Note 1 – Basis of Presentation
The accompanying unaudited consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America and
the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly,
they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results
of operations, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring
adjustments) have been made which are necessary for a fair financial statement presentation.
The unaudited interim consolidated financial
statements should be read in conjunction with the Company’s Annual Report on Form 10K, which contains the audited financial
statements and notes thereto, together with the Management’s Discussion and Analysis, for the periods ended December 31,
2012 and 2011. The interim results for the period ended March 31, 2013 are not necessarily indicative of results for the full
fiscal year.
Note 2 – Nature of Operations
Global Equity Partners, Plc (“GEP”),
a private company, was organized under the laws of the Republic of Seychelles on September 2, 2009. Global Equity International
Inc. (the “Company” or “GEI”), a reporting company since June 21, 2012,was organized under the laws of
the state of Nevada on October 1, 2010. On November 15, 2010, GEP executed a reverse recapitalization with GEI.
Revenue is generated from business consulting
services, introduction fees, and equity participation.
Note 3 – Going Concern
As reflected
in the accompanying financial statements, the Company had a loss of $360,530 for the quarter ended March 31, 2013. Net cash used
in operations of $(289) for the quarter ended March 31, 2013; and a working capital deficit of $(293,069) and stockholders’
deficit of $928,411 as of March 31, 2013. These factors raise substantial doubt about the Company’s ability to continue
as a going concern.
The ability of the Company to continue
its operations is dependent on Management’s plans, which include the raising of capital through debt and/or equity markets,
until such time that funds provided by operations are sufficient to fund working capital requirements. The Company may need to
incur liabilities with certain related parties to sustain the Company’s existence.
The Company expects to use its working
capital to implement a marketing program to increase awareness of its business model, which includes, but is not limited to, acquisition
of private companies, with the intention of taking those companies public in the United States and possibly dual listing those
entities abroad. In the event that operating cash flows are slowed or nonexistent, the Company plans to reduce its overhead wherever
possible.
Depending upon market conditions, the
Company may not be successful in raising sufficient additional capital to achieve its business objectives. In such event, the
business, prospects, financial condition, and results of operations could be materially adversely affected hence there is
certain
doubt about the Company’s ability to continue as a going concern.
Global Equity International, Inc.
and Subsidiary
Consolidated Financial Statements
March 31, 2013
(Unaudited)
The accompanying consolidated financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery
of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue
as a going concern.
Note 4 – Summary of Significant
Accounting Policies
Principles of Consolidation
Global Equity International Inc. is
the parent company of its 100% subsidiary Global Equity Partners Plc. All significant inter-company accounts and transactions
have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements
in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements
and the reported amounts of revenue and expenses during the reporting period.
Making estimates requires management
to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation
or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate
could change in the near term due to one or more future non confirming events. Accordingly, the actual results could differ from
those estimates.
Risks and Uncertainties
The Company’s operations are subject
to significant risk and uncertainties including financial, operational, competition and potential risk of business failure. The
risk of social and governmental factors is also a concern since the Company is headquartered in Dubai.
Cash
The Company considers all highly liquid investments
with an original maturity of three months or less to be cash equivalents. At the quarter ended March 31, 2013 and at the year
ended December 31, 2012 respectively; the Company had no cash equivalents.
Global Equity International, Inc.
and Subsidiary
Consolidated Financial Statements
March 31, 2013
(Unaudited)
Accounts Receivable and Allowance
for Doubtful Accounts
The Company
recognizes accounts receivable in connection with the services provided.
The Company recognizes an allowance for doubtful
accounts based on an analysis of current receivables aging and expected future write-offs, as well as an assessment of specific
identifiable customer accounts considered at risk or uncollectible.
At the quarter ended March 31,
2013
, the Company had no bad debt. During the year 2012, the Company recorded $35,000 of bad debt expense pertaining to
two invoices the Company deemed were uncollectible.
Marketable
Securities
|
(A)
|
Classification
of
Securities
|
At the time of the acquisition, a security
is designated as held-to-maturity, available-for-sale or trading, which depends on the ability and intent to hold such security
to maturity. Securities classified as trading and available-for-sale are reported at fair value, while securities classified as
held-to-maturity are reported at amortized cost. The Company recorded unrealized loss on marketable securities of $0 and $465,000
during the quarters ended March 31, 2013 and March 31, 2012.
