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 year ended December 31, 2013. The interim results for the period ended June 30, 2014 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 net loss of $284,657 and $507,429 for the three and six
months ended June 30, 2014 respectively. Net cash used in operations of $(253,498) for the six months ended June 30, 2014; and
a working capital deficit of $1,485,691 and stockholders´ deficit of $2,818,326 as of June 30, 2014. 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
June
30, 2014
(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 June
30, 2014 and at December 31, 2013 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 June 30, 2014, the Company had no bad
debt.
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 June 30, 2014 and December 31, 2013.
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(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 not carry out any
impairments during the quarter ended June 30, 2014.
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
June
30, 2014
(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.
|
|
June 30, 2014
|
|
|
December 31, 2013
|
|
Office equipment
|
|
$
|
9,316
|
|
|
$
|
9,316
|
|
Accumulated depreciation
|
|
$
|
(2,476
|
)
|
|
$
|
(1,499
|
)
|
|
|
|
|
|
|
|
|
|
Net fixed assets
|
|
$
|
6,840
|
|
|
$
|
7,817
|
|
During
the six months ended June 30, 2014 and June 30, 2013, the Company expensed $977 and $662 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 six months ended June 30, 2014 and June 30, 2013 the Company received cash only as consideration for services rendered.
At
June 30, 2014 and June 30, 2013, the Company had the following concentrations of accounts receivables with customers:
Customer
|
|
|
June
30, 2014
|
|
|
June
30, 2013
|
|
|
|
|
|
|
|
|
|
ACI
|
|
|
|
100
|
%
|
|
|
0
|
%
|
|
|
|
|
100
|
%
|
|
|
0
|
%
|
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
For
the three months ended June 30, 2014 and June 30, 2013, the Company had the following concentrations of revenues with customers:
Customer
|
|
|
June
30, 2014
|
|
|
June
30, 2013
|
|
|
|
|
|
|
|
|
|
ACI
|
|
|
|
0
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
PCI
|
|
|
|
15
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
STV
|
|
|
|
13
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
SAC
|
|
|
|
72
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
100
|
%
|
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
|
|
|
|
Deferred
Revenue
Deferred
revenue represents fees that have been received by the Company for requested services that have not been substantially completed.
During the year ended December 31, 2013, the Company received $307,000 from two clients for service to be rendered during the
year 2013 and 2014. At June 30, 2014, the Company recognized $216,000 ($60,000 at December 31, 2013) of this deferred revenue
as revenue; leaving a deferred revenue balance of $31,000.
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.
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
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.
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.
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
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. This loan is currently in default, the Company plans to speak to Dreamscapes Properties International Inc.
with a view to discuss a payment plan over the next 6 months.
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 June 30, 2014 and as of December 31, 2013 respectively:
Loans payable – related party – December 31, 2013
|
|
$
|
57,194
|
|
Proceeds from loans
|
|
|
700
|
|
Repayments
|
|
|
-
|
|
Loans payable – related party – June 30,
2014
|
|
$
|
57,894
|
|
(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 June 30, 2014, $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 June 30, 2014 is
$324,475. The accrued interest payable at June 30, 2014 amounted to $40,560. The Company assessed if there is a beneficial conversion
feature cost associated with this transaction, none was noted.
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
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 June 30, 2014 and is 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. On August 8, 2014 it was mutually agreed
to convert this convertible loan into a payment on account for services to be rendered in Dubai in the near future.
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. On March 17, 2014 the Company decided to allow
this funder to convert $12,000 of this debt in common stock at $0.0406 per share. On April 1, 2014 the Company decided to allow
this funder to convert the rest of this debt in common stock at $0.0435 per share
On
October 9, 2013, the Company secured a two month loan for GBP 75,000 (equivalent to $120,420) with the understanding that the
Company will issue 10,000 common restricted shares, issued to the lender on December 7, 2013, and also repay 35,000 GBP (equivalent
to $56,196) in lieu of interest. As the principal and interest was not paid back to the lender on time. The Company compensated
the lender with an additional 20,000 common restricted shares and for this the lender agreed to five month extension. This stock
compensation as issued to the lender also on December 12, 2013. On February 27, 2014, the Company agreed to pay an extra $50,000
of interest in order to avoid defaulting on the loan. It was mutually agreed that the capital and the interest would be paid once
the $3,540,000 loan, applied for on December 9, 2013, from the United Kingdom financial institution was granted.
