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 September 30, 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 $1,150,568 for the nine months ended September 30, 2013. Net cash used in operations of
$(128,845) for the quarter ended September 30, 2013; and a working capital deficit of $(474,666) and stockholders´ deficit
of $1,268,677 as of September 30, 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.
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.
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
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 the 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 September 30, 2013 and at December 31,
2012 respectively; the Company had no cash equivalents.
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 September
30, 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 $0 as at September 30, 2013 and December 31, 2012.
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
Cost Method Investment
At March 31, 2013, the Company had
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.
At June 30, 2013, there were identifiable
events or changes in circumstances that had a significant adverse effect on the value of one of the investments hence the Company
impaired $160,000 of the investments.
Also at June 30, 2013, the Company
received 2,000,000 shares from a private company and client
having a cost of $2,000 that is treated
as a cost method investment. The value of the cost method investment pertains to the receipt of 8.55% of the common stock in a
private company in which the best evidence of value was the services rendered
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 did record a permanent impairment of one of its investments during the quarter
ended September 30, 2013; no impairments were carried out during the quarter ended September 30, 2012.
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.
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
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.
|
|
September
30, 2013
|
|
|
December
31, 2012
|
|
Office equipment
|
|
$
|
6,579
|
|
|
$
|
6,579
|
|
Accumulated depreciation
|
|
$
|
(1,115
|
)
|
|
$
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
Net fixed assets
|
|
$
|
5,464
|
|
|
$
|
6,462
|
|
During the three and nine months ended
September 30, 2013, the Company has expensed $336 and $ 998 and $0 and $0 during the comparative period September 30, 2012, respectively
for depreciation.
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 September 30,
2013 and September 30, 2012 the Company received marketable securities and cash as consideration for services rendered.
At September 30,
2013 and December 31, 2012,
the Company had the following concentrations of accounts receivables with customers:
Customer
|
|
September 30, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
ACI
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
SPI
|
|
|
0
|
%
|
|
|
99
|
%
|
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
For the nine months
ended September 30, 2013 and 2012
, the Company had the following concentrations of revenues with customers:
Customer
|
|
September 30, 2013
|
|
|
September 30, 2012
|
|
|
|
|
|
|
|
|
SAC
|
|
|
15
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
ANR
|
|
|
15
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
DSI
|
|
|
67
|
%
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
ACI
|
|
|
3
|
%
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
VOZ
|
|
|
0
|
%
|
|
|
15%
|
(*)
|
|
|
|
|
|
|
|
|
|
REG
|
|
|
0
|
%
|
|
|
37
|
%
|
The Company received from customer
“ACI” 75% of its revenue in cash and 25% in Non-marketable securities.
(*) Non-marketable securities, accounted
for under the cost method.
During the nine months ended September
30, 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. The company also received $2,000 in equity securities in another private company
in exchange for services to be performed. The valuation was based on 2,000,000 shares at $0.001 per share.
The company currently holds the following
equity securities in private and also reporting companies:
Company
|
|
No.
Shares
|
|
|
Status
|
|
|
|
|
|
|
M1 Lux AG
|
|
|
2,000,000
|
|
|
Private Company
|
Monkey Rock Group Inc.
|
|
|
1,500,000
|
|
|
Reporting Company – OTC
|
Voz Mobile Cloud Limited
|
|
|
3,200,000
|
|
|
Private Company
|
Arrow Cars International Inc.
|
|
|
3,000,000
|
|
|
Reporting Company – OTC
|
Direct Security Integration Inc.
|
|
|
2,000,000
|
|
|
Private Company
|
|
|
|
|
|
|
|
|
|
|
11,700,000
|
|
|
|
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
Deferred Revenue
Deferred revenue represents fees that
have been received by the Company for requested services that have not been substantially completed. During the nine months ended
September 30, 2013 the Company received $122,000 from a client for service to be rendered during the year 2013. At September 30,
2013, the Company recognized $60,000 of this deferred revenue as revenue; leaving a deferred revenue balance of $62,000.
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
September 30, 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 as of September 30, 2013 and as of December 31, 2012 respectively:
Loans payable –
related party – December 31, 2012
|
|
$
|
48,075
|
|
Proceeds from loans
|
|
|
4,819
|
|
Repayments
|
|
|
(-
|
)
|
Loans payable –
related party – September 30, 2013
|
|
$
|
52,894
|
|
Global Equity International, Inc.
and Subsidiary
September 30, 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 was due to the Chief Financial Officer. During the 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 September 30, 2013 is $324,475. The Company assessed
if there is a beneficial conversion feature cost associated with this transaction, none was noted.
(C)
Notes payable
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 options granted was estimated on the date of grant using the Black-Scholes
pricing model. (Please refer to note 6 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 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” in lieu of $500 interest due. The balance outstanding
for the interest payment of $500 is outstanding as at September 30, 2013.
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 June 4, 2013,
the
Company secured a twelve month convertible loan for $50,000 with the understanding that the Company will issue 10,000 common restricted
shares in lieu of interest, these shares are not issued as of September 30, 2013 and accounted for as Stock Payable. The terms
of the conversion will be either a $0.50 conversion price or a 25% discount to market based on an average price calculated on
the 10 trading days prior to the conversion date, whichever is the lowest.