Cost Method Investment
At March 31, 2013, the Company has
investment in securities of two different Companies, having a cost of$163,000 that is treated as a cost method investment. The
value of the cost method investment pertains to the receipt of 9.2% of the common stock in a private company in which the best
evidence of value was the services rendered and a further 9.86% of the common stock in another private company in which the best
evidence of value was the services rendered.
There are no identifiable events or
changes in circumstances that had a significant adverse effect on the value of this investment.
Equity investment in companies is accounted
for under the cost method as the equity investments do not have readily determinable fair values. As per ASC codification 320
“Certain Investments in Debt and Equity Securities”, non marketable equity securities that do not have a readily determinable
fair value are not required to be accounted for under the equity method and are typically carried at cost.
|
(B)
|
Other
than
Temporary
Impairment
|
The Company reviews its equity investment
portfolio for any unrealized losses that would be deemed other-than-temporary and require the recognition of an impairment loss
in income. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions,
the duration and extent to which the fair value is less than cost, and the Company’s intent and ability to hold the investments.
Management also considers the type of security, related-industry and sector performance, as well as published investment ratings
and analyst reports, to evaluate its portfolio. Once a decline in fair value is determined to be other than temporary, an impairment
charge is recorded and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate,
the Company may incur future impairments. The Company didn’t record any permanent impairments during the quarters ended
March 31, 2013 and 2012.
Global Equity International, Inc.
and Subsidiary
Consolidated Financial Statements
March 31, 2013
(Unaudited)
Beneficial Conversion Feature
For conventional convertible debt where
the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”)
and related debt discount.
When the Company records a BCF, the
relative fair value of the BCF would be recorded as a debt discount against the face amount of the respective debt instrument.
The discount would be amortized to interest expense over the life of the debt.
Debt issue costs and debt discount
The Company may pay debt issue costs,
and record debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized
over the life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortized
amounts is immediately expensed.
Original issue discount
For certain convertible debt issued,
the Company provides the debt holder with an original issue discount. The original issue discount is recorded to debt discount,
reducing the face amount of the note and is amortized to interest expense over the life of the debt.
Fixed Assets
Fixed
Assets are to be stated at cost of acquisition less accumulated depreciation. Depreciation is provided based on estimated useful
lives of the assets. Cost of improvements that substantially extend the useful lives of assets can be capitalized. Repairs and
maintenance expenses are to be charged to expense when incurred. In case of sale or disposal of an asset, the cost and related
accumulated depreciation are removed from the consolidated financial statement.
|
|
March 31, 2013
|
|
|
December 31, 2012
|
|
Office equipment
|
|
$
|
6,579
|
|
|
$
|
6,579
|
|
Accumulated depreciation
|
|
$
|
(446
|
)
|
|
$
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
Net fixed assets
|
|
$
|
6,133
|
|
|
$
|
6,462
|
|
During the quarters ended March 31,
2013 and March 31, 2012 the Company has expensed $329 and $0 respectively for depreciation.
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
Revenue
Recognition
We
recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2)
the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable;
and (4) the collection of our fees is probable.
The
Company’s services do not include a provision for cancellation, termination, or refunds.
For
the quarters ended March 31, 2013 and March 31, 2012 the Company received marketable securities and cash as consideration for
services rendered.
At
March 31, 2013 and December 31, 2012,
the Company had the following
concentrations of accounts receivables with customers:
Customer
|
|
March 31, 2013
|
|
|
December 31, 2012
|
|
I
|
|
|
-
|
%
|
|
|
99
|
%
|
For
the three months ended March 31, 2013 and 2012
, the Company had
the following concentrations of revenues with customers:
Customer
|
|
March 31, 2013
|
|
|
March 31, 2012
|
|
C
|
|
|
100
|
%
|
|
|
26
|
%
|
E
|
|
|
-
|
%
|
|
|
19
|
%
|
F*
|
|
|
-
|
%
|
|
|
56
|
%(*)
|
The
Company received from customer “C” 56.20% of its revenue in cash and 43.80% in Non-marketable securities.
* Non-marketable
securities, accounted for under the cost method.
During
the three months ended March 31, 2013,the Company received $3,000 in equity securities in a private company in exchange for services
performed. The valuation was based on 3,000,000 shares at $0.001 per share.
Deferred
Revenue
Deferred
revenue represents fees that have been received by the Company for requested services that have not been substantially completed.
During the three months ended March 31, 2013 the Company received $120,000 from a client for service to be rendered during the
second quarter of 2013.
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
Share-based
payments
The
Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants at their
fair value on the grant date, which is based on the estimated number of awards that are ultimately expected to vest.
Share
based payments, excluding restricted stock, are valued using a Black-Scholes pricing model.