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
November 29, 2013, the Company received a loan in the amount of $450,000 from United Kingdom resident and subsequently the Company
issued a Convertible Note due on November 25, 2014 (“Convertible Note”). The Convertible Note will bear interest at
the rate of 10% per annum until maturity. The Convertible Note may be converted into shares of the issuer’s common stock
at a conversion price of $.50 per share at the option of the holder of the Convertible Note. If the Convertible Note is not paid
in full or converted into common stock of the Company prior to its maturity date, then the Convertible Note will accrue interest
at the rate of 4.5% per annum from the maturity date until paid in full. This $450,000 loan was used as a guarantee for a loan
amounting to $3,540,000 applied for to a United Kingdom financial institution on December 9, 2013. At June 30, 2014 the loan had
still not been approved due to technical reasons solely related to the lender. On August 8, 2014 the lender had confirmed that
the Company would be able to commence drawing down on the loan from August 15, 2014 onwards.
On
April 1, 2014, the Company received a $53,000 a nine month convertible loan that was signed on March 6, 2014. The loan carried
an 8% interest rate and will due on December 10, 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 equal to 130% of total amount due inclusive of principal and interest accrued.
On
April 1, 2014 the Company agreed issue stock at in order to pay off the rest of the note signed on September 9, 2013 ($20,500
plus the $1,300 of accrued interest).
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
On
May 1, 2014, the Company secured two 12 month convertible loans for $50,000 each with an 8% interest rate due on May 1, 2015.
The terms of the conversion were agreed at a 40% discount to market based on an average price of the two lowest bids on the 20
trading days prior to the conversion date. If the Company opts to pay the loan back on or before 90 days after the loans were
granted, hence not converting the debt into equity; borrower shall make payment to the holders of an amount in cash equal to 130%
of total amount due inclusive of principal and interest accrued. If the Company opts to pay the loan back on or before 180 days
after the loans were granted, hence not converting the debts into equity; borrower shall make payment to the holders of an amount
in cash equal to 140% of total amount due inclusive of principal and interest accrued. The company also agreed a two collateralized
secured promissory notes (backend notes) under the same terms for a further $50,000 from each lender within six months of the
first loans. This loan is not convertible unless the total amount, $100,000, is received as per both of the notes payable agreements.
On
June 12 2014, the Company and an investor entered into a two year $250,000 convertible promissory note with an original issue
discount of $25,000. The terms of this convertible note were $55,000 upon closing, an 8% interest rate per annum or 0% interest
if the note was to be paid back within 90 days of the issuance of the note. The terms of the conversion were agreed at the lesser
of $0.30 or a 40% discount to market based on an average price of the lowest bids on the 25 trading days prior to the conversion
date.
The
amounts paid to acquire the debt financing have been treated as a debt discount hence at June 30, 2013 the Company recorded debt
discount of $61,489. This will be amortized over the life of the respective loans. During the six months ended June 30, 2014 and
June 30, 2013, the Company amortized $25,858 and $8,212.
(D)
|
Accounts
payable – related parties
|
The
following table represents the accounts payable to related parties as of March 31, 2014 and December 31, 2013, respectively:
|
|
June
30, 2014
|
|
|
December
31, 2013
|
|
|
|
|
|
|
|
|
Salaries
|
|
|
356,395
|
|
|
|
182,080
|
|
Expenses
|
|
|
-
|
|
|
|
9,973
|
|
|
|
$
|
356,395
|
|
|
$
|
192,053
|
|
As
discussed in note no. 5(B), the Company converted $324,475 of related party accounts payable into a convertible loan during the
six months ended June 30, 2014.
