional regulatory obligations. For example, registered investment advisers are
subject to extensive, restrictive and potentially adverse regulation relating to, among other things, operating methods, fees,
management, capital structure, dividends and transactions with affiliates. If it were established that we are an unregistered
investment adviser, there would be a risk, among other material adverse consequences, that we could be become subject to monetary
penalties or injunctive relief, or both, in an action by the SEC, that we would be unable to enforce contracts with third parties
or that third parties with whom we have contracts could seek to obtain rescission of transactions with us undertaken during the
period it was established that we were an unregistered investment adviser.
OUR SHAREHOLDERS MAY BE
DILUTED SIGNIFICANTLY THROUGH OUR EFFORTS TO OBTAIN FINANCING, FUND OUR OPERATIONS AND SATISFY OUR OBLIGATIONS THROUGH ISSUANCE
OF ADDITIONAL SHARES OF OUR COMMON STOCK.
We will likely have to
issue additional shares of our Common Stock to fund our operations and to implement our plan of operation. Wherever possible,
our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the
non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action
or vote of the shareholders, to issue all or part of the 40,197,300 authorized, but unissued, shares of our common stock. Future
issuances of shares of our common stock will result in dilution of the ownership interests of existing shareholders, may further
dilute common stock book value and that dilution may be material.
FINRA SALES PRACTICE REQUIREMENTS
MAY LIMIT A STOCKHOLDER’S ABILITY TO BUY AND SELL OUR STOCK.
The FINRA has adopted
rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing
that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax
status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high
probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing
the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny
stock transactions. As a result, fewer broker-dealers may be willing to make a market in our common stock, which may limit your
ability to buy and sell our stock.
OUR ARTICLES OF INCORPORATION
AUTHORIZE THE ISSUANCE OF PREFERRED STOCK.
Our Articles of Incorporation
authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from
time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power
or other rights of the holders of the common stock. On November 30, 2011, the Company issued all 5,000,000 shares of our authorized
preferred stock to our Chief Executive Officer, Peter Smith. On November 20, 2012, the Board of Directors and Mr. Smith subsequently
agreed that Mr. Smith would retire to treasury 3,466,668 of these Series “A” preferred shares and retain, the balance,
1,533,332 shares. Mr. Smith subsequently gifted 400,000 of these Series “A” preferred shares to Mr. Taddei (CFO of
the Company) and a further 133,332 preferred shares to two other employees of the Company, 66,666 Series “A” preferred
shares each.
THIS ANNUAL REPORT CONTAINS
FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO US, OUR INDUSTRY AND TO OTHER BUSINESSES.
These forward-looking
statements in this Annual Report are based on the beliefs of our management, as well as assumptions made by and information currently
available to our management. When used in this Annual Report, the words “estimate,” “project,” “believe,”
“anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking
statements. These statements reflect our current views with respect to future events and are subject to risks and uncertainties
that may cause our actual results to differ materially from those contemplated in our forward-looking statements. We caution you
not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. We do
not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances
after the date of this Annual Report or to reflect the occurrence of unanticipated events.