Share
based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered
or the fair value of the share-based payment, whichever is more readily determinable.
The
grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period
.
When
computing fair value, the Company considered the following variables:
|
●
|
The
risk-free
interest
rate
assumption
is
based
on
the
U.S.
Treasury
yield
for
a
period
consistent
with
the
expected
term
of
the
share
based
payment
in
effect
at
the
time
of
the
grant.
|
|
●
|
The
expected
term
was
developed
by
management
estimate.
|
|
●
|
The
Company
has
not
paid
any
dividends
on
common
stock
since
inception
and
does
not
anticipate
paying
dividends
on
its
common
stock
in
the
near
future.
|
|
●
|
The
expected
volatility
is
based
on
management
estimates
regarding
private
company
stock,
where
future
trading
of
stock
in
a
public
market
is
expected
to
be
highly
volatile.
|
|
●
|
The
forfeiture
rate
is
based
on
historical
experience.
|
Income
Taxes
Income
taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases, and operating loss carry-forwards. Deferred income tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets
if it is considered more likely than not that some portion, or all, of the deferred income tax assets will not be realized.
Earnings
per Share
Basic
earnings (loss) per share are computed by dividing net income (loss) by weighted average number of shares of common stock outstanding
during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number
of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The
Company has no common stock equivalents, which, if exercisable, would be dilutive. A separate computation of diluted earnings
(loss) per share is not presented.
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
Fair
Value of Financial Assets and Liabilities
The
carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair
values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.
As
required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted
prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly
or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity
to develop its own assumptions.
The
three levels of the fair value hierarchy are described below:
Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or
liabilities;
Level
2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially
the full term of the asset or liability;
Level
3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable
(supported by little or no market activity).
Loans
to Third Parties
On
March 22, 2013 the Company granted a loan to Dreamscapes Properties International Inc. The principal amount lent was $6,000, the
agreed interest rate was 5% per annum and finally, the loan would have to be repaid no later than one year from the date that
the loan was granted.
Recent
Accounting Pronouncements
There
are no new accounting pronouncements that have any impact on the Company’s financial statements.
Note – 5
Debt
|
(A)
|
Related
Party
–
short
term
|
The
Company received loans from related parties. The loans are non-interest bearing, unsecured and due on demand.
The
following table represents the loans payable activity for the quarter ended March 31, 2013 and the year ended December 31, 2012
respectively:
Loans payable – related party – December
31, 2012
|
|
$
|
48,075
|
|
Proceeds from loans
|
|
|
4,819
|
|
Repayments
|
|
|
-
|
|
Loans payable – related party
– March 31, 2013
|
|
$
|
52,894
|
|
Global
Equity International Inc. and Subsidiary
Notes to Consolidated
Financial Statements
March
31, 2013
(Unaudited)
|
(B)
|
Related
party
–
long
term
|
The
Company has accrued salary to the officers and directors of the Company based on the terms of the employment agreements entered
into with each officer. As at December 31, 2012, $209,475 was due to the Chief Executive Officer and $115,000 due to the Chief
Financial Officer. During the current quarter ended March 31, 2013, the Company converted this amount to Convertible Loan Payable.
This amount will be advanced for a term of two years and is repayable on demand and will accrue interest at 10% on the loan period.
The agreement also gives an option to the officers of the Company to convert all or part of the debt that the Company maintains
with them into restricted shares at $1.20 per share. The balance outstanding in the Loan Payable account as at March 31, 2013
is $324,475. The Company assessed if there is a beneficial conversion feature cost associated with this transaction, none was
noted.
In
February and March 2012, the Company entered into two 90 day bridge loan agreements to raise a total of $70,000; $20,000 from
“note holder A” and $50,000 from “note holder B”. The loans had interest rates ranging from 0% - 3%. The
loans were unsecured.
In
connection with these loans, the Company issued 140,000 shares of common stock, having a fair value of $70,000 ($0.50/share),
based upon recent third party services rendered at that time, and 20,000 options to one lender having an exercise price of $1,
expiring September 2013. The fair value of the options was $6,968.
The
140,000 shares of common stock issued in connection with the bridge loans were treated as a debt discount of $70,000. The remaining
valuation of the options, $6,968, was recorded as interest expense.