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
|
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
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.
On
December 12, 2013 the Company issued 450,000 Series “A” preferred shares to the Company’s CFO (200,000), CEO
(200,000) and one employee (50,000) having a fair value of $540,000 ($0.12 per share), based upon the fair value of the services
rendered, which represented the best evidence of fair value.
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 $1,020,000.
There are no redemption requirements.
During
the six months ended June 30, 2014 the Company issued the following shares:
Date
|
|
|
Type
|
|
Shares
|
|
|
Valuation
|
|
|
Range
of value per share
|
|
3/17/2014
|
|
|
Stock issued for payment of debt
|
|
|
295,567
|
|
|
$
|
12,000
|
|
|
$
|
0.0406
|
|
4/01/2014
|
|
|
Stock issued for payment of debt
|
|
|
501,149
|
|
|
$
|
109,819
|
|
|
$
|
0.219
|
|
4/22/2014
|
|
|
Stock issued for services
|
|
|
165,000
|
|
|
$
|
8,250
|
|
|
$
|
0.0500
|
|
|
|
|
Totals
|
|
|
961,716
|
|
|
$
|
130,069
|
|
|
|
|
|
Global
Equity International, Inc. and Subsidiary
June
30, 2014
(Unaudited)
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. As of June 30, 2014 $77,350 was 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 June 30, 2014, and are valued at $5,500.
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 current period the Company has paid $10,000 in cash, the balance of $20,000 is due within
60 days of the signing of the agreement; this amount is unpaid as at June 30, 2014. The Company has guaranteed a value of $100,000
for its shares at the time of legend removal. As of June 30, 2014 the legend is still not removed, the Company has accrued for
the shortfall of $77,350 as a stock payable.
Note
8 – Other current assets
The
following is a summary of the Company’s other current assets:
|
|
June
30, 2014
|
|
|
December
31, 2013
|
|
|
|
|
|
|
|
|
Cash collateral paid to secure loan
|
|
$
|
450,000
|
(1)
|
|
$
|
450,000
|
|
|
|
|
|
|
|
|
|
|
Retainers paid to legal counsel
|
|
|
2,201
|
|
|
|
2,201
|
|
|
|
$
|
452,201
|
|
|
$
|
452,201
|
|
(1) Please refer to
Note 5(C) – Notes payable
Note
9 – Subsequent Events
On
July 22, 2014, the Company issue a total of 453,500 shares at $0.15 to four service providers that have introduced new business
to our Company.
On
July 24, 2014 the Company was engaged by a software company based in Sri Lanka, Singapore and India. The company has been recently
valued by Ernest and Young at $318 million. The terms of our engagement were to assist the company with a NASDAQ OTCQB listing
in the USA. The value of the contract was $250,000 and 10% of the issued and outstanding shares in the company once the Company
obtains a listing. The client has paid to date a total of $170,000.
On
July 27, 2014 the Company was engaged by a Dutch based client that has a FDA approved treatment for peritoneal cancer. The terms
of our engagement were to assist the company with NASDAQ Dubai IPO. The value of the contract was $465,000 and 7% of the issued
and outstanding shares in the company once the Company IPO´s its stock on the NASDAQ Dubai. The client has paid to date
a total of $230,000.
On
August 1, 2014 the Company formally engaged a Chicago based IR/PR firm called Martin E. Janis Inc. The agreement was to pay a
retainer for a minimum of 6 months at $7,500 per month and also an issuance of 200,000 restricted shares. We also agreed to a
get-out clause for the first month.
On
August 6, 2014 the Company was formally informed that the $3,540,000 loan agreed with a United Kingdom financial institution on
December 9 2013, will be due to commence drawdowns from August 15, 2014 subject to our company meeting the conditions precedent
stated in the loan agreement.
On
August 8, 2014 the party that issued the Company with a 12 month $50,000 convertible loan on June 4, 2013, agreed to convert the
loan into a payment on account for services to be rendered in the near future.