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
On September 9, 2013, the Company secured
a nine month convertible loan for $32,500 with an 8% interest rate due on June 11, 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.
The amounts paid to acquire the debt
financing have been treated as a debt discount hence at September 30, 2013, the Company recorded debt discount of $56,034. This
will be amortized over the life of the respective loans.
During the nine months ended September 30, 2013 and September
30, 2012, the Company amortized $26,452 and $70,000.
(D)
Accounts payable – related parties
The following
table represents the accounts payable to related parties as of September 30, 2013 and December 31, 2012, respectively:
|
|
09/30/2013
|
|
|
12/31/2012
|
|
|
|
|
|
|
|
|
Salaries
|
|
$
|
205,000
|
|
|
|
414,034
|
|
Expenses
|
|
$
|
26,502
|
|
|
|
7,466
|
|
|
|
$
|
231,502
|
|
|
$
|
421,500
|
|
As discussed in note no. 5(B), the
Company converted $324,475 of related party accounts payable into a convertible loan during the nine months ended September 30,
2013.
Note 6 - Temporary
Equity and Stockholders’ Equity
(A)
Preferred Stock
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;
|
●
|
|
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.
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
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.
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.
(B)
Common Stock
During the nine months ended
September 30, 2013, the Company issued the following shares:
Date
|
|
Type
|
|
Shares
|
|
|
Valuation
|
|
|
Range
of value
per share
|
|
2/15/2013
|
|
Stock issued for services and payables
|
|
|
100,000
|
|
|
$
|
80,000
|
|
|
$
|
0.80
|
|
3/12/2013
|
|
Stock issued for settlement of debt
|
|
|
75,000
|
|
|
$
|
82,500
|
|
|
$
|
1.10
|
|
4/5/2013
|
|
Stock issued for services
|
|
|
150,000
|
|
|
$
|
142,500
|
|
|
$
|
0.95
|
|
4/5/2013
|
|
Stock issued for services
|
|
|
500,000
|
|
|
$
|
125,000
|
|
|
$
|
0.25
|
|
4/15/2013
|
|
Stock issued for services
|
|
|
25,000
|
|
|
$
|
13,750
|
|
|
$
|
0.55
|
|
4/24/2013
|
|
Stock issued for services
|
|
|
150,000
|
|
|
$
|
43,500
|
|
|
$
|
0.29
|
|
5/3/2013
|
|
Stock issued for cash
|
|
|
16,667
|
|
|
$
|
10,000
|
|
|
$
|
0.60
|
|
5/17/2013
|
|
Stock issued for services
|
|
|
40,000
|
|
|
$
|
6,800
|
|
|
$
|
0.17
|
|
5/17/2013
|
|
Stock issued for services
|
|
|
99,385
|
|
|
$
|
16,972
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
1,156,052
|
|
|
$
|
521,022
|
|
|
|
|
|
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
(C)
Stock options
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
|
|
|
20,000
|
|
|
$
|
1,00
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2013
|
|
|
-
|
|
|
$
|
-
|
|
This options expired on September 13,
2013. 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
|
%
|
(D)
Stock payable
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 90,000 shares due to Tempest using fair market value at $45,400.
On April 24, 2013, the Company entered
into a consulting agreement with Robert Sullivan. As per the agreement the Company will be issuing 150,000 restricted shares to
the consultant. The agreement also stipulates a condition where the Company guarantees a minimal value of $100,000 at the time
of legend removal and any shortfall will be taken care of by issuance of additional shares. As of the date of the agreement the
shares are valued at $43,500. The value of shares as at September 30, 2013 were $22,650 hence the difference of $77,350 is recorded
as stock payable.
On June 4, 2013, the Company received
$50,000 from Direct Securities Integration, Inc in pursuance of a notes payable agreement. The agreement stipulates a condition
for the payment of 10,000 shares in lieu of interest on the day of agreement. Such shares are not issued as of September 30, 2013,
and are valued at $5,500.
Global Equity International, Inc.
and Subsidiary
September 30, 2013
(Unaudited)
Note 7 – Commitments
and contingencies
On April 24, 2013, the Company entered
into advertisement contract with Robert Sullivan. The Company is required to pay $30,000 in cash and issue 150,000 shares. During
the second quarter of 2013, the Company paid $10,000 in cash, the balance of $20,000 was due with 60 days of the signing of the
agreement; this amount is unpaid as at September 30, 2013. The Company has guaranteed a value of $100,000 for its shares at the
time of legend removal. At September 30, 2013 the legend is still not removed, the Company has accrued for the shortfall of $77,350
as a stock payable.
Note 8 – Subsequent Events
On October 17, 2013,
the
Company secured a three month bridge loan for 200,000 GBP equivalent to $319,598 with the agreement to repay the principle plus
5% per month interest on or before January 18, 2014.
On October 18, 2013, the Company exercised
its option to prepay the loan it secured for $42,500 on April 23, 2013.
On November 1, 2013 the Company rented a 1400
square foot office located at X3 Jumeirah Bay, Office 3305, Jumeirah Lake Towers in Dubai and intends to have the office staffed
and fully operational on or before January 1, 2014.