The
Company applied fair value accounting for the options issued to the lender. The fair value of the warrants granted was estimated
on the date of grant using the Black-Scholes pricing model. (Please refer to note C Stock Options)
On
June 25, 2012, $30,000 was repaid to “note holder B” and the remaining $10,000 was converted into 40,000 shares of
common stock ($0.25/share) in September of 2012, thereby leaving an outstanding balance as of December 31, 2012 of $10,000. There
was no gain or loss on conversion. During the current quarter ended March 31, 2013 the Company repaid the balance of $10,000.
On
July 5, 2012, “note holder A”, $20,000 was converted into 40,000 shares of common stock ($0.50/share). There was no
gain or loss on conversion.
On
November 16, 2012, the Company issued 2,000 common restricted shares ($0.25/share) to “note holder A” Mr. Lonergan
in lieu of $500 interest due. The balance outstanding for the interest payment of $500 is outstanding as at March 31, 2013.
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
|
(D)
|
Accounts
payable – related parties
|
The
following table represents the accounts payable to related parties as of March 31, 2013 and December 31, 2012, respectively:
|
|
03/31/2013
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
Salaries
|
|
|
84,809
|
|
|
|
414,034
|
|
Expenses
|
|
|
16,382
|
|
|
|
7,466
|
|
|
|
$
|
101,191
|
|
|
$
|
421,500
|
|
As discussed in note no.
5(B), the Company converted $324,475 of related party accounts payable into a convertible loan payable during the quarter ended
March 31, 2013.
Note
6 – Temporary Equity and Stockholders’ Equity
On
November 30, 2011, the Company authorized and designated 5,000,000 Series “A” convertible preferred shares of stock,
as a bonus to its Chief Executive Officer for services rendered, having a fair value of $480,000 ($0.096/share), based upon the
fair value of the services rendered, which represented the best evidence of fair value.
On
November 13, 2012, the Company´s board of directors approved an amendment to the Certificate of Designation; to amend the
voting rights and conversion rights of the Company´s Series “A” preferred shares as follows:
●
|
|
Voting
Rights:
10
votes
per
share
(votes
along
with
common
stock);
|
●
|
|
Conversion
Rights:
Each
share
of
Series
“A”
Preferred
is
convertible
into
ten
(10)
shares
of
common
stock
1
day
after
the
second
anniversary
of
issuance;
|
●
|
|
Dividend
Rights:
None;
|
●
|
|
Liquidation
Rights:
None
|
The
board of directors subsequently agreed that the Chief Executive Officer of the Company would retire to treasury 3,466,668 of these
Series “A” preferred shares and retain, the balance, 1,533,332 shares.
On
November 21, 2012 the Company´s CEO gave 533,332 of his Series “A” preferred shares to the Company´s CFO
(400,000) and two other employees (133,332). As the 533,332 preferred shares will convert into 5,333,320 on December 1, 2014 and
the price per common share on November 21, 2012 was $0.25, the contribution by the officer to the Company was calculated at $1,333,330.
The
Company has determined that no beneficial conversion feature or derivative financial instruments exist in connection with the
Series “A”, convertible preferred stock, as the conversion rate was fixed at an amount equal to the market price of
the Company’s common stock. Additionally, there are a stated number of fixed shares.
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
Redeemable
Preferred Stock
Under
Regulation S-X, Rule 5-02-28, preferred stock must be classified outside of stockholders’ equity when the stock is:
●
|
|
Redeemable
at
a
fixed
or
determinable
price
on
a
fixed
or
determinable
date,
|
●
|
|
Redeemable
at
the
option
of
the
holder,
or
|
●
|
|
Redeemable
based
on
conditions
outside
the
control
of
the
issuer.
|
The
Series “A”, convertible preferred stock is redeemable on December 1, 2014 and it
is
presented on the balance sheets as “Redeemable Preferred Stock” in a manner consistent with temporary equity.
There are no other features associated with this class of redeemable preferred stock, which require disclosure. The carrying amount
and redemption amount is $480,000. There are no redemption requirements.
During
the three months ended March 31, 2013, the Company issued the following shares:
Type
|
|
Quantity
|
|
|
Valuation
|
|
|
Range of Value
per Share
|
|
|
|
|
|
|
|
|
|
|
|
For settlement of balance in Accounts Payable (1)
|
|
|
75,000
|
|
|
$
|
82,500
|
|
|
$
|
1.10
|
|
Services Rendered (2)
|
|
|
100,000
|
|
|
$
|
80,000
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
175,000
|
|
|
$
|
162,500
|
|
|
|
|
|
|
(1)
|
The
Company
has
issued
75,000
shares
valued
at
$1.10
per
share
to
settle
an
account
payable.
The
total
value
associated
with
the
balance
settlement
is
$82,500,
$75,000
in
settlement
of
liability
due
at
December
31,
2012
and
$7,500
additional
expense
booked
during
the
quarter
ended
March
31,
2013.
|
|
|
|
|
(2)
|
Common
shares
issues
for
services
rendered
to
the
Company
at
$0.80
per
share.
|
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
The
following is a summary of the Company’s options activity:
|
|
Number of
options
|
|
|
Weighted Average
Exercise Price
|
|
Balance at December 31, 2012
|
|
|
20,000
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
- Granted
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
- Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
- Forfeited
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2013
|
|
|
20,000
|
|
|
$
|
1.00
|
|
The
weighted average remaining life for all outstanding options at March 31, 2013 is 0.50 years. The fair value of each option granted
is estimated on the date of grant using the Black-Scholes pricing model.
The
Black Scholes assumptions used are as follows:
Exercise price
|
|
$
|
1.00
|
|
|
Expected dividends
|
|
|
0
|
%
|
|
Expected volatility
|
|
|
182
|
%
|
|
Risk fee interest rate
|
|
|
0.3
|
%
|
|
Expected life
|
|
|
1.5
years
|
|
|
Expected forfeitures
|
|
|
0
|
%
|
|
On
February 15, 2013, the Company entered into a Securities Purchase Agreement (“SPA”) with Candelara Holdings Limited,
a company domiciled in the Chanel Islands (“Candelara”). The SPA covered the potential sale by the Company of up to
$1,300,000 worth of our Common Stock.
Candelara
had the right to purchase up to 916,667 shares of our Common Stock at a price of $.60 per share between the date of the SPA and
April 30, 2013, which would have resulted in the Company receiving $550,000 in proceeds from such purchase. In the event that
Candelara purchased the entire 916,667 shares of Common Stock by April 30, 2013, Candelara would have had an option (“Option”)
to purchase an additional $750,000 worth of our Common Stock at a per share purchase price equal to $.90 or 60% of the average
closing price of our Common Stock during the ten (10) trading days immediately prior to Candelara’s written notice to the
Company of its intent to exercise the Option.
Global
Equity International Inc. and Subsidiary
Notes
to Consolidated Financial Statements
March
31, 2013
(Unaudited)
On
April 26, 2013, Candelara unilaterally decided to not comply with the SPA and notified the Company that it would not buy any shares
of our Common Stock because our Common Stock was highly volatile.
The
Company has issued Candelara with 16,667 common restricted shares on May 3, 2013 for the $10,000 received.
On
October 8, 2012 the Company entered into a commission agreement with a company called Tempest Holdings Limited where Tempest would
receive a finder’s fee for the introduction of new business and also a retainer fee of 10,000 common restricted shares per
month for twelve months commencing January 1, 2013. The Company has valued the 30,000 shares due to Tempest using fair market
value at $27,000.
Note
7 – Subsequent Events
On
April 5, 2013,the Company issued 150,000 to Tricon Holdings, Inc. for the services to be rendered to the Company over the period
of 6 months valued at $0.25 per share.
On
April 5, 2013, the Company issued 500,000 restricted common shares to Caro Capital LLC, respectively for services rendered to
the Company. The Company will book the amount as Consulting Expense.
On
April 15, 2013 the Company issued 25,000 restricted common shares to Phillip E. Brooks for services rendered to the Company ($0.55
per share). In addition to the 25,000 shares the Company has paid $2,500 as advance for the monthly services.
On April 23, 2013, the
Company secured a nine month convertible loan for $42,500 with an 8% interest rate due on January 29, 2014. The terms of the conversion
will be a 42% discount to market based on an average price calculated on the 10 trading days prior to the conversion date. If
the Company opts to pay the loan back on or before the 9 month period ends hence not converting the debt into equity; borrower
shall make payment to the holder of an amount in cash (the “Optional Prepayment Amount”) equal to 130%,of total amount
due inclusive of principal and interest accrued.
On
April 24, 2013, the Company issued 150,000 shares to Robert Sullivan as a compensation for consulting agreement. In addition the
Company has paid $10,000 upon execution of the contract and $20,000 payable within 60 days of the agreement date. The agreement
is for a total period of nine months from the date of the agreement.
On
April 26, 2013, Candelara Holdings Limited unilaterally decided to not comply with the Special Purchase Agreement and notified
the Company that it would not buy any shares of our Common Stock because our Common Stock was highly volatile. On May 3, 2013,the
Company issued Candelara 16,667 common restricted shares for the $10,000 received during the quarter ended March 31, 2013.